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Robert J. Shapiro
Chairman, U.S. Climate Task Force

Robert J. Shapiro

Robert Shapiro, Under Secretary of Commerce in the Clinton administration, is chairman of the U.S. Climate Task Force and Sonecon, an economic advisory group. ALL POSTS

The Urgent Need to Open Up the Debate

The central challenge we face is the same one nearly every other country faces: Assemble the political support for a meaningful system for reducing greenhouse gas emissions. Our current attempt to enact a cap-and-trade system is failing on two counts: It doesn't have broad public support, evident in its weak support in the Senate; and based on the legislation passed by the House, it wouldn't substantially reduce those emissions. In that respect, it resembles the European Trading Scheme, which like Waxman-Markey is so ridden with exceptions and flexible targets that Europe's emissions continue to rise.

If we're serious about reducing the risks of climate change, we have to expand our debate to include other approaches, starting with a carbon-based tax. Such an approach is the only one with a record of success. For example, Sweden enacted carbon-based taxes in 1990; by 2007, the country's greenhouse gas emissions were 8 percent less than 17 years earlier -- even as Sweden's economy expanded 50 percent, in real terms. 

A carbon-based tax also could be enacted as part of a tax shift in which the revenues are recycled through cuts in payroll taxes or rebates for households. This design, endorsed by Al Gore in his Nobel address, could help protect overall growth and the incomes of lower and middle-income Americans. And in contrast to the notorious price volatility of cap-and-trade systems, the tax approach would establish a stable price for carbon. That stable price would give businesses a sound economic basis for undertaking the large investments required to develop new, climate-friendly technologies and alternative fuels, and give households the incentive to adopt them.

With cap-and-trade on the edge of rejection in the Senate, the key challenge facing the administration and leading environmental groups is to open the public debate to this "Plan B" for reducing greenhouse gas emissions.

By Robert J. Shapiro  |  October 4, 2009; 3:56 PM ET Save & Share:  Send E-mail   Facebook   Twitter   Digg     Del.icio.us   StumbleUpon   Technorati  
Next: A Popular Movement is Necessary

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Could not agree more that a carbon tax is the better of the two options. A carbon tax is straightforward, transparent, avoids the market manipulation inherent to cap and trade, incentivizes green R&D AND returns the revenue to the people.

Posted by: SallyVCrockett | October 6, 2009 9:16 PM
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The entire reason for Cap'n Trade was that the Carbon Tax would be a political impossibility, and action for climate protection is urgent. The current version (Waxman Markey) has been lobbied into a Rube Goldberg contraption which, even if properly implemented, would have all the impact of a flea's flatulence at ten paces. Obstructionists obstruct for the sake of obstructing. If we are going to fight to protect the climate, we should pick a fight worth winning. We should go with the Carbon Tax.

Posted by: DavidFCollins | October 6, 2009 12:43 PM
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