MIT academics propose carbon tax as the solution to America's deficit problems

Compared to the fiscal cliff, a carbon tax would boost growth while cutting emissions.

The Washington Post's Brad Plumer reports on a paper from the MIT Global Change Institute which argues that a carbon tax could, and should, replace the Bush tax cuts in the US.

Plumer:

The authors model what would happen if, this December, Congress enacted a small fee on carbon emissions to fend off a portion of the tax hikes and spending cuts that are scheduled to occur. The carbon tax would be levied directly on fossil fuels—on coal that comes out of the mine, say, or oil that’s shipped in from overseas—and would start at $20 per ton of carbon in 2013, rising 4 percent each year thereafter.

The authors, Sebastian Rausch and John M. Reilly, estimate that this tax would raise $1.5 trillion over the next 10 years.

To advocates of a carbon tax, this paper ought to be a mixed blessing.

On the one hand, the framing of the tax in terms of sensible deficit reduction is one of the better ways to get it in the debate. In both Britain and America, there is – for good or ill – an agreement that high deficits are a major problem which needs to be dealt with, and so hitching any policy to that cause is a far better recipe for success than pointing out its efficacy at fighting climate change.

On the other, the purpose of the tax could get muddled if this is how the debate is to proceed. Look, for example, at debates over the Robin Hood tax. No-one can agree whether it is being implemented to raise revenues, cut down on practices like high-frequency trading, or some undefined mixture of the two.

With a Robin Hood tax, that may be an acceptable confusion, but with a carbon tax, it is undoubtedly introduced to reduce carbon emissions. To think otherwise would be dangerous indeed. And so yoking a deficit reduction program to the tax creates some perverse incentives on the part of lawmakers. For if the tax does succeed in reducing carbon emissions – which the authors of the MIT paper suggest it will, though not by nearly enough to single-handedly solve the problem for the US – then the revenues gathered by it will drop accordingly.

Even so, having a carbon tax is still better than not having one, and the choke point the authors identify – the US fiscal cliff, and all the uncertainty it brings with it – could well be a time for introducing novel legislation of all stripes to the house.

A protest placard from Australia, where the carbon tax is rather unpopular. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Election 2017: The 50 Labour MPs most at risk of losing their seats

Dozens of Labour MPs are at risk of losing their seats on June 8. Here are the 50 sitting MPs most at risk. 

Labour MPs representing marginal seats are at risk of losing their seats should their party's low polling numbers translate into electoral reality. Here's a full list of the 50 sitting MPs with the smallest majorities. 

Chris Matheson – City of Chester
Majority: 93 (0.2 per cent of total turnout)
Second place in 2015: Conservatives

Rupa Huq – Ealing Central & Acton
Majority: 274 (0.5 per cent)
Second place in 2015: Conservatives

Albert Owen – Ynys Mon
Majority: 229 (0.6 per cent)
Second place in 2015: Plaid Cymru

Ruth Cadbury – Brentford & Isleworth
Majority: 465 (0.9 per cent)
Second place in 2015: Conservatives

Margaret Greenwood – Wirral West
Majority: 417 (0.9 per cent)
Second place in 2015: Conservatives

Holly Lynch – Halifax
Majority: 428 (1 per cent)
Second place in 2015: Conservatives

Daniel Zeichner – Cambridge
Majority: 599 (1.1 per cent)
Second place in 2015: Liberal Democrats

Wes Streeting – Ilford North
Majority: 589 (1.2 per cent)
Second place in 2015: Conservatives

Paul Farrelly – Newcastle-under-Lyme
Majority: 650 (1.5 per cent)
Second place in 2015: Conservatives

John Woodcock – Barrow & Furness
Majority: 795 (1.8 per cent)
Second place in 2015: Conservatives

Tulip Siddiq – Hampstead & Kilburn
Majority: 1138 (2.1 per cent)
Second place in 2015: Conservatives

Joan Ryan – Enfield North
Majority: 1086 (2.3 per cent)
Second place in 2015: Conservatives

Peter Kyle – Hove
Majority: 1236 (2.4 per cent)
Second place in 2015: Conservatives

Paula Sheriff – Dewsbury
Majority: 1451 (2.3 per cent)
Second place in 2015: Conservatives

Cat Smith – Lancaster & Fleetwood
Majority: 1265 (3.1 per cent)
Second place in 2015: Conservatives

Natascha Engel - North East Derbyshire
Majority: 1883 (3.9 per cent)
Second place in 2015: Conservatives

Gareth Thomas – Harrow West
Majority: 2208 (4.8 per cent)
Second place in 2015: Conservatives

Madeleine Moon – Bridgend
Majority: 1927 (4.9 per cent)
Second place in 2015: Conservatives

Karen Buck – Westminster North
Majority: 1977 (5 per cent)
Second place in 2015: Conservatives

Iain Murray – Edinburgh South
Majority: 2637 (5.3 per cent)
Second place in 2015: SNP

Rosena Allin-Khan – Tooting
Majority: 2842 (5.3 per cent)
Second place in 2015: Conservatives

Ian Lucas – Wrexham
Majority: 1831 (5.6 per cent)
Second place in 2015: Conservatives

Richard Burden – Birmingham Northfield
Majority: 2509 (5.9 per cent)
Second place in 2015: Conservatives

Mary Creagh – Wakefield
Majority: 2613 (6.1 per cent)
Second place in 2015: Conservatives
 

Vernon Coaker – Gedling
Majority: 2986 (6.2 per cent)
Second place in 2015: Conservatives

Clive Efford – Eltham
Majority: 2693 (6.2 per cent)
Second place in 2015: Conservatives

Rob Flello - Stoke-on-Trent South
Majority: 2539 (6.5 per cent)
Second place in 2015: Conservatives

Susan Jones – Clwyd South
Majority: 2402 (6.8 per cent)
Second place in 2015: Conservatives

Jim Cunningham – Coventry South
Majority: 3188 (7.3 per cent)
Second place in 2015: Conservatives

Jenny Chapman – Darlington
Majority: 3024 (7.6 per cent)
Second place in 2015: Conservatives

David Hanson – Delyn
Majority: 2930 (7.7 per cent)
Second place in 2015: Conservatives

Gordon Marsden – Blackpool South
Majority: 2585 (8 per cent)
Second place in 2015: Conservatives

Julie Cooper – Burnley
Majority: 3244 (8.1 per cent)
Second place in 2015: Liberal Democrats

Mark Tami – Alyn & Deeside
Majority: 3343 (8.1 per cent)
Second place in 2015: Conservatives

Nic Dakin – Scunthorpe
Majority: 3134 (8.5 per cent)
Second place in 2015: Conservatives

Kerry McCarthy – Bristol East
Majority: 3980 (8.6 per cent)
Second place in 2015: Conservatives

Paul Flynn – Newport West
Majority: 3510 (8.7 per cent)
Second place in 2015: Conservatives

Alan Whitehead - Southampton Test
Majority: 3810 (8.8 per cent)
Second place in 2015: Conservatives

Neil Coyle – Bermondsey & Old Southwark
Majority: 4489 (8.8 per cent)
Second place in 2015: Liberal Democrats

Lindsay Hoyle (Deputy speaker) – Chorley
Majority: 4530 (8.8 per cent)
Second place in 2015: Conservatives

Helen Goodman – Bishop Auckland
Majority: 3508 (8.9 per cent)
Second place in 2015: Conservatives

Thangam Debbonaire – Bristol West
Majority: 5673 (8.9 per cent)
Second place in 2015: Green

Geoffrey Robinson – Coventry North West
Majority: 4509 (10 per cent)
Second place in 2015: Conservative

Graham Jones – Hyndburn
Majority: 4400 (10.2 per cent)
Second place in 2015: Conservatives

David Crausby – Bolton North East
Majority: 4377 (10.2 per cent)
Second place in 2015: Conservatives

Ivan Lewis - Bury South
Majority: 3508 (8.9 per cent)
Second place in 2015: Conservatives

Liz McInnes – Heywood & Middleton
Majority: 5299 (10.9 per cent)
Second place in 2015: Ukip

Alison McGovern – Wirral South
Majority: 4599 (11 per cent)
Second place in 2015: Conservatives

Alan Meale – Mansfield
Majority: 5135 (11.3 per cent)
Second place in 2015: Conservatives

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