James Conca writes:
So how should we use those taxes?Probably the most effective use of a carbon tax is for developing climate preparedness. Strengthening those agencies and infrastructure that can best help us withstand, and recover from, the worst effects of a changing climate is the first and best use of such a tax. Agencies such as FEMA, NOAA, NASA, CDC, NIH, EPA, FDA and the U.S. Coast Guard should have their budgets dramatically increased. FEMA’s budget could go from $13 billion to $50 billion. NOAA’s could quadruple to $20 billion. All of these agencies could increase significantly without other appropriations if we had even a minimal carbon tax.
These are all of the people you suddenly need right after something like Hurricane Sandy makes landfall. And these are not big numbers. These budgets are easily covered by any reasonable carbon tax. In fact, a tax of this magnitude could also provide most of the research dollars needed to develop:
• specific agricultural crops that are hardier in the face of all climate changes,
• secured and newly developed water resources,
• better city planning to address regional climate risks,
• emplacement of dykes and barriers that work (see Rhode Island’s Hurricane Barrier that protects that State’s capitol city),
• back-up power systems to critical infrastructure that are hardened, redundant or sited to withstand climate risks, particularly flooding,
• building sustainable and disaster-resilient hospitals, energy systems and schools, and
• steady, long-term movement of human settlements to higher ground.
Some of this revenue could go to increasing loan guarantee funds to low-carbon energy systems. Not as tax breaks. Loan guarantees work best if the technology is sound and cost-effective but just need a little up-front capital to get started or some time to work out kinks. If tax credits exist, they are given even if the technologies are not cost-effective.
One very bad idea is to use these tax revenues to reimburse rate payers so they don’t feel the pain as much. Feeling the pain is what this is all about. No one makes radical changes in lifestyle or society without feeling some pain. But if the solutions are truly market-based, then the consumer is well-represented. If it’s just mandates and tax credits, the consumer suffers and ideology and trendy technologies dictate our future.