Climate change is one of the defining issues that the world faces today with many different contributors to this phenomenon from all across the world, but one constant is carbon dioxide (CO2).
According to the United States Environmental Protection Agency, CO2 makes up a large majority of the greenhouse gasses that go into our atmosphere, and the U.S. is one of its greatest producers. If America wants to make any meaningful contribution to the global fight against climate change, a carbon tax is a great way to go.
Currently the U.S. is responsible for around 14% of all carbon emission in the world, with American emissions per capita being triple the global average, as indicated by Ian Tieso from Statista. These massive emissions have created the need for a national carbon tax.
The Center for Climate and Energy Solutions states that a government will set a certain price that carbon emitters (usually corporations) will have to pay for every ton of carbon that they release into the atmosphere. This makes polluting more costly which dampens the use of methods that produce CO2 by forcing emitters to find alternative, less pollutant and more responsible production methods. In addition, it makes the prices consumers have to pay for products involved in this cycle increase, therefore discouraging their purchasing.
While this may sound like a new idea, several states in the U.S. have a similar program, called the Regional Greenhouse Gas Initiative. This grouping of Northeastern states utilizes a cap and trade system, where power plants are required to purchase a license for each ton of greenhouse gas they produce. The government effectively puts a “cap” on the industry’s level of emissions by making the licenses less plentiful and more expensive over time, urging companies to invest in clean energy as a cheaper alternative.
These plants can sell their licenses through an auction that can be invested by RGGI into things like clean energy within member states. The impact of RGGI has been unambiguously positive on states that have chosen to participate, with both fossils and CO2 emissions dropping significantly in comparison to states not part of the alliance over the last decade.
While the benefits of a cap and trade system within the U.S. have been very positive, it’s important to realize that even more can be done, and this next step is a full national carbon tax.
The American cap and trade experiment has delivered results, but it still leaves something to be desired. Mainly, the RGGI targets only larger greenhouse gas emitters in the energy sector, which leaves large swathes of polluters unaffected. By contrast, an effective national carbon tax would have the potential to tax a larger variety of polluters, both in terms of size and industry.
The climate crisis is growing by the day, and although the U.S. is not the sole contributor, it must accept some blame. The world is counting on innovative policy solutions from nations that can make a true dent in halting the progression of climate change, and a national American carbon tax fits that bill.
