Carbon Tax Is a Popular Topic in Washington

The Nicholas Institute for Environmental Policy Solutions at Duke University
The Nicholas Institute for Environmental Policy Solutions at Duke University

Since China announced it will hold off plans to introduce a carbon tax, the idea has generated some activity on Capitol Hill.

Lawmakers on Tuesday proposed a draft bill that would charge the largest industrial polluters a fee for, or carbon tax on, their fossil-fuel emissions. The plan, proposed by Rep. Henry Waxman (D-Calif.), Sen. Sheldon Whitehouse (D-R.I.), Rep. Earl Blumenauer (D-Ore.), and Sen. Brian Schatz (D-Hawaii), includes three possible per-ton prices for carbon pollution—$15, $25 or $30—and annual cost increases ranging from 2 percent to 8 percent to ensure that emissions continue to decrease. The new bill solicits feedback on how revenue (subscription required) generated by the fee or tax should be spent but proposes that proceeds go toward mitigating energy costs for consumers, reducing the deficit, protecting jobs, decreasing the tax liability for businesses and individuals and investing in other activities that could reduce carbon pollution.

The Waxman-Whitehouse draft, which has not been formally introduced into Congress or even finalized, is one of a few carbon tax proposals circulating in Washington. A measure by Sens. Barbara Boxer (D-Calif.) and Bernie Sanders (I-VT) was released last month. The same week as the release of the Waxman-Whitehouse draft, Republicans introduced a resolution that opposed a national carbon tax, citing its threat to the economy and businesses.

Two studies of a carbon tax have produced very different results. A study by the National Association of Manufacturers finds that a carbon tax starting at $20 per ton and rising 4 percent yearly would result in an economic slowdown. Meanwhile, a report by the Brookings Institution finds that a carbon tax could have benefits—including improving environmental outcomes and increasing economic efficiency.

A national poll released recently by Duke University found that 29 percent of the respondents strongly or somewhat supported a carbon tax. There was much more support surrounding a clean energy standard or other traditional measures to regulate greenhouse gas emissions.

Will “Fire Ice” Discovery Revolutionize the Energy Industry?

Japan has produced methane from methane hydrates, a fossil fuel that behaves like ice, from deep under the ocean for the first time. Deposits of the fuel source, known as “fire ice,” may be large enough to supply the country’s natural gas needs for years. An estimated 1.1 trillion cubic meters of gas are trapped off Shikoku Island. Japan hopes to convert the trapped methane into natural gas that could help address recent energy woes, but the Japanese government says it is still at least five years away from commercial extraction. Japanese officials point to the recent gas boom in the United States as evidence that complex drilling processes can yield big results—a fact that has Australia worried. Japan is Australia’s top natural gas customer.

The fuel source is also being explored in Canada and the United States, with the latter funding 14 research projects on methane hydrates. The U.S. Geological Survey estimates that naturally occurring gas hydrates could contain more than 100,000 trillion cubic feet of natural gas—potentially more organic carbon than the world’s coal, oil and other forms of natural gas combined. Recent mappings off the North Carolina and South Carolina coasts show large offshore accumulations of methane hydrate, but the potential environmental effects of drilling for hydrates remain little understood.

The Future of Nuclear Power

Monday marked the second anniversary of Japan’s tsunami and the Fukushima nuclear disaster. Before the meltdown at the Fukushima Daiichi plant, Japan was the third largest consumer of nuclear energy, behind the United States. Now just two of the country’s 50 operable reactors are online. With plans to phase out nuclear power by 2040, the long-term energy strategy is expected to bring higher electricity rates for consumers this year.

The future of nuclear remains less certain worldwide. The head of the Nuclear Regulatory Commission (NRC) recently told more than 3,000 industry executives, experts and government regulators that when it comes to commercial reactors they must be ready to deal with the unknown.

A new report by the Union of Concerned Scientists is more critical of the industry. It points to safety mishaps at nuclear plants across the United States in 2012. The study, released shortly after the NRC annual report card, details a dozen events.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.