Nov 29, 2017

Four big problems with a carbon tax

The coal-fired Plant Scherer, one of the nation's top carbon dioxide emitters, in Juliette, Ga. Photo: Branden Camp / AP

In the movie The Secret Life of Pets, there's a part where two dogs are in dire straits, running away from a pack of angry dogs and lost in New York City's sewage pipes. One dog says to the other, "We've got a problem." The other responds: "We have so many problems. Which one do you mean at this moment?"

That's how I see things with a carbon tax, despite many economists insisting it's the best, simplest way to combat climate change. There's four big problems, as I explained at the Brookings Institution Tuesday:

  1. Most Republicans elected officials don't publicly say climate change is a problem in need of solutions. It's harder to tax something you don't acknowledge is something that needs to be reduced.
  2. Regardless of party, taxes are toxic. Hillary Clinton didn't support a carbon tax either. With universal GOP support and a handful of Democrats, the House approved a resolution in June 2016 to oppose a carbon tax. While symbolic, the vote nonetheless shows how politically toxic this remains.
  3. Where to draw the line preempting existing carbon regulations: where ExxonMobil draws that line is vastly different from where any environmental group ever would.
  4. How to spend the revenue raised: Lower other taxes? Give rebates to consumers? Put it toward clean-energy sources? Fossil fuel companies? It's a sticking point that helped lead to the downfall of a carbon tax ballot initiative in Washington state last year.

For now, the biggest problems in this Washington are the first two. When I ask Republican and conservative sources whether they'd prefer a carbon tax or a border tax as a way to raise money in tax reform, they don't have an answer. And I think ultimately the answer will be neither (for now).

Go deeper: Environmental think tank Resources for the Future just launched a handy carbon tax calculator. For example, a $40 carbon tax would increase gasoline prices on average by 36 cents.

Go deeper

Coronavirus kills 2 Diamond Princess passengers and South Korea sees first death

Data: The Center for Systems Science and Engineering at Johns Hopkins, the CDC, and China's Health Ministry. U.S. numbers include Americans extracted from Princess Cruise ship.

Two elderly Diamond Princess passengers have been killed by the novel coronavirus — the first deaths confirmed among the more than 600 infected aboard the cruise ship. South Korea also announced its first death Thursday.

The big picture: COVID-19 has now killed more than 2,200 people and infected over 75,465 others, mostly in mainland China, where the National Health Commission announced 118 new deaths since Thursday.

Go deeperArrowUpdated 6 hours ago - Health

SoftBank to cut its stake to get T-Mobile's Sprint deal done

Illustration: Rebecca Zisser/Axios

T-Mobile and Sprint announced a revised merger agreement that will see SoftBank getting a smaller share of the combined company, while most shareholders will receive the previously agreed upon exchange rate. The companies said they hope to get the deal as early as April 1.

Why it matters: The amended deal reflects the decline in Sprint's business, while leaving most shareholders' stake intact and removing another hurdle to the deal's closure.