Rep. Waxman: Make industry pay for carbon emissions

By Suzanne Goldenberg, The Guardian

The way Henry Waxman sees it, Congress faces two huge challenges: cutting the deficit and protecting the country from the worst consequences of climate change. Why not act on both together? Cutting the US government deficit and protecting the country from the worst consequences of climate change can go hand in hand, according to a congressman who wants to put a price on carbon emission from industry.

Henry Waxman, the California Democrat who managed to pass a climate change bill through the house of representatives in 2009 – only to see it rejected in the Senate – on Monday put forward the idea that it may actually make things easier to deal with two extremely intractable and highly charged problems at once.

The start of 2013 is crunch time for deficit reduction. Both available options – raising taxes or cutting social spending – come with a heavy political price. But by finding a way to make industry pay for the emissions that cause global warming, Congress could find a new revenue stream, Waxman argued. "A price on carbon can bring in a substantial amount of money to deal with our fiscal problems," he said.

Waxman is shopping his idea just as Congress begins to re-engage on the battle over government spending. Paul Ryan, the house budget chairman, is due to release his new plan on Tuesday.

"We've got two major problems that are easier to solve together, the fiscal problem and climate change," Waxman said in a speech to the Centre for American Progress. The liberal thinktank has served as an incubator for a number of Barack Obama's policies - and provided jobs to departing officials from his administration. It had produced a similar version of Waxman's proposal last autumn, arguing that carbon prices would cut the deficit and create jobs.

The proposal would also revive the now-moribund idea of America taking economy-wide action on climate change in the near future. Waxman's proposal sees 2013 as the time to act.

The congressman said he was getting some positive responses to his idea, which he first presented in an opinion piece in the Washington Post. "Some people I have talked to in the administration and among my colleagues are thinking about it and found it interesting and some haven't thought about it at all," Waxman said. "It was never on the agenda."

The biggest obstacle, however, is political: Republicans in Congress are fiercely opposed to new taxes on industry, and many do not even accept the existence of human-caused climate change.

So far, Waxman has not found a single Republican currently serving in the House to back his proposal. The two Republicans who have supported him – Wayne Gilchrist and Sherwood Boehlert, both co-authors of the Post article – were forced out of Congress for being too moderate.

Gilchrist, a former Republican Congressman from Maryland, said the White House needed to push the idea. "President Obama needs to invite members of Congress to the White House to discuss issues of debt and the climate problem and see how they can be compatible," he said. "There probably needs to be a plan of action within the next year on how we move forward."

The first step for Waxman is for Democratic and Republican politicians to admit the possibility of a connection between deficit reduction and climate change – and they need to do that before Congress takes important decisions on tax cuts and the debt.

As Waxman and the others wrote in the Post: "We could slash our debt by making power plants and oil refineries pay for the carbon emissions that endanger our health and environment. This policy would strengthen our economy, lessen our dependence on foreign oil, keep our skies clean — and raise a lot of revenue.

"The best approach would be to use the sale of carbon allowances or a fee on carbon pollution. Using these policies, the US could raise $200bn [£126bn] or more over 10 years and trillions of dollars by 2050 while cutting emissions by 17% by 2020 and 80% by 2050, providing transition assistance to affected industries, and supporting investments in clean-energy technologies."

guardian.co.uk © Guardian News and Media 2012