HomeMy WebLinkAboutStaff Report 4.I 6/17/2013 - Late Doc .
Agend t Itenv4.1- bocu,vnenn.treceOvet,after &L endc+ cU tranttton.
Mattioli, Allison _
From: Crump, Katie
Sent: Monday,June 17, 2013 8:14 AM,
To: City Clerk
Subject: FW: Request to Agendize Resolution Supporting Revenue-Neutral Tax on Carbon
Late document
From: Bruce Hagen [mailto:brucekeyofh @gmail.com]
Sent: Sunday, June 16, 2013 12:50 PM
Cc: Crump, Katie; Dave Glass; Brown,John; councilman.albertson @gmail.com; Mike Harris; Michael Healy;
councilmemberkearney @me.com;.Kathleen Miller; Teresa Barrett
Subject: Re: Request to Agendize Resolution Supporting Revenue-Neutral Tax on Carbon
Mayor Glass, Council members, and Staff:
1 see that the letter of support for the revenue neutral carbon tax is on this
week's agenda. Thank you! I do not have a presentation planned, but I will
be there to answer any questions.
I've had conversations with some of you since I brought this topic to the
Council, and have attempted to answer in writing, below, some of the
chief concerns about the proposed national legislation. These include: the
potential regressive effects of the tax (on lower income households); the
cost of administration, and whether or not it can be made revenue-neutral;
the effects on competition and the clean energy industry; and the potential
of clean energy to replace carbon energy. It includes many links, including
a very thorough and well-documented FAQ from Citizens Climate Lobby.
(Note: our website is being redone in prep for our lobbying efforts later
this month. Some of the links may be broken. When I find out the status,
I'll update the letter. Meanwhile, here's the link to the FAQ on the old
site: http://citizensclimatelobby.org/node/444.)
Lastly, you may have noticed in today's (Sunday's) Press Democrat (page
AS) the Associated Press article on "Climate talk shifts from curbing to
adapting". http://globalnation.inquirer.neU77731/climate-talk-shifts-from-curbing-global-warming-to-
adapting. It says, "Discussions about global warming are happening more
often in mayors' offices than in Congress." This is a global issue, but
localities will bear the brunt of the costs, and have the obligation -- and the
opportunity -- to champion the cause of prevention. Together, we will
figure it out.
Thanks again for your support!
Bruce
Regressivity: What makes our proposal different than other proposals (like simply increasing taxes
on gasoline to allow funding for government subsidies for renewable energy) is this: 100% of the tax
revenue collected each month will be rebated monthly to households on an equal basis (for example,
if a billion dollars is collected in January 2015, each of the 100 million American households will get a
$10 rebate, with some adjustment for the size of the household.) Thus, if you spend an average
amount or less on climate-changing energy, your rebate will equal or exceed the higher price you
paid for that energy. While lower income households spend a greater percentage of their total income
on energy, their energy bills are typically at or below average, so they would not be penalized by this
approach.
The legislation does not attempt to adjust the rebate based on how much a household is currently
using, for two very good reasons. First, it would be an expensive administrative nightmare -
government bureaucracies would have to define and administer the formulas and exceptions.
Second, granting higher rebates to households that are contributing more to climate change works
against the purpose of the law, to drive carbon dioxide emissions down and minimize the damage of
climate change. As long as those households are contributing more to climate change, they should be
paying more.
There will be people who presently have higher greenhouse gas (GHG) impact and will be subject to
paying higher costs. To address this, the tax starts off low and increases gradually over the course of
around 10 years. This gives people both the time and financial resources to reduce their use of
climate changing energy, by changing behavior and investing their rebate money in efficiency and
green energy.
One final comment on regressivity: if we fail to stop and reverse climate disruption, it will be the poor
of this nation and of the world who will bear the brunt. You don't have to go to the lowlands of
Bangladesh, just look at the demographics of who lives in the Petaluma flood zone. And the midwest
farmers who will have to pay more for their diesel fuel to help save the climate will be facing a new
dust bowl if they don't.
Administrative costs: Any measure with any hope for reversing the growth in GHG will not be free,
but our proposal uses existing mechanisms for collecting taxes and issuing rebates. The carbon tax is
collected at the transaction point where the fuel enters the US economy and is already subjected to
existing taxes and fees, either at the mine, the wellhead, or the border. The rebates would be paid in
the same manner that stimulus rebates have been paid. This simplicity is in sharp contrast with Cap
and Trade, the other leading contender for addressing GHGs.
2
Revenue neutrality: we believe that saving the climate transcends the debate on whether or not to
increase or reduce government spending, on energy programs or anything else. These questions are
important, but should not stand in the way of implementing an effective market-based climate
solution. What is imperative is that we have support for this approach across the political spectrum.
With this support, crafting assurances that the tax will indeed be revenue-neutral should not be a
problem. British Columbia, for example, has adopted a revenue neutral carbon tax, which imposes a
stiff pay cut on the finance minister if all the revenue is not rebated to taxpayers. (see British
Columbia Carbon Tax for more about the BC law.)
Unfair competition: Our proposal puts a levy on imports from countries that do not have similar
taxes, and allocates the,revenues from that levy to subsidize imports from countries that do..This
approach is clearly within our rights under the provisions of the WTO
(see http://www.ccl2.vernetti.com/laser-talk-border-tax-adjustment/). For example, China's "cheap"
solar panels, which have driven domestic manufacturers out of the market, are made with power from
dirty coal. With our legislation, their price would reflect their true cost (recently, however, China is
showing interest in pursuing a carbon tax, in part to deal with their horrendous air pollution.)
Domestically, it's unfair that fossil fuel companies can externalize a huge cost of their product-- not
just the air pollution that causes asthma and crop damage, or the military and political cost of
importing oil from countries like Iran and Russia, but the climate debt we are leaving future
generations. Plus, taxpayers have been directly subsidizing our fossil fuel industry for decades, and
that needs to end. Our proposal would phase out those subsidies, as well as gradually put a market
price on the cost of climate change. The tax would stop increasing when we are on a trajectory to
bring GHGs down to a safe level.
Green Technology: All these fossil fuel subsidies are stifling adoption of the
hundreds existing energy efficiency and clean energy technologies that can greatly reduce our GHG
emissions. When I worked at PG&E, we used education and rebates to get customers to do simple
things like tuning up and maintaining their HVAC (heating, ventilation, and air conditioning) systems,
but it was hard to compete with "cheap" conventional energy. When American households,
businesses, inventors and entrepreneurs get the clear price signal that our legislation will create, we
will see an explosion of innovation and market adoption of clean energy technologies. For
example, Mark Jacobson, at Stanford University, and Mark Delucchi, at UC Davis, published in peer-
reviewed scientific journals a plan for how to provide electricity for the entire world by 2030 using only
wind, water, and solar technology already available in 2009 (see http://www.ccl2.vernetti.com/laser-
talk-carbon-free-enerqy-i n-20-30-years/)
For more information, take a 10 minute look at our Frequently Asked Questions,
here: http://www.ccl2.vernetti.com/about-us/faq/.
3