A Carbon Tax for Transportation? – Maybe

Post date: Jan 15, 2013 8:24:59 PM

You may have seen some recent talk about the possibility of instituting a carbon tax in this country. (See for instance a recent Tom Friedman column and a recent Washington Post editorial.) The carbon tax is one of those discussion items that seems to come in cycles, and the current cycle seems to have been stimulated by the worsening climate change crisis.

In its “purest” form, the carbon tax has been thought of as a revenue-neutral way to discourage high-carbon fuel use. That’s the way it works in British Columbia, where all carbon tax revenues are refunded to taxpayers through reductions in other taxes. (For details on the BC system, see Tod Litman’s paper here.)

Now some folks are talking about a carbon tax as a revenue source for transportation. The Sightline Foundation people have suggested this at the state level in Washington state (here) and Senator Ben Cardin has launched the idea as a federal reauthorization revenue source (see interview here).

I’m still sorting out the pros and cons of a carbon tax for transportation, but I like the fact that it would send a strong signal that our national policy needs to vigorously encourage and support sustainable energy for transportation.