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NASA's chief climate scientist advocates a carbon tax

Prior posts have noted the debate between various experts and interest groups over whether a carbon tax or cap-and-trade system, or some combination of both, would be most effective in reducing global warming and minimizing adverse localized impacts of air pollution. At a recent conference, NASA's (admittedly controversial) chief climate scientist, James Hansen, and others supported a carbon tax. Their form of the tax is interesting. The speakers proposed an "upstream" carbon tax, one that would be levied on the producers of oil, natural gas, and coal. The proceeds of the tax, however, rather than going to the general treasury, would be (among other uses) used as credits or financial support to consumers who implemented energy efficient measures (the speakers focused on improvements to homes, but the logic of the program could apply to any of a multitude of activities that have global warming impacts). The tax was viewed as part of a multi-pronged strategy that would also include energy efficiency building codes, appliance standards, and increased R&D for alternative energy resources. One speaker noted that cap-and-trade systems may lead to price volatility absent some of type of price cap mechanism. However, like all price controls, such an approach would appear to defeat the objective of a cap-and-trade strategy, which is to drive GHG reductions to be made in the most cost-effective manner. As has been noted in several prior posts, one of the criticisms of cap-and-trade that is made by "environmental justice" groups is that there is no certainty that such an approach will assure that the air quality of poor and minority areas will be improved, especially if firms are allowed to obtain offsets or credits for improvements undertaken elsewhere. See http://www.eesi.org/120908_tax, http://www.gao.gov/new.items/d09151.pdf, and http://video.google.com/videoplay?docid=8935138000820466453 [the latter is a video of the conference].