The U.S. Fish and Wildlife Service recently proposed the addition of the wolverine to the federal list of endangered species. The proposal asserted that global warming was largely to blame for the dramatic reduction in the wolverine's Rocky Mountain habitat and that, without listed protection, the species would face extinction. See Felicity Barringer, "U.S. Proposes to Protect the Wolverines," The New York Times (February 2, 2013). Rather than predators or logging, the wolverine joins a growing number of species, most notably the polar bear, whose survival is being impacted by climate change.
While much of the rhetoric in Washington, D.C. has revolved around the job climate, global warming is garnering significant attention since President Obama identified climate change as one of the top priorities for his second term in office. Interesting to this practitioner is that the growing discussion involves taxes as a part of the solution. Most industrialized national have implemented taxes on fuel and carbons released into the atmosphere, and many economists have posited that a tax on fuels and carbon emissions is the least expensive way overall to address climate change. Though the United States has not yet adopted this approach, there is currently a business tax credit offered for carbon dioxide sequestration (see IRC Section 38(b)(34)), and some momentum is building.
President Obama's first attempt at climate change was a proposal to set limits on carbon emissions, and required businesses to buy permits for their emissions. It was met with staunch opposition by farmers, corporations, and their lobbyists, on Capitol Hill. Will $35 billion in damages from Hurricane Sandy convince those that opposed climate change legislation that some kind of intervention is necessary? It seems unlikely. Any plan that increases corporate and agricultural costs of production is likely destined for gridlock. Paying for drought and flood-related damage in the short-term is still much less expensive.
In issuing the proposal regarding the listing of the wolverine, federal officials said they would not use the listing to try to regulate greenhouse gases and avert climate change. Without a plan to address the cause of the wolverine's habitat loss, the listing seems more like an obituary for the species.
What do you think of a tax to combat climate change? Under what conditions would you be willing to support such a tax? Your thoughts and comments are invited.
RELATED LINKS: For additional climate change-related tax information, see:
Lexis Tax Advisor - Federal Code IRC § 38(b)(4)
For further insight on the carbon dioxide sequestration business tax credit, see:
Discover the features and benefits of LexisNexis® Tax Center
For quality Tax & Accounting research resources, visit the LexisNexis® Store
For more information about LexisNexis products and solutions connect with us through our corporate site.