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    A Carbon Tax Could Cut the U.S. Deficit in Half

    Written by

    Brian Merchant

    Obama held onto his post, and now it’s time to govern again. Next up, that looming “fiscal cliff” everybody’s talking about. Unless that uncooperative pool of pols gets its act together to fix it, or more likely, punt it further down the road, taxes go up and social programs get the axe. Off the cliff we go.

    One longshot solution that some of the ballsier pundits are proffering: raise revenues and erase the deficit with a Carbon Tax. Ding industrial companies for every ton of CO2 they spew. But wait: Carbon? Tax? Why, that’s anathema to the modern Republican, you might say—they’d never agree to such a thing! But don’t they want to cut the deficit? They’re always talking about deficit, deficit. A decent carbon tax could plug it up right quick. Or what if it replaced payroll taxes? Then we’d be discouraging pollution, not employment, and the economy would swoon! Some prominent Republicans have proposed this very idea.

    A carbon tax could help decarbonize and modernize our economy, whilst simultaneously generating vast heaps of revenue. According to the latest report from Bloomberg, a carbon tax could HALVE THE DEFICIT in just ten years:

    A tax starting at $20 a metric ton of carbon dioxide equivalent and rising at about 6 percent a year could raise $154 billion by 2021, Nick Robins, an analyst at the bank in London, said today in an e-mailed research note, citing Congressional Research Service estimates. “Applied to the Congressional Budget Office’s 2012 baseline, this would halve the fiscal deficit by 2022,” Robins said.

    And that carbon tax would get companies to the business of reducing their emissions and buying cleaner power, stat. Especially if a mechanism was built in to continually raise the price tag. A carbon tax is a bona fide Good Idea. So, gents, we have a deal, right?

    Nope. Because, shhh! Here’s the secret: Republicans don’t actually want to reduce the deficit. They merely want to blame Obama for exploding it. Why else would they insist upon absurd and pointless new tax cuts to the wealthy? Or perpetually be expanding the already-bloated military budget? A: Because they don’t really care about deficits. And they certainly don’t want to do anything that might be scrawled underneath the ‘Goals’ column of Obama’s bedside journal.

    A carbon tax could be great; it could modernize energy production, reduce pollution, and even potentially stimulate hiring. A good one would ably provide revenue for cleantech funding, too. Republicans should consider it. Our economy, our air, our climate would be all the better for it. But the fossil fuel industry would throw an apocalyptic fit at the mere suggestion of such a thing. And unless Romney’s defeat has humbled the GOP into an unprecedentedly cooperative mood, don’t expect the words to even grace the lips of a sitting Republican politician unless they’re accompanied by a sneer.

    Obama’s victory may be game-changing, but nothing’s changed that much.