MSDI 2008

Carbon tax aff

carbon tax affirmative index
Carbon tax aff proper
carbon tax affirmative index.............................................................................................................................1 carbon tax 1ac...................................................................................................................................................4 carbon tax 1ac...................................................................................................................................................5 carbon tax 1ac...................................................................................................................................................6 carbon tax 1ac...................................................................................................................................................7 carbon tax 1ac...................................................................................................................................................8 carbon tax 1ac...................................................................................................................................................9 carbon tax 1ac.................................................................................................................................................10 carbon tax 1ac.................................................................................................................................................11 carbon tax 1ac.................................................................................................................................................12 carbon tax 1ac.................................................................................................................................................13 carbon tax 1ac.................................................................................................................................................14 carbon tax 1ac.................................................................................................................................................15 carbon tax 1ac.................................................................................................................................................16 carbon tax 1ac.................................................................................................................................................17 Inherency........................................................................................................................................................18 Energy policy inevitable.................................................................................................................................19 Energy policy inevitable.................................................................................................................................20 Energy policy inevitable.................................................................................................................................21 Energy policy inevitable.................................................................................................................................22 Energy policy inevitable.................................................................................................................................23 Generic solvency............................................................................................................................................24 Generic solvency............................................................................................................................................25 Generic solvency............................................................................................................................................26 Generic solvency............................................................................................................................................27 Generic solvency............................................................................................................................................28 Warming solvency..........................................................................................................................................29 Warming solvency..........................................................................................................................................30 Warming solvency..........................................................................................................................................31 Warming solvency..........................................................................................................................................32 Warming solvency..........................................................................................................................................33 Warming solvency..........................................................................................................................................34 Warming solvency..........................................................................................................................................35 Warming solvency..........................................................................................................................................37 Warming solvency..........................................................................................................................................38 Warming solvency..........................................................................................................................................40 Warming solvency..........................................................................................................................................41 Warming solvency..........................................................................................................................................42 Regulations solvency......................................................................................................................................43 Carbon taxes better than CAFÉ......................................................................................................................44 Economy solvency..........................................................................................................................................45 Economy solvency..........................................................................................................................................46 Oil solvency....................................................................................................................................................47 Oil solvency....................................................................................................................................................48 Oil solvency....................................................................................................................................................49 Oil solvency....................................................................................................................................................50 Oil solvency....................................................................................................................................................51 Global modeling.............................................................................................................................................52 Global modeling.............................................................................................................................................53 Taxes good......................................................................................................................................................54 Taxes good......................................................................................................................................................55 Price volatility – carbon tax solves.................................................................................................................56

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MSDI 2008

Carbon tax aff

Price volatility – economy..............................................................................................................................57 Cap-and-trade – price volatility......................................................................................................................58 Cap-and-trade – price volatility......................................................................................................................59 Cap-and-trade – price volatility......................................................................................................................60 Cap-and-trade – price volatility......................................................................................................................61 Cap-and-trade ↓ competitiveness....................................................................................................................62 Cap-and-trade - wealth transfer......................................................................................................................63 Cap-and-trade - wealth transfer......................................................................................................................64 Carbon tax solvency > Cap-and-trade............................................................................................................65 Carbon tax solvency > Cap-and-trade............................................................................................................66 Carbon tax solvency > Cap-and-trade............................................................................................................67 Carbon tax solvency > Cap-and-trade............................................................................................................68 Carbon tax solvency > Cap-and-trade............................................................................................................69 Carbon tax solvency > Cap-and-trade............................................................................................................70 Carbon tax solvency > Cap-and-trade............................................................................................................71 Carbon tax solvency > Cap-and-trade............................................................................................................73 Cap-and-trade – corruption.............................................................................................................................74 Cap-and-trade – corruption.............................................................................................................................75 Competitiveness addon...................................................................................................................................76 Warming is real...............................................................................................................................................77 Warming is real...............................................................................................................................................78 Warming – Africa module...............................................................................................................................79 China addon....................................................................................................................................................80 China addon....................................................................................................................................................81 China – soft landing........................................................................................................................................82 China – model.................................................................................................................................................83 China – model.................................................................................................................................................84 China – free trade............................................................................................................................................85 China – social unrest.......................................................................................................................................86 China – social unrest.......................................................................................................................................87 China – social unrest.......................................................................................................................................88 China – deforestation/biodiversity..................................................................................................................89 Transatlantic trade war....................................................................................................................................90 Transatlantic trade war....................................................................................................................................91 Transatlantic trade war....................................................................................................................................92 Transatlantic trade war....................................................................................................................................93 Terrorism – oil extensions..............................................................................................................................94 Terrorism – oil extensions..............................................................................................................................95 Oil impacts......................................................................................................................................................96 Soft power addon............................................................................................................................................97 Soft power addon............................................................................................................................................98 Soft power uniqueness....................................................................................................................................99 Environmental leadership links....................................................................................................................100 Environmental leadership links....................................................................................................................101 Generic soft power links...............................................................................................................................103 A2: States CP................................................................................................................................................104 A2: States CP................................................................................................................................................105 A2: States CP................................................................................................................................................106 A2: States CP................................................................................................................................................107 A2: Backstopping.........................................................................................................................................109 A2: Oil prices high........................................................................................................................................110 A2: Economy DA.........................................................................................................................................111 A2: Economy DA.........................................................................................................................................112 A2: Economy DA.........................................................................................................................................113 A2: Counterplans..........................................................................................................................................115 A2: Counterplans..........................................................................................................................................116

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MSDI 2008

Carbon tax aff

3

MSDI 2008

Carbon tax aff

carbon tax 1ac
Contention one: disadvantages are not unique Currently, state environmental-regulations as well as federal support for a cap-andtrade regime are increasing. Ian W.H. Parry and William A. Pizer, Rgulation, "Combating global warming: is taxation or cap-andtrade the better strategy for reducing greenhouse emissions?(ENVIRONMENT)" September 22, 2007
Recent events suggest that it may only be a matter of time before the federal government enacts a nationwide program to reduce emissions of carbon dioxide (CO2) and other greenhouse gases. First, several bills to control emissions have recently been introduced in Congress. Second, state action on a variety of fronts is threatening a patchwork approach to greenhouse emissions regulation that would be cumbersome for business. Third, a recent Supreme Court case has indicated that the Environmental Protection Agency already has the authority to
regulate greenhouse gas emissions meaning that if Congress does not act, the president can. Meanwhile, recent polls show a new and rising concern among ordinary Americans about climate change, as more C[O.sub.2] accumulates in the atmosphere and the earth continues to warm (see Figure 1). The favored federal policy to address climate change is a domestic capand-trade system that, in time, would naturally link to the emissions trading system recently established in Europe. However, just as the momentum for emissions trading seemed unstoppable, a vocal minority, including Sen. Chris Dodd (D-Conn.) and former vice president Al Gore, as well as Congressmen John Larsen (D-Conn.) and Pete Stark (D-Calif.), have begun arguing in favor of a C[O.sub.2] tax. And on close inspection, C[O.sub.2] taxes seem particularly attractive both for fiscal reasons and because they provide certainty over the price of emissions. So does this mean that policymakers should give up on emissions trading, or are there ways permit systems might be designed to capture the potential advantages of C[O.sub.2] taxes?

And, a federal cap-and-trade regime will be implemented early next year. Michael Northrop and David Sasson, Yale Environment, "States Take the Lead on Climate" June 3, 2008
As heartening as such moves are, the fact remains that the United States still needs a comprehensive national climate policy that will set national carbon reduction targets, put a national price on greenhouse gas emissions — either through a cap-and-trade system or a tax — and eliminate uneven standards among states. Proof that some federal action is needed can be seen in Texas, which is currently the sixth largest emitter of greenhouse gases worldwide, yet has not adopted a climate policy to reduce those emissions.

Make no mistake, climate legislation is coming, though almost certainly not until a new presidential administration takes office. Climate change will be the subject of loud political debate on Capitol Hill this summer when the
Senate considers America’s Climate Security Act — also known as Lieberman-Warner. But this will only be a dress rehearsal; few are under any illusion that final climate law will emerge from this initial exercise. In less than a year, however, this situation could easily be reversed. The new president will likely be a game-changing force, as all three top presidential contenders have committed themselves to tackling global warming. Also decisive might be the new movement of US governors who are publicly demanding a state-federal partnership to proactively address climate and energy issues. These demands were aired last month when 18 states signed such a declaration, issued at the Governors’ Conference on Climate Change at Yale University. The states’ record of fostering groundbreaking environmental policies that ultimately evolve into national law is well established. State innovation was, for example, at the heart of the battle against acid rain. State laws served as models for the federal Clean Air Act, Clean Water Act, and legislation creating Superfund sites. In addition to the cap-and-trade program that will be launched in September by the ten Eastern states in the Regional Greenhouse Gas Initiative (RGGI), two other regional groupings of states are working to establish carbon trading — the Western Climate Initiative and the Midwestern Governors Association. They have rolled up their sleeves, convened key stakeholders, and are hammering out the actual details of how to establish and implement an effective cap-and-trade mechanism. This is wisdom that would go a long

way in Washington as lawmakers debate Lieberman-Warner, which would create a national cap-and-trade program.

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MSDI 2008

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carbon tax 1ac
Advantage one: warming Recent comprehensive models confirm the scientific consensus that global warming is human-caused. ProfAnthony J. McMichael, Ph.D, Rosalie E. Woodruff Ph.D, and Simon Hales Ph.D, The Lancet, "Climate change and human health: present and future risks" March 2006 lexis
There is near unanimous scientific consensus that the rising atmospheric concentration of greenhouse gases due to human actions will cause warming (and other climatic changes) at Earth's surface. The Intergovernmental Panel on Climate Change (IPCC), drawing on the published results of leading modelling groups around the world, forecasts an increase in world average temperature by 2100 within the range 1.4-5.8C.1 The increase will be greater at higher latitudes and over land. Global average annual rainfall will increase, although many mid latitude and lower latitude land regions will become drier, whereas elsewhere precipitation events (and flooding) could become more severe. Climate variability is expected to increase in a warmer world. Climatological research over the past two decades makes clear that Earth's climate will change in response to atmospheric greenhouse gas accumulation. The unusually rapid temperature rise (05C) since the mid-1970s is substantially attributable to this anthropogenic increase in greenhouse gases.1,2 Various
effects of this recent warming on non-human systems are apparent.3?9 In view of greenhouse gas longevity and the climate system's inertia, climate change would continue for at least several decades even if radical international pre-emptive action were taken very soon.1,10 In the 1990s, climate change science relied on climate-system models with good atmospheric dynamics but simple representations of the ocean, land surface, sea ice, and sulphate aerosols, at coarse spatial resolution. Meanwhile, much has been learnt about how Earth's climate system responds to changes in natural and human generated effects: solar activity, volcanic eruptions, aerosols, ozone depletion, and greenhouse gas concentration. Today's global climate models are more

comprehensive: they include more detailed representations of the ocean, land-surface, sea-ice, sulphate and non-sulphate aerosols, the carbon cycle, vegetation dynamics, and atmospheric chemistry, and at finer spatial resolution.10 Recent understanding of how sea surface temperature affects the characteristics of tropical storms and
cyclones, and how ocean subsurface temperatures, thermocline depths and thicknesses affect activity of the El Nio Southern Oscillation (ENSO) cycle, tropical cyclone intensification, and landfall prediction will further enrich modelling capacity. Today's

models have been well validated against the recorded data from past decades. Climate model projections, driven by anticipated future greenhouse gas and aerosol emissions, indicate that Earth will continue to warm, with associated increases in sea level and extreme weather events. Modelling cannot be an exact science.
There is debate about humankind's future trajectories for greenhouse gas emission. There are residual uncertainties about the sensitivity of the climate system to future atmospheric changes. The range in the forecast increase in world average temperature (14?58C) by 2100 indicates both uncertainty about future greenhouse gas emissions and marginal differences in design of the several leading global climate models (UK, Germany, USA, etc). The spatial pattern of projected temperature and particularly rainfall changes also differ between models. Hence, estimates of climate changes over coming decades are indicative rather than predictive.1 Note also that the uncertainty is symmetrical: underestimation of future climate change is as likely as overestimation. Longer term, the probability of exceeding critical thresholds-causing step-changes in climate, environment

and related effects-will increase.1,10

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carbon tax 1ac
Now is the key time – failure to act ensures disastrous runaway warming. Jonathan Leake, Environment Editor, The Sunday Times (London), "Last warning: 10 years to save world" January 28, 2007 lexis
The world has just 10 years to reverse surging greenhouse gas emissions or risk runaway climate change that could make many parts of the
Scientists say rising greenhouse gases will make climate change unstoppable in a decade planet uninhabitable. The stark warning comes from scientists who are working on the final draft of a new report by the Intergovernmental Panel on Climate Change (IPCC). The report, due to be published this week, will draw together the work of thousands of scientists from around the world who have been studying changes in the world's climate and predicting how they might accelerate. They conclude that unless mankind rapidly stabilises greenhouse gas emissions and starts reducing

them, it will have little chance of keeping global warming within manageable limits. The results could include the destruction of the Amazon rainforest and the Great Barrier Reef, the forced migration of hundreds of millions of people from equatorial regions, and the loss of vast tracts of land under rising seas as the ice caps melt. In Europe the summers could become unbearably hot, especially in southern countries such as
Greece, Spain and Italy, while Britain and northern Europe would face summer droughts and wet, stormy winters. "The next 10 years are crucial," said Richard Betts, leader of a research team at the Met Office's Hadley Centre for climate prediction. "In that decade we have to achieve serious reductions in carbon emissions. After that time the task becomes very much harder." Among

the scientists' biggest fears is that rising temperatures and levels of greenhouse gases could soon overwhelm the natural systems that normally keep their levels in check. About half the 24 billion tons of carbon
dioxide generated by human activities each year are absorbed by forests and oceans -a process without which the world might already be several degrees warmer. But as CO2 levels rise and soils dry, microbes can start breaking down accumulated organic matter, so forests become net producers of greenhouse gases. The sea's power to absorb CO2 also falls sharply as it warms. The

latest research suggests the threshold for such disastrous changes will come when CO2 levels reach 550 parts per million (ppm), roughly double their natural levels. This is predicted to happen around 2040-50. "At the moment the
real impact of our emissions is buffered because CO2 is absorbed by natural systems. However, if we reach this threshold they could be magnified instead," said Betts. "It means we must start the action needed to reduce greenhouse gas emissions in the next few years." His warnings were backed up by Dr Malte Meinshausen, a researcher at the Potsdam Institute for Climate Impact Research in Germany. He has used computer modelling to work out what might happen if greenhouse gas emissions were cut immediately, in 10 years' time or later. His results showed that immediate action might allow mankind to hold CO2 levels at 450ppm -well below the 550ppm danger level. However, Meinshausen and his colleagues recognise that this is unrealistic because the world's governments are in such disarray over global warming. The best hope, they say, is that a global plan will emerge in the next few years, most likely from the renegotiations of the Kyoto treaty on reducing emissions. "We have to make sure carbon emissions peak no later than 2015 and then fall at around 3% a year. If we let them keep rising after that date it becomes much harder to bring them under control," said Meinshausen. His views were echoed by Dr Carol Turley of Plymouth Marine Laboratories who has been studying how rising CO2 levels are acidifying the ocean. When the gas dissolves in water it creates carbonic acid. "Rising acidity makes it much harder for marine organisms to build shells," she said. Turley, like the other scientists, has contributed to the IPCC report but all commented this weekend on the basis of already-published research. "If we do not take action in the next decade, by 2100 swathes of the ocean could have been stripped of creatures from plankton to coral reefs," she said. "Such changes would devastate ecosystems and fisheries."

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carbon tax 1ac
Human-caused emissions will overwhelm the potential for life – thus, extinction. John E. Brandenburg and Monica Rix Paxon, physicist rocket scientist, Mars expert, investigator on
MET project, NASA technical advisor, former member of space transport subcommittee ; writer and scientific editor, Dead Mars, Dying Earth, 1999, p.46 - 47 Gradually, incrementally, we are changing Earth’s atmosphere. But are we slowly altering our atmosphere away from something that supports human life toward something deadly like the atmosphere of Mars? Such an
atmosphere would have been very familiar to Joseph Black, who isolated the very first atmospheric gas. Unitarian minister Joseph Priestley would have recognized the atmosphere of Mars as well. So would coal miners from the early part of the 20th century and the canary that lay gasping at the bottom of the cage, for the atmosphere of Mars is made of fixed air. The atmosphere of Mars is made of blackdamp. The atmosphere of Mars is made of carbonic acid gas. The atmosphere of Mars is made of a substance that has over time had many names reflecting the toxic side of its nature. While today we call all of them “carbon dioxide” (which we think of as a benign product of our own bodies and the harmless bubbles in soda pop), this substance has clearly not always been viewed as a harmless gas. Nor should it be in the future, for it is time once again to inform our opinions about this substance and recognize its invisible, dark side. As long as a stylus attached to the monitoring equipment in some lonely station on the top of an inactive volcano in Hawaii continues to etch a line ratcheting upward—showing the increased amounts of carbon dioxide that, year after year, flood our atmosphere, threatening us—then we too must think of it very differently. It isn’t a matter of speculation. It

is a matter of hard, cold scientific fact supported by numerous studies conducted by many respected scientists.’7~ In the overwhelming majority they agree: Earth’s atmosphere has far too much of what we now must think of as carbon die-oxide. It is warming our planet to the point where life, human life, is endangered.
We are going to have to do something decisive and effective about this killer. No matter how successful or enlightened we think ourselves to be, we are not exempt from the need to act—in the same way that we are not exempt from the need to breathe.

And, global warming makes conflict across the globe inevitable. John E. Brandenburg and Monica Rix Paxon, physicist rocket scientist, Mars expert, investigator on
MET project, NASA technical advisor, former member of space transport subcommittee ; writer and scientific editor, Dead Mars, Dying Earth, 1999, p.223 - 2224 Sadly, one of the easiest predictions to make about global warming is that it will bring further war and turmoil to the Third World. The human race is the most unstable and sensitive part of the biosphere, particularly its economic
and political systems. The Third World exists mostly in the tropics, and it is there that both unstable politics and the full force of global warming will combine. Environmental stress is one of the great destroyers of rational discourse, and one the most powerful triggers of desperate action. We are probably already seeing the effects of global warming on the governments of the tropics. The first thing to go in the Third World will be peace, both domestic and foreign. Environmental stress will cause governments to abandon any pretense of democracy, or to disintegrate completely. One the most frightening things about the civil and national wars in Africa is their incomprehensibility to outsiders. But the problem of climate-induced anarchy is not limited to the Third World. Much of Miami, Florida was in a lawless state of looting and rioting for two days in August 1992 after the devastation of Hurricane Andrew. Only the National Guard was able to reestablish rule of law. As temperatures rise world wide, so will irrationality. Nation will rise against nation, not over anything as sophisticated as ideologies or oil, but over water and arable land. Turkey and Syria almost went to war in 1998; the pretext was terrorism, but the real cause was the water of the Euphrates.’ Somalia was the most ethnically homogenous country in Africa, a continent known for its tribal conflicts, and was thus considered the most stable of African nation states. But by 1990, Somalia, which sits on the edge of a desert, was embroiled in civil war, there was drought, and soon the nation was dying. Somalia was too well armed to be pacified and too chaotic to be conquered. Even in a weakened state, Somalia still managed to bite off the fingers of the hands that tried to feed it. So the world, in a sense, abandoned Somalia. The people of Somalia are starving again but the news networks will not, or cannot, cover the wretchedness there. Hopeless misery makes poor programming. So Somalia starves in a back alley of the global village. Out of sight, out of mind. Is this the model for coverage of future global-warming-produced disasters? Will we just avoid looking? Many chaotic places in the Third World lie on the edges of deserts or near the equator. As the world becomes hotter, the populations of these places, whose resources are almost down to zero, become more desperate and irrational. Disputes that formerly were resolved now often flare into bloodshed. In southern Algeria, where Muslim fanatics engage in pitiless slaughter, the southern regions, the fringes of the Sahara, have become so hot they are uninhabitable. In Rwanda, almost on the equator, where ethnic hatred led to genocide on a scale not seen since the Nazis, one of the problems was high population density The fact that ground temperatures are rising naturally makes human tempers rise and probably makes overcrowding even more unbearable. In Rwanda, as has happened so many times before in our history, humanity’s killer instinct was awakened as people savagely fought to reduce competition for vital resources.

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These conflict go nuclear. Mark Townsend and Paul Harris, The Observer, February 22, 2004 lexis
Climate change over the next 20 years could result in a global catastrophe costing millions of lives in wars and natural disasters. A secret report, suppressed by US defence chiefs and obtained by The Observer, warns that major European cities will be sunk beneath rising seas as Britain is plunged into a 'Siberian' climate by 2020. Nuclear conflict, mega-droughts, famine and widespread rioting will erupt across the world. The document predicts that abrupt climate change could bring the planet to the edge of anarchy as countries develop a nuclear threat to defend and secure dwindling food, water and energy supplies. The threat to global stability vastly eclipses that of terrorism, say the few experts privy to its contents. 'Disruption and conflict will be endemic features of life,' concludes the Pentagon analysis. 'Once again, warfare would define human life.'

Additionally, global warming will cause mass disease outbreaks. Union Of Concernced Scientists, 2003
http://www.ucsusa.org/global_environment/global_warming/page.cfm?pageID=508 Climate change affects the occurrence and spread of disease by impacting the population size and range of hosts and pathogens, the length of the transmission season, and the timing and intensity of outbreaks (McMichael, 1996; McMichael et al., 1996; Epstein et al., 1998; Epstein, 1999). In general, warmer temperatures and greater moisture will favor extensions of the geographical range and season for vector organisms such as insects, rodents, and snails. This in turn leads to an expansion of the zone of potential transmission for many vector-borne diseases, among them malaria, dengue fever, yellow fever, and some forms of viral encephalitis. Extreme weather events such as heavy rainfall or droughts often trigger disease outbreaks, especially in poorer regions where treatment and prevention measures may be inadequate.

The spread of these diseases risks global extinction John D. Steinbrunner, Senior Fellow at Brookings Institution, Foreign Policy, “Biological weapons: A plague upon all houses” 1998
It is a considerable comfort and undoubtedly a key to our survival that, so far, the main lines of defense against this threat have not depended on explicit policies or organized efforts. In the long course of evolution, the human body has developed physical barriers and a biochemical immune system whose sophistication and effectiveness exceed anything we could design or as yet even fully understand. But evolution is a sword that cuts both ways: New diseases

emerge, while old diseases mutate and adapt. Throughout history, there have been epidemics during which human immunity has broken down on an epic scale. An infectious agent believed to have been the plague
bacterium killed an estimated 20 million people over a four-year period in the fourteenth century, including nearly one-quarter of Western Europe's population at the time. Since its recognized appearance in 1981, some 20 variations of the HIVvirus have infected an estimated 29.4 million worldwide, with 1.5 million people currently dying of aids each year. Malaria, tuberculosis, and choleraonce thought to be under control-are now making a comeback. As we enter the twenty-first century, changing conditions have enhanced the potential for widespread contagion. The rapid growth rate of the total world population, the unprecedented freedom of movement across international borders, and scientific advances that expand the capability for the deliberate manipulation of pathogens are all cause for worry that the problem might be greater in the future than it has ever been in the past. The threat of infectious pathogens is not just an issue of public

health, but a fundamental security problem for the species as a whole.

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Also, international scientific studies prove warming will destroy millions of species. Green Clippings 2004
http://www.greenclippings.co.za/gc_main/article.php?story=2004011412162191 A massive international scientific study, promoted by a series of workshops by the World Conservation Union and published in the scientific journal Nature, claims that unless greenhouse gas emissions causing global climate change are drastically reduced, at least one million species - a quarter of all animals and plants on Earth may become extinct within the next 50 years. These losses could include 30-40% of SA's protea plant species, and up to 60% of all species in the Kruger National Park. Scientists studied six biodiversity-rich regions around the world,
representing 20% of the planet's surface area, using computer models to project the future distributions of various species in response to changing temperatures and climatic conditions. Three different climate change scenarios were considered as well as the ability of animals and plants to move to new areas. They found that 15% to 37% of all species in the regions considered could be driven to extinction by climate change likely to occur between now and 2050, for the mid-range climate warming scenarios.

Biodiversity loss causes planetary extinction David N. Diner, Judge Advocate General’s Corps of US Army, Military Law Review, 1994 Lexis
No species has ever dominated its fellow species as man has. In most cases, people have assumed the God-like power of life and death -- extinction or survival -- over the plants and animals of the world. For most of history, mankind pursued this domination with a single-minded determination to master the world, tame the wilderness, and exploit nature for the maximum benefit of the human race. n67 In past mass extinction episodes, as many as ninety percent of the existing species perished, and yet the world moved forward, and new species replaced the old. So why should the world be concerned

now? The prime reason is the world's survival. Like all animal life, humans live off of other species. At some point, the number of species could decline to the point at which the ecosystem fails, and then humans also would become extinct. No one knows how many [*171] species the world needs to support human life, and to find out -- by allowing certain species to become extinct -- would not be sound policy. In addition to food, species
offer many direct and indirect benefits to mankind. n68 2. Ecological Value. -- Ecological value is the value that species have in maintaining the environment. Pest, n69 erosion, and flood control are prime benefits certain species provide to man. Plants and animals also provide additional ecological services -- pollution control, n70 oxygen production, sewage treatment, and biodegradation. n71 3. Scientific and Utilitarian Value. -- Scientific value is the use of species for research into the physical processes of the world. n72 Without plants and animals, a large portion of basic scientific research would be impossible. Utilitarian value is the direct utility humans draw from plants and animals. n73 Only a fraction of the [*172] earth's species have been examined, and mankind may someday desperately need the species that it is exterminating today. To accept that the snail darter, harelip sucker, or Dismal Swamp southeastern shrew n74 could save mankind may be difficult for some. Many, if not most, species are useless to man in a direct utilitarian sense. Nonetheless, they may be critical in an indirect role, because their extirpations could affect a directly useful species negatively. In a closely interconnected ecosystem, the loss of a species affects other species dependent on it. n75 Moreover, as the number of species decline, the effect of each new extinction on the remaining species increases dramatically. n76 4. Biological Diversity. -- The main premise of species preservation is that diversity is better than simplicity. n77 As the current mass extinction has progressed, the world's biological diversity generally has decreased. This trend occurs within ecosystems by reducing the number of species, and within species by reducing the number of individuals. Both trends carry serious future implications. Biologically diverse ecosystems are characterized by a large number of

specialist species, filling narrow ecological niches. These ecosystems inherently are more stable than less diverse systems. "The more complex the ecosystem, the more successfully it can resist a stress. . . . [l]ike a
net, in which each knot is connected to others by several strands, such a fabric can resist collapse better than a simple, unbranched circle of threads -- which if cut anywhere breaks down as a whole." n79 By causing widespread extinctions, humans have

artificially simplified many ecosystems. As biologic simplicity increases, so does the risk of ecosystem failure. The spreading Sahara Desert in Africa, and the dustbowl conditions of the 1930s in the United States are relatively mild examples of what might be expected if this trend continues. Theoretically, each new animal or plant extinction, with all its dimly perceived and intertwined affects, could cause total ecosystem collapse and human extinction. Each new extinction increases the risk of disaster. Like a mechanic removing, one by one, the rivets from an aircraft's wings, [hu]mankind may be edging closer to the abyss.

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Advantage two: oil Reports indicate that we are quickly approaching peak oil. Paul Syvret, The Courier Mail (Australia), "A Crude Awakening" September 25, 2007 lexis
petrol is getting more expensive because crude oil prices are at record highs, and many resource economists argue the world is nearing a time of ''Peak Oil'' -- that stage where our capacity to pump the stuff out of
Firstly, the ground is insufficient to meet global demand. Petrol prices are also largely dependent on the price of refined petrol in Singapore. Australian wholesale prices mirror Singapore market prices because Australian refiners have to compete against petrol imports and Singapore is a major refining centre. Like it or not petrol is an international traded commodity, and Australia is part of that global market. Secondly, don't forget that petrol prices in Australia are among the cheapest in the OECD (prices in the UK, for example, are about double what we endure here). Surely even a politician with only the most rudimentary grasp of basic economics would understand that market competition is the most effective way to keep prices down -- not regulation. And competition does exist in the petrol market. In spades. This is evidenced by the discounting cycles you see as petrol stations cut margins to lift sales (remember here that most profits for a petrol station come from other retail, not fuel) and competitors follow suit. What is particularly astounding is that this populist panacea is being proposed just a week after Cabinet received a weighty report on oil sustainability in Queensland. The report -- compiled by a team of experts chaired by the new Minister for Sustainability, Andrew McNamara -- warned that we are fast approaching the time of Peak Oil and need to take drastic steps to reduce our reliance on liquid fuels. It specifically stressed the need to increase our investment in public transport, encourage development of alternative fuels, reduce petrol consumption, and rethink our approach to urban planning.

With the end of oil looming – global economic depression and war are inevitable. Paul Roberts (energy expert and writer for Harpers) 2004, The End of Oil, pg.12-13
Suppose, for example, that worldwide oil production hits a kind of peak and that, as at Ghawar, the amount of oil that oil
companies and oil states can pull out of the ground plateaus or even begins to decline — a not altogether inconceivable scenario. Oil is finite, and although vast oceans of it remain underground, waiting to be pumped out and refined into gasoline for your Winnebago, this is old oil, in fields that have been known about for years or even decades. By contrast, the amount of new oil that is being discovered each year is declining; the peak year was 1960, and it has been downhill ever since. Given that oil cannot be produced without first being discovered, it is inevitable that, at some point, worldwide oil production must peak and begin declining as well — less than ideal circumstances for a global economy that depends on cheap oil for about 40 percent of its energy needs (not to mention 90 percent of its transportation fuel) and is nowhere even close to having alternative energy sources. The last three times oil production dropped off a cliff — the Arab oil embargo of 1974, the Iranian revolution in 1979, and the 1991 Persian Gulf War — the resulting price spikes pushed the world into recession. And these disruptions were temporary. Presumably, the effects of a long-term permanent disruption would be far more gruesome. As prices rose, consumers would quickly shift to other fuels, such as natural gas or coal, but soon enough, those supplies would also tighten and their prices would rise. An inflationary ripple effect would set in. As energy became more expensive, so would such energy-dependent activities as manufacturing and transportation. Commercial activity would slow, and segments of the global economy especially dependent on rapid growth — which is to say, pretty much everything these days — would tip into recession. The cost of goods and services would rise, ultimately depressing economic demand and throwing the entire economy into an enduring depression that would make

1929 look like a dress rehearsal and could touch off a desperate and probably violent contest for whatever oil supplies remained.

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Immediate action is key to a soft landing Paul Roberts, energy expert and writer for Harpers, The End of Oil, 2004, p. 331
Frankly, though, the thought of any kind of delay, no matter how rationally justified, terrifies me. No matter how successful or diverse our technology portfolio is, and no matter what kind of time frame we are working with, the sheer magnitude and

complexity and unpredictability of the task at hand gives us little choice but to start transforming our energy system now. Energy poverty is not some future problem that may or may not materialize, but one that is occurring right now and will generate widespread instability and conflict if it is not immediately addressed. Even the long-term energy problems, like the decline of cheap oil or rising CO2 concentrations, call for immediate action. It may be true that we can take two or even three decades to deploy carbon-free technologies and policies without seriously exceeding our 550ppm carbon budget. The point to remember here, though, is that to have those technologies ready by 2030, we need to start working on them today. Starting now dramatically improves our chances of success, because it means we have more options, more freedom in how we deal with our energy problems. Starting now will allow our solutions more time to work, which means that we could take the cheaper, low-intensity
routes — the incremental improvements in energy efficiency, for example, or the gradual improvements from low- to no-emission cars, or the cost-effective phasing out of coal-fired power plants — rather than having to make a last-minute, potentially ruinous leap to fuel cells. Starting now means we can test a fuller range of energy technologies and develop a full range of energy tools and methods and policies that give us an energy economy that is more diverse, more flexible, and, we hope, more effective.Conversely, the costs of inaction are significant. Each year that we fail to commit to serious energy research and development or fail to begin slowing the growth of energy demand through fuel efficiency, each year that we allow the markets to continue treating carbon as cost-free, is another year in which our already unstable energy economy moves so much closer to the point of no return. Every delay means that our various energy gaps, when we finally get around to addressing them, will be wider and costlier to fill. By then, it will be too late for low-cost solutions and diverse portfolios and smooth, incremental transitions. Instead, we will need largescale solutions that can be deployed rapidly. Little room will remain for concerns about sustainability or efficiency or equity, and our chances for long-term success will be seriously impaired.

Hard landing ensures global economic collapse causing nuclear Armageddon. Lt. Col. Tom Beardon, PhD in Nuclear Engineering, “Zero-Point Energy” April 25, 2000
http://www.cheniere.org/correspondence/042500%20-%20modified.htm) Just prior to the terrible collapse of the World economy, with the crumbling well underway and rising, it is inevitable that some of the weapons of mass destruction will be used by one or more nations on others. An interesting result then— as all the old strategic studies used to show—is that everyone will fire everything as fast as possible against their
perceived enemies. The reason is simple: When the mass destruction weapons are unleashed at all, the only chance a nation has to survive is to desperately try to destroy its perceived enemies before they destroy it. So there will erupt a spasmodic unleashing of the long range missiles, nuclear arsenals, and biological warfare arsenals of the nations as they feel the economic collapse, poverty, death, misery, etc. a bit earlier. The ensuing holocaust is certain to immediately draw in the major nations also, and literally a hell on earth will result. In short, we will get the great Armageddon we have been fearing since the advent of the nuclear genie. Right now, my personal estimate is that we have about a 99% chance of that scenario or some modified version of it, resulting.

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Plan: The United States Federal Government should implement revenue-neutral carbon taxes in the United States. The revenue-neutral carbon taxes should start at $37 per ton of carbon, ramped up each year for at least 10 years.

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Contention two: solvency Carbon taxes will successfully mitigate global warming – a starter tax of $37 per ton of carbon is key. Lorna Salzman, "The Politics of Calming the Climate Crisis" September 15, 2005
http://www.lornasalzman.com/collectedwritings/PoliticalClimateChange.html
Why carbon taxes are equitable. With taxes on fossil fuels, those who consume the most would pay the most. Those who consume the least would pay the least. Thus, those people owning large houses or SUVs or power boats or several cars would bear, finally, their fair share of the burden and pay more into the carbon tax fund. Those with compact cars or who use bicycles or public transportation would pay less. Carbon taxes are thus equitable and progressive, unlike sales taxes, which are regressive and penalize the poor more than the wealthy. Since oil and gas will never again be cheap, consumers need to decide whether to pay more for oil and allow oil companies to reap higher and higher profits, or pay more to create a carbon tax fund to compensate consumers in other ways for higher prices. Some prefer to call this "tax shifting”: taxing fossil fuels more while reducing or eliminating taxes elsewhere. Why carbon taxes are the most practical way to spur reduction in energy use. Attempts to regulate energy

efficiency and reduce consumption are only randomly effective and cannot contribute to the urgent need to reduce fossil fuel consumption in the next two decades, the period in which such consumption must be curbed and reversed if we are to mitigate the most serious impacts of global warming. Besides rationing,
carbon taxes are the easiest and clearest way to reduce fossil fuel use and they also conform to the "free market" philosophy of minimal government interference and regulation. They also conform to the principle that The Polluter Pays. In this case, the largest energy consumers are the largest polluters and thus pay the most. Potential tax and public benefits of carbon taxes. Even with an

initially modest carbon tax of $37 per ton of carbon (equal to about 10 cents per gallon of gasoline), US CO2 emissions could be reduced by 5% over time, and could raise an estimated $60 billion revenue, equaling the 2004 budget deficits of all fifty states. Over time this tax would be gradually increased, thus bringing in more revenue while allowing the development and application of renewable energy technologies. Carbon
taxes could be used in various ways: either returned as tax rebates or credits, or placed in a dedicated fund for things like education, energy efficiency, public transportation, health, etc. Thus, continual funds would be made available for the programs and services most used by the less affluent. They could also substitute for regressive taxes like the sales or property tax, and would, if used to spur renewable energy, create new jobs. With carbon tax revenues dedicated to public interest uses, the poor would be compensated many times over for higher energy costs.

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And, carbon taxes will snowball internationally, plummeting carbon emissions. Jim Hansen, Ph.D. (Physics), Professor of Earth and Environmental Sciences at Columbia, "Carbon Tax and 100% Dividend – No Alligator Shoes!" June 4, 2008
http://www.columbia.edu/~jeh1/mailings/20080604_TaxAndDividend.pdf Tax and 100% dividend can drive innovation and economic growth with a snowballing effect. Carbon emissions will plummet far faster than in top-down or Manhattan projects. A clean environment that supports all life on the planet can be restored. “Carbon tax and 100% dividend” is spurred by the recent “carbon cap”
discussion of Peter Barnes and others. Principles must be crystal clear and adhered to rigorously. A tax on coal, oil and gas is simple. It can be collected at the first point of sale within the country or at the last (e.g., at the gas pump), but it can be collected easily and reliably. You cannot hide coal in your purse; it travels in railroad cars that are easy to spot. “Cap”, in addition, is a euphemism that may do as much harm as good. The public is not stupid. The entire carbon tax should be returned to the public, with a monthly deposit to their bank accounts, an equal share to each person (if no bank account provided, an annual check – social security number must be provided). No bureaucracy is needed to figure this out. If the initial carbon tax averages $1200 per person per year, $100 is deposited in each account each month (Detail: perhaps limit to four shares per family, with child shares being half-size, i.e., no marriage penalty but do not encourage population growth). A carbon tax will raise energy prices, but lower and middle income people, especially, will find ways to reduce carbon emissions so as to come out ahead. Product demand will spur economic activity and innovation. The rate of infrastructure replacement, thus economic activity, can be modulated by how fast the carbon tax rate increases. Effects will permeate society. Food requiring lots of carbon emissions to produce and transport will become more expensive and vice versa – it is likely, e.g., that the UK will stop importing and exporting 15,000 tons of waffles each year. There will be a growing price incentive for life style changes needed for sustainable living. The present political approach is to set carbon emission reduction goals for 2025 or 2050. The politicians do not expect the goals to be reached, and they define escape hatches that guarantee they will not. They expect to be retired or become lobbyists before the day of reckoning. The goals are mainly for bragging rights: “mine is bigger than yours!” The

worst thing about the present inadequate political approach is that it will generate public backlash. Taxes will increase, with no apparent benefit. The reaction would likely delay effective emission reductions, so as to practically guarantee that climate would pass tipping points with devastating consequences for nature and humanity. Carbon tax and 100% dividend, on the contrary, will be a breath of fresh air, a boon and boom for the economy. The tax is progressive, the poorest benefitting most, with profligate energy users forced to pay for their
excesses. Incidentally, it will yield strong incentive for aliens to become legal; otherwise they receive no dividend while paying the same carbon tax rate as everyone. Special interests and their lobbyists in alligator shoes will fight carbon tax and 100% dividend tooth and nail. They want to determine who gets your tax money in the usual Washington way, Congress allocating money programby-program, substituting their judgment for that of the market place. The lobbyists can afford the shoes. Helping Washington figure out how to spend your money is a very lucrative business. But we can save the planet and alligators by making sure that not one thin dime of the carbon tax is siphoned off by lobbyists for their clients – 100% must be returned to citizens as dividend. Make this your motto: “100% or fight! No alligator shoes!” Check the position of your congresspersons. If they spout things like “global warming is the greatest hoax in the history of the universe”, check the shoes of the people who visit them or have dinner with them.

Changes in Congress are needed if we want our children and grandchildren to win this one. Because of great benefits to the nation, humanity and nature, this approach soon would be adopted by other nations, providing an obvious path toward international agreements.

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Enacting a Carbon Tax would eliminate our oil dependency within a decade. Christopher Dodd April 27, 2007 The Boston Globe A corporate carbon tax
http://www.boston.com/news/globe/editorial_opinion/oped/articles/2007/04/27/a_corporate_carbon_tax/ accessed June 23, 2008
With time so short, I proposed a comprehensive energy plan last week to make that future a reality in the near term. My plan includes tough fuel efficiency standards that would require that every new car get 50 miles to the gallon by 2017. It would make historic investments in biofuels produced out on our farms and invest in hybrid and plug-in hybrid vehicles to ensure that being wealthy is never a prerequisite for being green. And it would draw on the purchasing power of the government by requiring federal buildings and vehicles be equipped with the latest energy efficiency technologies, because it's time our government leads by example. Each of these steps, and others, would create economic incentives to move away from polluting, carbon-emitting technologies and toward cleanburning, energy efficient ones, helping us eliminate our dependence on Middle East oil by 2015. Of course, with all our wealth, there is no doubt that America can make all the clean energy investments in the world. But if fossil fuel energy sources remain the cheapest option, we will never make the transition to a cleaner, more sustainable future. That's why, in addition to whatever else we do, America must enact a corporate carbon tax. Used in conjunction with cap and trade systems that allow clean corporations to sell pollution credits to dirtier companies, a corporate carbon tax can be implemented quickly, affect every energy sector, and above all provide the strongest disincentive possible to polluting. Some argue that corporations would simply pass on costs of a corporate carbon tax to consumers. But in an era where the price of gasoline already jumps 30 to 40 cents in only a few weeks' time, such arguments ring decidedly hollow. You cannot be serious about acting on the urgent threat

of global warming, about making us less captive to Middle East oil, or investing in renewable energy, unless you have a corporate carbon tax that eliminates the last incentive to pollute: that it's cheaper. With all we are facing -from health and environmental concerns to war abroad -- making dirty energy a less attractive option to consumers and business is nothing to be afraid of. But it's particularly attractive because the revenues of a corporate carbon tax can be used to bring the cost of clean energy down. Used to fast-track renewable energy research and development and deployment of clean energy and energy efficient technologies, a corporate carbon tax would generate more than $50 billion annually, helping us get technologies out of the laboratories and onto our roads and into our homes and businesses, jumpstarting America's global competitiveness in the process. But above all else, a corporate carbon tax sends a powerful message: that America

will lead the world on climate change, helping polluting countries from developing nations to China take the steps they need to get this crisis under control. With the right leadership, the United States will emerge as that leader. But if the last six years is any indication, it won't happen on its own. It will take choices that are not only tough but
smart and a president who is honest with the American people about the stakes. A president who shows us that with the right leadership, America will not suffer by tackling global warming and ridding ourselves of Middle East oil, but prosper. Getting this challenge right comes down to a simple, fundamental belief about America -- that we have always drawn our strength from our unique ability to come together around our best, most innovative ideas in common purpose, making our country and world stronger. With the stakes of global warming so high, the American people are ready to do that again. They're ready to change course -- to move away from polluting energy sources and toward a cleaner future. And with the right leadership, they will be ready for a corporate carbon tax. It's a big idea whose time has come.

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Carbon taxes key to energy efficiency and technological innovation. Paul Anderson, Chairman and CEO, Duke Energy, “Grabbing the Carbon Elephant” 2005
six states have enacted climate change legislation, and others are considering following suit. We can’t afford a patchwork of inconsistent state or local regulations that will complicate and increase the cost of compliance. But a patchwork is exactly what we are getting. Our industry would be far better served by a uniform federal approach. That’s why I believe we must be proactive on the issue of global climate change. We can no longer ignore the elephant
Much of the developed world is already addressing this issue through the Kyoto Protocol. In the U.S., in the room. From a business standpoint, it makes sense to advocate a federal policy approach that addresses the issue in an equitable, efficient manner. What we need is an economy-wide solution that provides incentives for companies and individual consumers alike to reduce the carbon they emit from all sources. The best approach to drive these reductions—and the technological innovations that will help achieve them—is a broad-based carbon tax, which addresses carbon dioxide emissions from all sectors of the economy, including transportation, manufacturing and power generation. Here’s why: A

well-crafted carbon tax that starts at a modest rate and increases gradually and predictably over time can establish incentives throughout the U.S. economy to reduce carbon dioxide emissions with minimal disruption. First, it would provide incentives for everyone to conserve. Second, it would promote higher utilization of existing power plants that are low emitters of carbon and encourage low-carbon fuel choices for the future. And third, it would encourage the development of new technologies. A carbon tax would allow us to share the cost of reducing greenhouse gas emissions across all sectors of the economy—and minimize the disruption of any one area. An economy-wide carbon tax is the least prescriptive policy approach as it does not mandate
reductions in any one sector. Compared to other market-based approaches, such as “cap-and-trade” policies, a carbon tax provides greater certainty regarding cost impacts. A carbon tax would not mandate targeted reductions from one sector or another, but would instead send economic signals that enable businesses and individuals to make informed decisions. For this reason, many economic experts believe that a carbon tax is more efficient than a cap-and-trade policy for addressing climate change over the long-term. To

be clear, adoption of a carbon tax need not increase the overall tax burden—instead, revenues from a carbon tax could support reductions in inefficient existing taxes on productive labor and investment. And
even if climate change turns out to be less of a problem than many might think, a carbon tax is a “no regrets” policy that will result in lower overall air emissions and the benefits of greater energy efficiency. Why would the CEO of a large energy company advocate less energy consumption? Because it’s important to take the long view on environmental as well as economic issues. And it’s also where my faith in American innovation comes in. A mandate to benefit the environment will spur the kind of

technology innovation that we saw in the last century. Innovation that propelled us to become the world’s leading economy. Set the right goals and Americans can and will lead the way. Our international competitors—motivated by mandatory emissions reductions—have gotten a head start. Japan is the world leader in solar power and hybrid cars, and Europe leads in wind power. Their economies will benefit from greater energy efficiency, and ours will be disadvantaged if we lag behind.

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Cap-and-trade fails - international regimes would be politically unsustainable because they like definite property rights - this also causes enormous price fluctuations. Kenneth P. Green, resident scholar, Steven F. Hayward, F. K. Weyerhaeuser Fellow, and Kevin A. Hassett, senior fellow and director of economic policy studies at AEI, American Enterprise Institute, "Climate Change: Caps vs. Taxes" June 2007
Additional pitfalls and dilemmas of emissions trading can be seen through a review of the spectacular trading failure of the RECLAIM (Regional Clean Air Incentives Market) emissions-trading program in Southern California.
Launched in 1994 after three years of development, RECLAIM set in motion an emissions-trading program targeting SO2 and nitrogen oxides (NOx) emissions, and eventually hoped to expand to include volatile organic compound (VOC) emissions. All three types of emissions are important precursors to ozone formation in the greater Los Angeles air basin. RECLAIM, for the first time, offered swaps between stationary and mobile sources: stationary sources such as oil refineries could help reach their emissions reduction targets by purchasing old, high-polluting automobiles and trucks and taking them off the road--a cost-effective measure in a voluntary demonstration program. The South Coast Air Quality Management District (SCAQMD) estimated that SO2 and NOx would be reduced by fourteen and eighty tons per day, respectively, by the year 2003, at half the cost of the usual prescriptive method of regulation.[7] There was great public support and enthusiasm for the program at the outset. RECLAIM never came close to operating as predicted, and was substantially abandoned in 2001. Between 1994 and 1999, NOx levels

fell only 3 percent, compared to a 13 percent reduction in the five-year period before RECLAIM. There was extreme price volatility aggravated by California's electricity crisis of 2000. NOx permit prices ranged from
$1,000 to $4,000 per ton between 1994 and 1999, but soared to an average price of $45,000 per ton in 2000, with some individual trades over $100,000 per ton. Such high prices were not sustainable, and SCAQMD removed electric utilities from RECLAIM in 2001. SCAQMD also dropped its plan to expand RECLAIM to VOCs. Despite the hope that RECLAIM

would be simple and transparent, there were serious allegations of fraud and market manipulation, followed by the inevitable lawsuits and criminal investigations. One particular problem with RECLAIM that is likely to plague any international GHG emissions-trading regime is the lack of definite property rights to the emissions allowances the program creates. A cliché of the moment is that industry would like some clarity and certainty about any prospective GHG regulatory regime. A cap-and-trade program, however, cannot provide certainty precisely because emissions allowances are not accorded real property rights by law.[8] The government can change the rules at any time, making emissions allowances worthless. This is exactly what happened to electric utilities in Los Angeles: their allowances were terminated, and the utilities were subsequently
required to install specified emissions-control technologies and to pay fines for excess emissions. In effect, some Los Angeles firms had to pay three times over for emissions reductions. A GHG emissions-trading scheme on an international level will be even more vulnerable to these kinds of unpredictable outcomes. To the extent that a GHG emissionstrading program results in international cross-subsidization of the economies of trading partners, it is going to be politically

unsustainable in the long run. An international emissions-trading program is also unlikely to survive noncompliance by some of its members.

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Inherency
Inherency card. Joshua P. Fershee, Visiting Assistant Professor, Penn State Dickinson School of Law. J.D., Tulane Law School, Wyoming Law Review, 2007 lexis
A carbon tax would place an excise tax on fossil fuel sales, i.e., sales of coal, petroleum products, and natural gas, based on the fuel's carbon content. n124 A federal carbon tax has been promoted by several, and diverse, sources. Duke Energy, one of the largest energy companies in the United States, is an ardent supporter of a carbon tax, arguing that it "is an effective fiscal policy option that would simultaneously support federal tax reform initiatives, reduce carbon dioxide emissions, and promote sound energy policies." n125 On the other end of the spectrum, [*290] former Vice President Al Gore is also a strong proponent of carbon taxes n126 and has even suggested using a carbon tax in place of some payroll taxes. n127 Despite growing appeal at both the federal and global level, n128 increased carbon taxes have, to date, proven politically untenable in the United States. As noted above, the Bush Administration n129 and many members of Congress adamantly oppose carbon taxes, n130 arguing that such a tax would improperly impose economic harm. n131 Although there are some indications that politicians from both sides of the aisle are more open to (at least some) carbon taxes than ever before, n132 no serious proposals are

on the horizon. n133

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Cap and Trade will come this year or next
Deborah Zabarenko, Environment Correspondent Reuters Alert Net Feb. 15, 2007 “Senators tell global forum US Must Lead on Warming” http://www.alertnet.org/thenews/newsdesk/N14126082.htm McCain and Sen. Joe Lieberman, a Connecticut independent, have pushed legislation that would set limits on the emission of greenhouse gases including carbon dioxide, and allow those that exceed them to trade with others that are under the limit, a plan known as cap-and-trade. Lieberman, who also addressed the group in the ornate Senate Caucus Room, noted growing momentum for U.S. action "after many years of denial and inaction" on global warming. "I want to make a prediction, which is that the Congress of the United States will enact a nationwide law mandating substantial reductions in greenhouse gases before the end of this Congress or early in the next," Lieberman said. This session of Congress ends in late 2008.

Democrats to enact Cap-and-Trade
The Associated Press October 13, 2007 “Democrat presidential hopeful Barack Obama says religion affects his views on the environment” http://www.iht.com/articles/ap/2007/10/14/america/NA-POL-USObama.php acc: 6/26/08 Obama said he would force industries and power companies to clean up their operations. He would institute a "cap and trade" approach that would require polluters to buy allowances, essentially putting a price on pollution and creating an incentive to cut emissions.

Cap-and-Trade to pass under Obama
William L. Watts (Market Watch) October 8, 2007 “Democratic presidential contender Barack Obama on Monday said that if elected he would establish an economy-wide cap-and-trade program that would sharply cut greenhouse-gas emissions by 2050.”http://www.marketwatch.com/news/story/story.aspx?guid=%7BE704950B-F8D6-49EB9C20BCCECEB72374%7D&siteid=rss acc: 6/26/008 In a speech prepared for delivery in Portsmouth, N.H., the Illinois senator said the cap-and-trade plan would be the centerpiece of a wide-ranging set of measures designed to cut emissions of gases tied to global warming and weaning the United States off of dependence on oil. Under a cap-and-trade plan, companies that produce carbon dioxide and other greenhouse gases receive or buy credits that give them the right to emit a certain amount. Companies that emit less carbon than their credits allow can profit by selling any excess credits on the open market, while those that exceed their emission allowance have to make up the difference or face heavy fines. Obama's plan would require all credits to be purchased at auction, rather than allocated by industry -- a move his campaign said would ensure that all polluters pay for every ton of emissions released.

GOP to enact Cap-and-Trade
Katherine Q. Seelye “New York Times” Jan. 9, 2003 “Politics and the Economy: The Environment; McCain and Leiberman Offer Bill to Require Cuts in Gases” http://query.nytimes.com/gst/fullpage.html?res=9C00E7D8103EF93AA35752C0A9659C8B63 acc: 6/26/08 The two former -- and possibly future -- political rivals to President Bush and each other offered their bill to reduce the emissions of heat-trapping gases, saying the administration was stuck in neutral on that crucial environmental matter. The bill, forged with advice from industry and environmental groups, would require that by 2010 industries cut emissions of carbon dioxide to 2000 levels and by 2016 to 1990 levels. It would create a ''cap and trade'' system under which companies that failed to meet the goals could buy ''credits'' from companies that exceeded them, an approach used to reduce acid rain. The program would apply to electric utilities, industrial plants, transportation and large commercial enterprises, which were responsible for 85 percent of emissions in 2000 in the United States.

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Politicians are hold companies back from solving the carbon emissions crisis by themselves. April Streeter, Jan./Feb. 2000; http://sks.sirs.com/cgi-bin/hst-article-display?id=SMO1965-03754&artno=0000112379&type=ART&shfilter=U&key=&title=Carbon%20Crunch&res=Y&ren=N&gov= N&lnk=N&ic=N 6/26/08 Political Wrangling Is Overshadowing Talks on Global Carbon Emissions Trading Standards. But Some Companies Are Ready to Forge Ahead by Themselves--with or Without the Politicians. It's been hailed as the world's next trillion-dollar market. Yet some observers question whether it may even get off the ground, such is the extent of international bickering over its future structure. And while some see it as a 21st century environmental savior, others claim it could do more harm than good. Carbon trading arouses strong emotions. Proponents argue that a global trading system allowing companies to buy and sell the right to produce carbon dioxide emissions would promote energy efficiency and help cut global greenhouse gas emissions. Selling carbon credits, they say, would give sellers an income from reducing emissions. Equally, buyers would have a financial incentive to cut their emissions. Skeptics counter that trading merely allows Western corporations to increase their emissions by buying themselves out of their environmental responsibilities. Trading, they say, impedes rather than promotes progress on emissions. This conflict is one reason why no rules on international emissions trading have yet been formulated, despite the signing of the Kyoto Protocol on global warming in 1997. The protocol laid a foundation for the start of emissions trading but little has happened since because countries cannot agree on implementation. As governments haggle, countries and companies are pursuing a host of individual schemes. The result predictably, is confusion. Frank Joshua, head of the emissions trading program at the UN Conference on Trade and Development (UNCTAD), admits this but reckons the uncertainty is beneficial. "Really, trading is simmering along as it should. Chaos is necessary to drive the process forward and figure out what will really work." To be sure, momentum is increasing, This is clear from last November's Conference of Parties (COP V) Kyoto follow-up meeting in Bonn. The event was criticized for ducking tough decisions, like whether to impose any limits on trading. But the buzz about trading definitely intensified. "There was a lot of energy and enthusiasm about trading, outside the talks themselves and in the corridors," says Robert Kleiburg, climate change analyst at oil group Royal Dutch/Shell. "What I found most interesting is that while people used to think of emissions trading as some kind of dirty trick, it is now being characterized as real and positive. Nevertheless, thorny questions will have to be solved by the time the COP reconvenes in The Hague this November for a decisive meeting. The tradability of spare credits (or 'hot air') arising in countries like Russia and Ukraine due to weakening industrial conditions is perhaps the key sticking point. But Frank Joshua dismisses this as unimportant to the long-term success of trading. "Yes, Russia will have some hot air, but if Kyoto is ratified as is, so will the European Union," he says, referring to the EU's initial proposal to cut more emissions than ending agreements specified. Joshua stresses that 'hot air' will disappear after the first sets of trades. It's more important to stop arguing, get the politics moving, and put good systems in place." Not withstanding the disagreements over carbon trading, a number of countries are readying themselves by developing domestic trading programs.

US warming policy is focusing on cap and trade
Brian Hansen February 19, 2007 "Carbon tax called more effective option than cap-trade for addressing warming" Inside Energy with Federal Lands, Pg. 12 All of the major global-warming bills that have been introduced on Capitol Hill in recent years use the cap-and-trade approach. These measures, in general, allow power plants and other sources to buy and sell emissions "allowances" as long as total industrial emissions are kept under a certain level. These caps are generally made more stringent over time, which theoretically increases the price of emissions allowances. A carbon tax, by contrast, simply charges industries a set price for each ton of greenhouse gas they pump into the air.

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Legislation is inevitable - it will be cap and trade instead of carbon tax. Business Week, “Climate Wars: Episode Two” April 23, 2007
http://www.businessweek.com/magazine/content/07_17/b4031094.htm Forget all that. For most companies, the science debate is ancient history. The current argument, which could turn ugly, is about how the government should act to curb carbon emissions. "We've reached a tipping point on this issue," says Jeff Sterba, CEO of Southwestern utility PNM Resources (PNM ). Where automakers once fought the Kyoto Protocol, they're now backing mandatory greenhouse gas limits that could go beyond Kyoto. The Edison Electric Institute, a utility industry group, has come around despite its members' coal-fired plants. "Looking back, I wouldn't have believed it was possible EEI would evolve to where we are today on this issue," says James E. Rogers, CEO of Duke Energy Corp. (DUK ) On Apr. 11, ConocoPhillips (COP ) became the first major U.S. oil company to call for carbon caps. Even Exxon Mobil Corp. (XOM ), which has spent millions to raise doubts about climate change, now claims to have been misunderstood. "Our approach to this has evolved," says Kenneth P. Cohen, vice-president for public affairs. There are still holdouts, not the least George W. Bush. His mantra is that China and India must sign on if the U.S. is to impose curbs. Peabody Energy (BTU ) has hired ex-House Majority Leader Richard A. Gephardt to lobby against carbon curbs. And while many companies are waving green flags, environmentalists worry that some are more interested in protecting themselves than in saving the planet, since those not willing to negotiate could face higher costs. As Charles Territo of the Alliance of Automobile Manufacturers says: "If you're not at the table, you're on the menu." Whatever the motivations, a profound shift has occurred on global warming. With Congress beginning work on a slew of bills, "the entire discussion has progressed from 'nothing is going to happen' to wrestling over the details," says Philip E. Clapp, president of the National Environmental Trust. "The jockeying has begun." ExxonMobil's Cohen, for instance, is talking up large reductions in carbon dioxide that could come from better auto-fuel economy. Wait a minute, the Big Three carmakers retort: Since cars generate just 20% of the nation's emissions, it's not fair for us to bear the brunt. Meanwhile, utilities are wrangling over how to dole out the rights to emit under a national cap on emissions. "All the groups are trying to get the best deal possible," says Brent W. Dorsey, director of corporate environmental programs at New Orleans utility Entergy Corp. (ETR ) The leading approach, found in most of the bills in Congress, is a system called cap and trade. The idea is that individual industries and companies must reduce emissions to a certain level. If they are unable to do so, they can buy rights or allowances from others who emit less than their set limit. The market then finds the least costly ways to cut emissions most quickly. There are a host of thorny issues. If a power plant already produces a million tons of CO2 a year, does the utility have to buy allowances, or is it initially granted free credits for most of those million tons? Or if a utility has already cut emissions in anticipation of regulations, does it get credit for those reductions? Utilities such as Entergy, which have nukes and renewable energy sources, are complaining that their coal-heavy counterparts are angling for additional allowances and so will gain a competitive advantage. Heavier coal burners, such as Duke and American Electric Power Corp. (AEP ), in turn say treating utilities equally would give the lower emitters a windfall. And the timing of mandatory reductions is crucial. "If we have to reduce carbon before we have the new technology to do it, we will put ourselves in a world of hurt," says Sterba. Even as this fight over allocations heats up, many groups that once challenged the science are taking aim at the whole idea of cap and trade. Better to pass a tax on carbon, they say, which would be a more efficient way of encouraging business and consumers to make less carbon-intensive energy choices. That's a favorite idea of Exxon, too. But cynics note that taxes have always been political suicide and therefore are unlikely to be enacted. It would also take a lot of trial and error to come up with a tax that limits emissions to a desired target.

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Cap-and-trade inevitable. Jim DiPeso, REP Policy Director, GreenBiz.com, "States, Business Fill D.C.'s Vacuum" March 26, 2007
Until very recently, the federal government has been remarkably unresponsive to pleas for a national policy to reduce greenhouse gas emissions. Slowly, however, the inertia in Washington is yielding to heavy pressure from the states and business. State policies to cut emissions, combined with business calls for stronger federal leadership, may yet prod Washington into acting in the next two years. Nine Northeastern states are moving ahead with a cap-and-trade system designed to reduce greenhouse gas emissions from power plants 10 percent by 2019. A 10th state, Maryland, will join the four-year-old group on June 30. California pushed the envelope further last year, by enacting legislation to establish an economy-wide cap-and-trade system designed to cut the state's greenhouse gas emissions to 1990 levels by 2020 and 80 percent by 2050. Governor Arnold Schwarzenegger (R) followed up with a proposed standard to reduce the carbon intensity of California transportation fuels 10 percent by 2020. More states, led by both Republican and Democratic governors, have joined the parade. Since last December, six governors have announced policies to push greenhouse gas emissions down significantly. In New Mexico, Governor Bill Richardson (D) signed an executive order accepting the recommendations of a state advisory commission to cut the Land of Enchantment's emissions 10 percent below 2000 levels by 2020 and 75 percent by 2050. Governors Deval Patrick (D) of Massachusetts and Donald Carcieri of Rhode Island (R) announced that their states will join the Northeastern power plant cap-and-trade system. In Washington State, Governor Christine Gregoire (D) signed an executive order establishing greenhouse gas emissions reduction targets, culminating in a 50 percent cut below 1990 levels by 2050. Illinois Governor Rod Blagojevich (D) announced a target of cutting his state's emissions 60 percent by 2050. The same day, New Jersey Governor Jon Corzine (D) signed an executive order calling for an 80 percent reduction in the Garden State by 2050. South Carolina Governor Mark Sanford (R) established a climate change advisory committee to come up with recommendations for state action. For good measure, Sanford placed an op-ed in the Washington Post saying that it was OK for conservatives to embrace conservation. Canada is getting into the act too. In British Columbia, Premier Gordon Campbell announced an aggressive climate plan that would require new coal-fired power plants to sequester all carbon emissions. No other jurisdiction, U.S. or Canadian, has gone that far. Only time will tell whether this flurry of target setting will lead to the actions necessary to achieve the targets. Still, setting goals and announcing them publicly are necessary prerequisites to marshaling a commitment to act. Which is what the federal government should be doing so that the plethora of state policies doesn't create a patchwork morass for Corporate America, according to a growing number of national business leaders. Ten leading companies, including Alcoa, DuPont and General Electric, joined with four national environmental organizations to form the U.S. Climate Action Partnership, which is calling for mandatory carbon caps, coupled with market-oriented provisions that would enable businesses to profit from innovations that drive down emissions. The usual bluster heard from climate skeptics is that emissions limits will cripple the U.S. economy. Essentially, that's the deer-in-the-headlights approach to policymaking. The 10 CEOs will have none of that nonsense. Instead, they point out that carbon caps will create a market driver forcing companies to innovate more, compete harder, and push the technological envelope further. Few politicians, even those encased in the dense amber around Pennsylvania Avenue, can afford to ignore high-powered business executives demanding action from Washington. In reaction to the business leaders' statement, Senator John Warner, a Virginia Republican and a key swing vote in the Senate's Environment and Public Works Committee, said: "A group like this, you've got my attention." Warner's statement is a sign that odds are improving for a national policy putting a price on greenhouse gas emissions.

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Cap-and-trade coming now and will fail - carbon tax key. Progressive Nation, "Curb Your Enthusiasm for Curbing Carbon with Cap-and-Trade" April 23, 2007
Since the Democrats have taken over Congress, utilities have dramatically changed course and begun advocating for a national, mandatory plan to reduce greenhouse gas emissions. They want uniformity instead of facing a patchwork of state legislation. Some others in the business community are also reversing course and beginning to recognize that some form of regulation on the emissions of carbon is inevitable. The day before President Bush gave his State of the Union Address this January, the CEOs of ten major businesses including industrial giants GE, DuPont, and British Petroleum joined four environmental groups in a coalition called the United States Climate Action Partnership (USCAP) to encourage Congress to introduce a program to reduce carbon emission by ten percent within ten years. Both USCAP and the utilities advocate a method to reduce emissions called cap-and-trade. This program first "caps" national carbon dioxide equivalent emissions at a certain level. Emitters that produce less emissions than their allotment can sell credits, and those that produce more can buy them, hence the "trade" half of the name. Those in Congress who want to reduce greenhouse emissions also generally support this method, and it was the central feature of the most prominent piece of legislation to reach the floor of either chamber of Congress, the McCain-Lieberman Climate Stewardship Act. The willingness for the business community and government to approach global warming seriously should be applauded, but their preferred cap-and-trade solution is very problematic and complex. Its main drawback is a fluctuating price that fails to provide a clear price signal to investors in renewable energy technology and more importantly power plant owners, who must choose whether to modernize their facilities. And even if a plan is implemented, political fights to set future emission targets will likely be intense. In contrast, the other primary option to reduce emissions, a carbon tax, sets a clear price that allows businesses to make reasonable decisions concerning emission cuts. It should be relatively easy to implement, and there should be less political controversy surrounding it once it becomes law. If it is argued for correctly, it also offers Democrats excellent rhetorical opportunity to appear friendly to business and against extensive bureaucracy or complicated rules. (Calling it a carbon price is the first step toward making this argument, and the option will be referred to in this manner for the remainder of the article. The word "tax" has many negative connotations that detract from the excellent features of a stable carbon price.)

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Carbon Tax is better than other alternative– getting it started is the key. Komanoff 9/26/2007 “Dingell Opens the Door … with a Hybrid Carbon Tax”
http://www.carbontax.org/blogarchives/2007/09/26/dingell-opens-the-door-with-a-hybrid-carbon-tax/ Date Accessed:6/23/2008
With a mighty creak of long-rusted hinges, a door is finally opening in Washington. The present Congress will apparently be asked to consider a carbon tax. The measure — actually, a hybrid carbon and petroleum tax — will be introduced by the powerful chairman of the House Committee on Energy and Commerce, Rep. John Dingell (D-Michigan).Today Dingell posted on his

Web site a summary of the bill, which he began drafting in June. The current version would phase in, each year for five years, a charge of $10 per ton of carbon content of coal, oil and natural gas; plus an additional 10 cents/gallon for gasoline and jet fuel (kerosene). By the end of the five-year period the charges would reach $50/ton of carbon plus 50 cents/gallon of gasoline and jet fuel. These equate to 63 cents a gallon of gas and 90 cents for one hundred kilowatt-hours assuming the nationwide average fuel mix.Dingell is asking the public for comments. Here's ours: we think the bill is terrific. In line with what we said when we founded the Carbon Tax Center, and as Dingell himself wrote last month in the Washington Post, "[S]ome form of carbon emissions fee or tax … would be the most effective way to curb carbon emissions and make alternatives economically viable." Moreover, as we elaborate below, his supplemental tax on gasoline and jet fuel has the look of genius.How much carbon and petroleum would Dingell's hybrid carbon tax eliminate? A lot, if you change one key parameter; instead of halting the tax after year 5, continue ramping it up. If the tax works and the impacts on families and businesses can be offset through tax-shifting and rebates, why stop?We examined a 20-year ramp-up — starting Dingell's "10/10" tax in
2008 and continuing through 2027 to a level of $200 per ton of carbon plus $2/gallon on gasoline and jet fuel. Here's where the U.S. would be in the representative year 2025: Carbon dioxide emissions would be down by 1.55 billion metric tons from projected levels, a 20% drop — a decrease equivalent to current emissions from England, France and Italy combined. Petroleum

consumption would be 4.5 million barrels a day less than otherwise, an 18% decrease from projected usage, and more than 10% greater than Iran's current production. Moreover, these reductions could be supplemented by savings from other targeted policies and programs to reduce use of petroleum, natural gas and coal-fired electricity. (Indeed, a companion section of Dingell's bill will call for phasing out the federal tax deduction on mortgage interest on very large homes, thus ending a subsidy through which middle and working class families subsidize gargantuan sprawl homes for the wealthy.) No other single policy measure — not broader CAFÉ standards, not a national Renewable Energy Standard, not a massive biofuels push, and certainly not a new generation of subsidized nuclear power plants — can produce nearly the carbon and petroleum savings promised by the Dingell hybrid carbon tax, provided it extends beyond the initial five-year period.The brilliant touch in the Dingell bill is the supplemental tax on gasoline and aviation fuel. Dingell obviously grasps that a carbon tax alone can't end America's dangerous oil dependence. A straight carbon tax falls most heavily on coal, both because coal's carbon content is so high and because electricity, the form in which coal's energy is delivered, is more priceelastic than gasoline.Using CTC's four-sector spreadsheet model, which looks individually at electricity (40% pf U.S. CO2 emissions), gasoline (21%), jet fuel
(4%) and "other" (35%), we estimate that without the annual 10¢/gallon levy on gasoline and jet fuel, the oil savings in 2025 would be nearly 40% smaller — 2.8 million barrels

The hybrid tax thus saves 60% more petroleum, and 20% more CO2, than a straight $10/tona-year carbon tax.Is the Dingell tax set at the best level? We would like to see it higher — considerably higher. The U.S. economy and America's millions of vulnerable households could almost certainly handle a steeper ramp-up, provided the tax was made revenue-neutral. The climate crisis demands more than just the provisional $10 rate; CTC has been urging a $37/ton-a-year tax. But getting started at all is a tremendous step, and Dingell's clear-sightedness and courage, in a Congress little characterized by either, deserve our admiration. What should be done with the revenue from the hybrid carbon tax? Needless to say, the quantities are enormous — $180 billion annually after Dingell's initial five years, and much more if the ramp-up is extended. While CTC strongly favors the revenue-neutral route, Rep. Dingell has his own ideas for using the revenues — as will just about everyone else.For now, we urge you to read Dingell's Web statement and post a comment on his site and at other sites that cover climate, energy, oil, national security, and politics. Having a legislator of Dingell's stature even float a carbon-tax trial balloon is a very important and positive development — possibly a breakthrough. There's a lot riding on it. Be heard.
a day vs. 4.5 mbd.

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Carbon taxes would provide incentives for efficiency, conservation, and renewables. Kenneth P. Green, resident scholar, Steven F. Hayward, F. K. Weyerhaeuser Fellow, and Kevin A. Hassett,
senior fellow and director of economic policy studies at AEI, American Enterprise Institute, "Climate Change: Caps vs. Taxes" June 2007 Incentive Creation. Putting a price on the carbon emissions attendant on fuel use would create numerous incentives to reduce the use of carbon-intensive energy. The increased costs of energy would flow through the economy, ultimately giving consumers incentives to reduce their use of electricity, transportation fuels, home heating oil, and so forth. Consumers, motivated by the tax, would have incentives to buy more efficient appliances, to buy and drive more efficient cars, and to better insulate their homes or construct them with more attention to energy conservation. A carbon tax would also create incentives for consumers to demand lower-carbon power sources from their local utilities. A carbon tax, as its cost flowed down the chains of production into consumer products, would lead manufacturers to become more efficient and consumers to economize in consumption. At all levels in the economy, a carbon tax would create a profit niche for environmental entrepreneurs to find ways to deliver lowercarbon energy at competitive prices. Finally, a carbon tax would also serve to level (somewhat) the playing field among solar power, wind power, nuclear power, and carbon-based fuels by internalizing the cost of carbon emission into the price of the various forms of energy.

Carbon taxes would transperntly, quickly, and effectively influence industry and indivual behavior away from CO2 consumption. Michael J. Zimmer, attorney at Thompson Hine LLP in the energy practice and also serves this academic
year with the Ohio University Consortium of Energy, Economics and the Environment, Sustainable Development Law & Policy, Winter 2008 lexis
The international debate over reducing worldwide carbon emissions increasingly focuses on effectively reducing carbon emissions by formulating novel policy tools after the Kyoto Protocol expires in 2012. One recommendation posits that if a tax is

levied on carbon emissions it would promote environmentally-minded business decisions, encourage incremental investment in new clean technology, attract the necessary level of capital formation in impacted sectors, and achieve national and global environmental goals. Yet, to effectively reduce carbon emissions, businesses and individuals will have to adopt significant lifestyle and behavioral changes and endorse choices with dramatic economic consequences. Rather than dwelling on the immediate impacts on business and household budgets, all users of energy must eventually confront and assume responsibility for reducing the economic and environmental consequences of carbon emissions. Once governed under the law of "commons," carbon will now become governed by the laws of science, physics, and economics in global markets. To this end, the most effective plan will ensure that all sources of carbon are meaningfully addressed. If economic markets were forced to integrate the cost of environmental externalities caused by carbon emissions into the costs of doing business, the ensuing price signals and economic incentives would force a dramatic shift toward developing cleaner energy sources and more sustainable energy habits. Economic consequences will likely be imposed on the industries that created carbon emissions if there is any hope of effectively reversing the legacy of environmental damage. This Article argues that implementing a tax on carbon dioxide ("CO[2]") imposes economic accountability and would impact the use of precious resources in a more direct, transparent, and sustainable manner than any proposed cap-and-trade program. The critical issue is managing the perceived political consequences of exercising such policy choices. A carbon tax would directly influence both industry and individual behavior with transparency, fairness, speed, and balance. Industry would have an economic incentive to reduce their carbon emissions to avoid the tax, which would likely be a cost passed on to consumers, and thus, the price signals created would modify consumer behavior. Accurate price signals for carbon (with diminished volatility) will also direct the marketplace so that clean renewable sources of power, energy efficiency, demand-side management, and combined heat and power technologies enjoy a level playing field with the CO[2]-producing conventional fossil fuel generation resources. A cap-and-trade system will reward traders, commodities merchants, and financial institutions. An astute use of the federal tax system can build companies, development of equipment and technology, and ensure that physical investments are made in sustainable business models.

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A carbon tax would be the appropriate incentive to modify behavior away from traditional energy toward alternate energy. Michael J. Zimmer, attorney at Thompson Hine LLP in the energy practice and also serves this academic
year with the Ohio University Consortium of Energy, Economics and the Environment, Sustainable Development Law & Policy, Winter 2008 lexis A "carbon tax" is a tax on the carbon content of fuels; effectively, it is a tax on the CO[2] emissions produced from burning fossil fuels. n1 The current prices of gasoline, electricity, oil, coal, and other fuels do not include the full economic costs of the health, resource, and environmental externalities associated with the broad usage of these energy sources in the United States and around the world. The failure to force industry and consumers to shoulder these externalities suppresses the economic incentive to develop and implement carbon-reducing measures like energy efficiency, renewable energy, advanced metering, storage, additional transmission, or clean technology. On the other hand, taxing fuels based on their carbon content infuses these incentives at every point in the chain of production and consumption, from an individual's choice of the type and usage of vehicles, appliances, and housing, to business choices of product design, capital investment, facilities location, and government's choices when setting regulatory policy direction. n2

Carbon taxes would be more balanced producing net games five times higher. Kenneth P. Green, resident scholar, Steven F. Hayward, F. K. Weyerhaeuser Fellow, and Kevin A. Hassett, senior fellow and director of economic policy studies at AEI, American Enterprise Institute, "Climate Change: Caps vs. Taxes" June 2007
* Effectiveness and Efficiency. A revenue-neutral carbon tax shift is almost certain to reduce GHG emissions efficiently. As economist William Pizer observes, "Specifically, a carbon tax equal to the damage per ton of CO2 will lead to exactly the right balance between the cost of reducing emissions and the resulting benefits of less global warming."[10] Despite the popular assumption that a cap-and-trade regime is more certain because it is a quantity control rather than a price control, such a scheme only works in very limited circumstances that do not apply to GHG control. The great potential for fraud attendant on such a system creates significant doubt about its effectiveness, as experience has shown in both theory and practice in the gyrations of the European ETS. The likelihood of effectiveness also cannot be said for regulations such as increased vehicle fuel economy standards. In fact, such regulations can have perverse effects that actually lead to increased emissions. By making vehicles more efficient, one reduces the cost of a unit of fuel, which would actually stimulate more driving, and, combined with increasing traffic congestion, could lead to an increase in GHG emissions rather than a decrease. As Harvard researchers Louis Kaplow and Steven Shavell point out, "The traditional view of economists has been that corrective taxes are superior to direct regulation of harmful externalities when the state's information about control costs is incomplete," which, in the case of carbon emissions reductions, it most definitely is.[11] And when it comes to quantity controls (as a cap-and-trade system would impose), Pizer found that My own analysis of the two approaches [carbon taxes vs. emission trading] indicates that price-based greenhouse gas (GHG) controls are much more desirable than quantity targets, taking into account both the

potential long-term damages of climate change, and the costs of GHG control. This can be argued on the basis of both theory and numerical simulations. Pizer found, in fact, that a carbon-pricing mechanism would produce expected net gains five times higher than even the best-designed quantity control (i.e., cap-and-trade) regime.[12]

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Taxes encourage alt energy – it is the maximum incentive Schlesinger (William, writer for Duke University Office of News and Communications, 5/16/05,
“Carbon Tax Provides Fairest Incentive For Curbing Global Warming”, online: http://www.dukenews.duke.edu/2005/05/carbontax.html, acc: 6/23/08) A carbon tax would be paid whenever a molecule of carbon dioxide is emitted to the atmosphere by burning fossil fuels. Utilities would pay it based on their smokestack emissions and pass the cost to consumers in their monthly electric bill. Each of us would pay it when we fill up with gasoline, based on the content of fossil carbon in the fuel. A carbon tax would provide the maximum incentive for bright engineers to improve the efficiency of fossil fuel use in all sectors of society. It also would maximize the potential for important "cross-sector" transfers of efficiency. For instance, if engineers find efficient ways to reduce CO2 emissions from the power plants that provide our electricity, the utilities’ carbon tax savings could be passed along to consumers. The same principle might make it cheaper to operate an electric car than a gas-powered one. More of us would be motivated to buy electric cars, especially given the price of gasoline these days. A carbon tax does not necessarily mean a net increase in our cost of living. Carbon tax revenues could be directed to general government expenditures, so that income tax rates could be reduced for all Americans -- or perhaps those at the lower income levels. Importantly, our current income tax structure provides no personal choice to reduce our tax; indeed, the more we earn, the more we pay on April 15. A tax on carbon, which would show up in higher costs for electricity or gasoline, would provide an incentive for each of us to use energy more efficiently if we wanted to pay lower taxes. Still want an SUV? Buy it, but each year you’ll pay more for gasoline than your neighbor who has a Toyota Prius. Want to live in the country? Fine, but remember it will cost you to drive the extra miles to work each day. Want to save some money at home and send less to the taxman? Put on a warm sweater and lower your thermostat. Conservation and efficiency must both play a role in our attempt to reduce dependence on dwindling production of foreign oil. A carbon tax provides an equal incentive for both pathways to be part of the solution.

Taxes promote efficient energy Kelley (Katie, columnist for the New York Times, 11/18/06, “City Approves ‘Carbon Tax’ in Effort to
Reduce Gas Emissions”, online: http://www.nytimes.com/2006/11/18/us/18carbon.html, acc: 06/23/08 Voters in this liberal college town have approved what environmentalists say may be the nation’s first “carbon tax,” intended to reduce emissions of heat-trapping gases. The tax, to take effect on April 1, will be based on the number of
kilowatt-hours used. Officials say it will add $16 a year to an average homeowner’s electricity bill and $46 for businesses. City officials said the revenue from the tax — an estimated $6.7 million by 2012, when the goal is to have reduced carbon emissions by 350,000 metric tons — would be collected by the main gas and electric utility, Xcel Energy, and funneled through the city’s Office of Environmental Affairs. The tax is to pay for the “climate action plan,” efforts to “increase energy efficiency in homes and buildings, switch to renewable energy and reduce vehicle miles traveled,” the city’s environmental affairs manager, Jonathan Koehn, said. The goal is to reduce the carbon levels to 7 percent less than

those in 1990, which amounts to a 24 percent reduction from current levels, Mr. Koehn said. “The climate action plan serves as the roadmap to meet our reduction goal,” he said. The tax grew out of efforts by a committee of
residents and members of the City Council and Chamber of Commerce to try to enable Boulder to reach goals set by the United Nations Kyoto Protocol, which seeks to curb global warming.

Taxes key to transfer to alt energy Carbon Tax Center (an organization supporting an American carbon tax, 2/26/08, “Frequently Asked
Questions and Answers about Carbon Taxes”, online: http://www.carbontax.org/faq/, acc: 6/23/08) Charging businesses and individuals a price to emit carbon dioxide (CO2) is essential to reduce U.S. emissions quickly and steeply enough to prevent atmospheric concentrations of CO2 from reaching an irreversible tipping point. The transformation of our fossil fuels-based energy system to reliance on energy efficiency, renewable energy and sustainable fuels won't happen without carbon taxes sending the appropriate price signals into every corner of the economy and every aspect of life.

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Taxes promote energy efficiency Carbon Tax Center (an organization supporting an American carbon tax, 2/26/08, “Carbon Tax
Center- Introduction”, online: http://www.carbontax.org/introduction/#why, acc: 6/23/08) The rationale for a carbon tax is simple: the levels of CO2 already in the Earth’s atmosphere and being added daily are destabilizing established climate patterns and threatening the ecosystems on which we and other living beings depend. Very large and rapid reductions in the United States’ and other nations’ carbon emissions are essential to reverse runaway climate change and avert resulting severe weather events, inundation of coastal areas, spread of diseases, failure of agriculture and water supply, infrastructure destruction, forced migrations, political upheavals and international conflict. A carbon tax must be the central mechanism for reducing carbon emissions. Currently, the prices of gasoline, electricity and fuels in general include none of the costs associated with devastating climate change. This omission suppresses incentives to develop and deploy carbon-reducing measures such as energy efficiency (e.g., high-mileage cars and high-efficiency heaters and air conditioners), renewable energy (e.g., wind turbines, solar panels), low-carbon fuels (e.g., biofuels from high-cellulose plants), and conservation-based behavior such as bicycling, recycling and overall mindfulness toward energy consumption. Conversely, taxing fuels according to their carbon content will infuse these incentives at every chain of decision and action — from individuals’ choices and uses of vehicles, appliances, and housing, to businesses’ choices of new product design, capital investment and facilities location, and governments’ choices in regulatory policy, land use and taxation.

Revenue neutral carbon taxes with 5-year adjustments protects business and ensures completion of reduction goals. Michael J. Zimmer, attorney at Thompson Hine LLP in the energy practice and also serves this academic
year with the Ohio University Consortium of Energy, Economics and the Environment, Sustainable Development Law & Policy, Winter 2008 lexis Setting a clearing price for carbon that can be periodically evaluated for its effectiveness in achieving public policy and market performance objectives is a simpler and more economically efficient approach than a cap-and-trade program. The cost of carbon can be set through a tax mechanism, and its progress in reducing energy intensity can be evaluated every five years. This built-in evaluation process permits adjustments to be made, which will ensure achievement of emission reduction goals. Technical inputs can be provided by DOE, EPA, NOAA, and the National Academy of Science each cycle for review with final economic evaluations of the tax conducted by Treasury and the Federal Reserve. In the United States, potential economic harm could be diminished by offsetting the revenue resulting from a new carbon tax upon its enactment, with mirroring reductions in the payroll tax, the corporate tax rate, and the alternative minimum tax. Additional revenue can be reserved in trust for government funding of clean energy technology and advanced energy R&D. Economic feedback would be provided with balance to benefit the corporate, small business, and individual tax payers to reduce the economic burden of the new carbon tax scheme by starting with a tax that is "revenue neutral." The key effectiveness of a carbon tax program that is currently being overlooked is that such a tax may become revenue neutral. Revenue neutrality shifts the economic burden to industries requiring behavioral and competitive modification consistent with global policy shifts while preserving efficiency, energy intensity, and benefits of stability in the U.S. economy. No cap-and-trade proposal offers similar revenue neutrality and the specter of economic stability. Rather, cap-and-trade arguably creates some market winners, many market or industry sector losers, opportunities for gaming, and makes U.S. consumers the biggest losers of all.

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Carbon taxes can prevent ecocide, but the window is only 1-2 years U.S. scientist urges carbon tax to help climate by Donna Smith, scientist for Reuters, 06/23/08, http://www.guardian.co.uk/business/feedarticle/, 06/23/08
The U.S. scientist who 20 years ago first told Congress that the Earth's climate was warming said on Monday that urgent action is needed to cut greenhouse gases and a tax proposal on carbon emissions. James Hansen, the director of NASA's Goddard Institute for Space Studies, said at a congressional briefing that a carbon tax would be the most efficient way to cut global warming emissions and encourage non-fossil energy sources."We have to level with the public that there has to be a price on carbon emissions," Hansen said. "That this is the only way we are going to begin to move toward a carbon free economy."Hansen said urgent action is needed to cut carbon dioxide emissions that are warming the globe and are already causing arctic ice to melt. He said world leaders had only one or two years to act before the Earth reaches a "tipping point" with major consequences to the global climate and species survival."We have reached an emergency situation," Hansen said. He said the government should not keep the proceeds from any carbon tax, but refund the money to taxpayers to help them pay for more fuel efficient technology. President George W. Bush has opposed any broad program to curb carbon emissions saying it would hurt the economy and has consistently resisted any tax increases. But global warming is an issue in this year's presidential campaign and is expected to be a major topic of discussion at next month's meeting of leaders of the Group of Eight industrial nations in Japan. Twenty years ago today, Hansen testified before a Senate committee and told lawmakers that "the greenhouse effect has been detected, and it is changing our climate now."Hansen's testimony helped spur the first congressional efforts to curb greenhouse gases. The most recent effort, legislation that would have created a cap-andtrade system for carbon emissions died in the Senate earlier this month in face of a veto threat from the White House.

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Carbon Tax best way to help decrease global warming Juliet Eilperin and Steven Mufson(Washington Post staff writers) 4/1/2007 “Tax on Carbon
Emissions Gains Support” http://www.washingtonpost.com/wpdyn/content/article/2007/03/31/AR2007033101040.html Date Accessed: 6/23/2008
As lawmakers on Ca/pitol Hill push for a cap-and-trade system to rein in the nation's greenhouse gas emissions, an unlikely alternative has emerged from an ideologically diverse group of economists and industry leaders: a carbon tax. Most legislators view advocating any tax increase as tantamount to political suicide. But a coalition of academics and polluters now argues that a simple

tax on each ton of emissions would offer a more efficient and less bureaucratic way of curbing carbon dioxide buildup, which scientists have linked to climate change. "We want to do the least damage to the growth of GDP," said Michael Canes, a private consultant and former chief economist for the American Petroleum Institute, who led a Capitol Hill briefing on the subject in late February sponsored by the conservative George C. Marshall Institute. Between a cap system and a carbon tax, "a carbon tax will be the much more cost-effective way to go," he said, though he added that
there are other ways to reduce emissions. Robert J. Shapiro, a private consultant who was a Commerce Department official in the Clinton administration, agrees. A cap-and-trade system -- involving plant-by plant-measurements -- would be difficult to administer, he said, and would provide "incentives for cheating and evasion." And the revenue from a carbon tax could be used to reduce the deficit or finance offsetting cuts in payroll taxes or the alternative minimum tax. A carbon tax offers certainty about the price of polluting, which appeals to many economists and businesses. William A. Pizer, a senior fellow at the centrist think tank Resources for the Future and a former senior economist for President Bush's Council of Economic Advisers, estimates that the benefit-to-cost ratio of a tax-based system would be five times that of a cap-and-trade system. "You're going to pay one way or another, whether it's a tax or a permit program," Pizer said, adding that while a cap would provide more certainty on how much emissions would be cut, "the consequences of being uncertain about emissions over any short period of time just aren't that serious." Under a cap-and-trade system, the government would set an overall limit on emissions and allocate permits to emitters. If one plant reduces its emissions more quickly than another, it can sell its credits to the other emitter. A carbon tax would simply increase the cost of emitting each ton of carbon, which could then be passed on to consumers. While Democrats have vowed to push through some sort of carbon dioxide control in this Congress, Bush has consistently opposed mandatory limits, so it remains unclear whether the United States will adopt any system before the next election. Moreover, the fact that many economists back the tax approach is no guarantee that it will prevail over the five cap-andtrade plans already proposed in the Senate. The complexity of the cap-and-trade system is part of its virtue for some politicians, since it may mask the system's impact on prices. Such a system also appeals to conservative lawmakers who like the idea of letting the market determine the price of carbon, while keeping revenue out of the hands of government. Some economists say it would channel capital to the most economically worthwhile projects first. Environmentalists are split on a carbon tax. Fred Krupp, president of Environmental Defense, which is handing out baseball caps emblazoned with the slogan "Just Cap It" on Capitol Hill, called such a tax "an interesting distraction." "It doesn't give us the guarantee the emissions will go down," he said. But Carl Pope, executive director of the Sierra Club, said: "It will be more effective if people know that in year 'X' they will pay this much. Companies are highly motivated by costs." Moreover, he worries that rationing carbon allowances based on historical emissions would reward companies that spew out the most greenhouse gases now and did the least to limit them in the past. Dan Becker, director of the Sierra Club's program on global warming, said the nation may need to adopt a carbon tax in several years but "we're not there yet.” Some industries that have historically opposed carbon limits embrace the idea of a tax because their sectors would not be singled out for regulation. "A poorly constructed cap-and-trade system can be as punitive as a regressive tax," said Scott Segal, an electric utilities lobbyist. Red Cavaney, president of the American Petroleum Institute, told a National Press Club audience in February that his industry prefers that lawmakers explore a range of policy options before imposing a cap. "A cap-and-trade system isn't necessarily the be-all and end-all," he said. "A carbon tax, everything, should be on the table from the beginning."

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A carbon tax would decrease the amount of carbon emissions in the atmosphereThis solves for global warming GREGORY MANKIW, September 16, 2007.( Harvard professor of economics, former governor of
Massachusetts, adviser to President Bush, One Answer to Global Warming: A New Tax (6/23/08) http://www.lexisnexis.com/us/lnacademic/results/docview/docview.do?docLinkInd=true&risb=21_T40202 34282&format=GNBFI&sort=RELEVANCE&startDocNo=1&resultsUrlKey=29_T4020234285&cisb=22_ T4020234284&treeMax=true&treeWidth=0&csi=6742&docNo=17 In the debate over global climate change, there is a yawning gap that needs to be bridged. The gap is not between environmentalists and industrialists, or between Democrats and Republicans. It is between policy wonks and political consultants. Among policy wonks like me, there is a broad consensus. The scientists tell us that world temperatures are rising because humans are emitting carbon into the atmosphere. Basic economics tells us that when you tax something, you normally get less of it. So if we want to reduce global emissions of carbon, we need a global carbon tax. Q.E.D. The idea of using taxes to fix problems, rather than merely raise government revenue, has a long history. The British economist Arthur Pigou advocated such corrective taxes to deal with pollution in the early 20th century. In his honor, economics textbooks now call them ''Pigovian taxes.'' Using a Pigovian tax to address global warming is also an old idea. It was proposed as far back as 1992 by Martin S. Feldstein on the editorial page of The Wall Street Journal. Once chief economist to Ronald Reagan, Mr. Feldstein has devoted much of his career to studying how high tax rates distort incentives and impede economic growth. But like most other policy wonks, he appreciates that some taxes align private incentives with social costs and move us toward better outcomes. Those vying for elected office, however, are reluctant to sign on to this agenda. Their political consultants are no fans of taxes, Pigovian or otherwise. Republican consultants advise using the word ''tax'' only if followed immediately by the word ''cut.'' Democratic consultants recommend the word ''tax'' be followed by ''on the rich.'' Yet this natural aversion to carbon taxes can be overcome if the revenue from the tax is used to reduce other taxes. By itself, a carbon tax would raise the tax burden on anyone who drives a car or uses electricity produced with fossil fuels, which means just about everybody. Some might fear this would be particularly hard on the poor and middle class. But Gilbert Metcalf, a professor of economics at Tufts, has shown how revenue from a carbon tax could be used to reduce payroll taxes in a way that would leave the distribution of total tax burden approximately unchanged. He proposes a tax of $15 per metric ton of carbon dioxide, together with a rebate of the federal payroll tax on the first $3,660 of earnings for each worker. The case for a carbon tax looks even stronger after an examination of the other options on the table. Lawmakers in both political parties want to require carmakers to increase the fuel efficiency of the cars they sell. Passing the buck to auto companies has a lot of popular appeal. Increased fuel efficiency, however, is not free. Like a tax, the cost of complying with more stringent regulation will be passed on to consumers in the form of higher car prices. But the government will not raise any revenue that it can use to cut other taxes to compensate for these higher prices. (And don't expect savings on gas to compensate consumers in a meaningful way: Any truly cost-effective increase in fuel efficiency would already have been made.) More important, enhancing fuel efficiency by itself is not the best way to reduce energy consumption. Fuel use depends not only on the efficiency of the car fleet but also on the daily decisions that people make -- how far from work they choose to live and how often they carpool or use public transportation. A carbon tax would provide incentives for people to use less fuel in a multitude of ways. By contrast, merely having more efficient cars encourages more driving. Increased driving not only produces more carbon, but also exacerbates other problems, like accidents and road congestion.

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Carbon tax would reduce the amount of carbon in the atmosphere and to fight global warming - A carbon tax would decrease the amount of co2 in the atmosphere better than a cap and trade program Todd Woody, journalist, Report: Carbon Tax a Better Way to Fight Global Warming 02/14/07,
(http://blogs.business2.com/greenwombat/2007/02/report_carbon_t.html, date acc: 06/23/08 A former Clinton administration commerce department official today released a report arguing that a global tax on companies' greenhouse house gas emissions is a more efficient way to combat global warming than the carbon trading markets endorsed by a host of government officials and corporations like Alcoa (AA), BP, (BP), DuPont (DD), Duke Energy (DUK) and General Electric (GE). "A carbon tax would both directly reduce greenhouse gas emissions and provide powerful incentives for technological progress," wrote Robert J. Shapiro, a Washington D.C. consultant, veteran think tanker and former under secretary of commerce for economic affairs. "Carbon taxes also should provide greater incentives for companies to develop new, environmentally-friendly, technologies or abatement strategies than a capand-trade program." Shapiro's study was released by the American Consumer Institute, a free-market oriented Washington group. Corporations currently are not charged for the economic and environmental impacts of their greenhouse gas emissions, though those "externalities" affect everyone. Under a carbon tax, those consequences would be calculated and a tax imposed accordingly. "Since every government needs revenues, the challenge is to design taxes so they distort those relative prices as little as possible. One possibility is to make the base of the tax as broad as possible, so its rate can be low and most people and activities are affected equally," Shapiro wrote. "Carbon taxes generally meet this criterion, although not as well as broad income or consumption taxes. However, their economic drawback of raising the price of carbon-intensive products and operations, relative to those which are not carbon-intensive, is also their environmental purpose." Companies that do not emit greenhouse gases - such as solar and wind producers - or sell greener goods and services - would benefit. The government could use carbon tax revenue to support renewable energy technologies, cut corporate taxes or increase health spending, according to Shapiro. In contrast, cap-and-trade programs impose a ceiling on greenhouse gas emissions and then allow companies that lower their emissions to sell carbon allowances to those that do not. Europe created a carbon trading market to implement the Kyoto Accord and legislation before the U.S. Congress calls for a similar market in the U.S. Shapiro contends that global carbon trading is too complex and susceptible to market manipulation by shady companies and corrupt governments. While Shapiro says a carbon tax would be cheaper and easier to implement, he acknowledged the challenges in getting governments and corporations to agree on what specifically will be taxed and the tax rate.

Carbon taxes key to checking warming. Reuters, "U.S. scientist urges carbon tax to help climate" June 23, 2008
The U.S. scientist who 20 years ago first told Congress that the Earth's climate was warming said on Monday that urgent action was needed to cut greenhouse gases and proposed a tax on carbon emissions. James Hansen, the director of NASA's Goddard Institute for Space Studies, said at a congressional briefing that a carbon tax would be the most efficient way to cut global warming emissions and encourage non-fossil energy sources. "We have to level with the public that there has to be a price on carbon emissions," Hansen said. "That is the only way we are going to begin to move toward a carbon free economy." Hansen said urgent action was needed to cut carbon dioxide emissions that are warming the globe and are already causing arctic ice to melt. He said world leaders had only one or two years to act before the Earth reaches a "tipping point" with major consequences to the global climate and species survival. "We have reached an emergency situation," Hansen said. He said the government should not keep the proceeds from any carbon tax, but refund the money to taxpayers to help them pay for more fuel efficient technology. President George W. Bush has opposed any broad program to curb carbon emissions saying it would hurt the economy and has consistently resisted any tax increases. But global warming is an issue in this year's presidential campaign and is expected to be a major topic of discussion at next month's meeting of leaders of the Group of Eight industrial nations in Japan. Twenty years ago today, Hansen testified before a Senate committee and told lawmakers that "the greenhouse effect has been detected, and it is changing our climate now."

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Carbon taxes key to checking warming. Reuters, "U.S. scientist urges carbon tax to help climate" June 23, 2008
The U.S. scientist who 20 years ago first told Congress that the Earth's climate was warming said on Monday that urgent action was needed to cut greenhouse gases and proposed a tax on carbon emissions. James Hansen, the director of NASA's Goddard Institute for Space Studies, said at a congressional briefing that a carbon tax would be the most efficient way to cut global warming emissions and encourage non-fossil energy sources. "We have to level with the public that there has to be a price on carbon emissions," Hansen said. "That is the only way we are going to begin to move toward a carbon free economy." Hansen said urgent action was needed to cut carbon dioxide emissions that are warming the globe and are already causing arctic ice to melt. He said world leaders had only one or two years to act before the Earth reaches a "tipping point" with major consequences to the global climate and species survival. "We have reached an emergency situation," Hansen said. He said the government should not keep the proceeds from any carbon tax, but refund the money to taxpayers to help them pay for more fuel efficient technology. President George W. Bush has opposed any broad program to curb carbon emissions saying it would hurt the economy and has consistently resisted any tax increases. But global warming is an issue in this year's presidential campaign and is expected to be a major topic of discussion at next month's meeting of leaders of the Group of Eight industrial nations in Japan. Twenty years ago today, Hansen testified before a Senate committee and told lawmakers that "the greenhouse effect has been detected, and it is changing our climate now."

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Carbon taxes solve warming - they spur innovation and alternative energy. Fareed Zakaria, Newsweek, “The Case for a Global Carbon Tax” April 16, 2007 lexis
There's an obvious problem with this model--where will the money for subsidies come from?--but there's another glitch as well. The technology for clean coal doesn't really exist yet in a form that can be widely used. There are various pilot projects and experiments but nothing that is, as yet, economically viable. Both problems can be solved by the same simple idea--a tax on spewing carbon into the atmosphere. Once you tax carbon, you make it cheaper to produce clean energy. If burning coal and

petrol in current ways becomes more expensive because of the damage they do to the environment, people will find ways to get energy out of alternative fuels or methods. Along the way, industrial societies will
earn tax revenues that they can use, in part, to subsidize clean energy for the developing world. It is the only way to solve the problem at a global level, which is the only level at which the solution is meaningful. Congress is currently considering a variety of proposals that address this issue. Most are a smorgasbord of caps, credits and regulations. Instead of imposing a simple carbon tax that would send a clear signal to the markets, Congress wants to create a set of hidden taxes through a "cap and trade" system. The Europeans have adopted a similar system, which is unwieldy and prone to gaming and cheating. (It is also unsustainable if Brazil, China and India don't come onboard soon.) A carbon tax would also send the market a clear and powerful signal to develop alternative energies. Daniel Esty, a Yale environmental expert whose new book, "Green to Gold," is a blueprint for new thinking about the environment, argues that the only way forward is a "transformational approach that creates incentives for innovation and alternative energy. The way we think about these issues is old-fashioned. We're still trying to limit, regulate, control and inspect. We need to become much more market-friendly. Put in place a few simple rules, and let the market come up with hundreds of solutions. We're not even 10 percent of the way down such a path." In the end, everyone realizes that innovation is the only real solution to the global-warming problem. And that's where Cheney is right. Conservation and energy efficiency are smart policies, but not enough. In America over the last three decades, almost all machines and appliances we use to power our lives have become significantly more efficient (with the exception of cars). And yet we consume three times as much energy as we did 30 years ago. Why? Because rising living standards mean rising energy use. We can slow down the growth, but some increase is inevitable. We have more efficient air conditioners. But now we air-condition our whole houses. Our bed lamps conserve power. But we also plug in two phones, a BlackBerry and three iPods.

Carbon Tax solves quickly enough – trying to further accelerate would hurt the transition Carl S. Milsted January 9, 2008 the future of the carbon tax holistic politics
http://www.holisticpolitics.org/GlobalWarming/Future.php date accessed June 23, 2008 At the beginning of this chapter I said that the U.S. needs to cut its carbon dioxide emissions by 75% just to keep world emissions constant—if we allow the rest of the world to catch up. Yet in my carbon tax calculations I assumed that the reduction in carbon burning would be less. We have a contradiction. This is intentional. I don't want to immediately cut carbon burning by 75%. It would be a huge burden on the economy and likely unnecessary. The world hasn't caught up yet, so we have time. And the world can likely withstand a few years of carbon dioxide emission growth as long as it is followed up by shrinkage. Actually, a near-immediate 25% reduction in carbon burning would be considered ambitious by many environmentalists. It is more than the Kyoto Treaty calls for. The bigger environmental benefit of a carbon tax is not the immediate conservation, but the market created for real long term solutions. At a doubling of retail energy costs, many existing alternative energy technologies become economically viable: passive solar, flat plate collectors, hybrid cars, and maybe even more exotic technologies such as photovoltaics, electric cars and Stirling engine hot water heaters. But such technologies will take time to deploy. In fact, it may be better not to deploy such technologies too fast, as better solutions are still in the laboratories. For example, light emitting diode technology is catching up with fluorescent light technology, and LEDs don't contain mercury. Photovoltaics are also improving rapidly . Rushing can be wasteful. But in a decade or two we will see carbon emissions down by 50% or more if we replace either the income tax or FICA with a carbon tax. And when this happens we may not be able to raise sufficient funds via a carbon tax no matter what the tax rate. At that time another tax will be needed to supplement a carbon tax. For Social Security, a national sales tax would make sense. A sales tax has the same regressivity as FICA, but unlike FICA a sales tax encourages the working class to save. For the income tax, the problem is more challenging. You can find many ideas to help answer this challenge in other chapters on this site. And even should they prove insufficient, and the income tax must be reinstated, the effort would still be worthwhile. The economy could use a vacation.

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Carbon Tax would decrease emissions by 80% and help advert future changes in climate Darren Samuelsohn, E&ENews PM senior reporter 5/16/2007 Rep. Stark tosses carbon tax proposal
into warming debate carbon tax center http://www.carbontax.org/blogarchives/2007/04/26/rep-starkintroduces-carbon-tax-bill/ date accessed June 23, 2008 Rep. Pete Stark (D-Calif.) introduced legislation today that aims to curb global warming by taxing the carbon content of fossil fuels. Stark acknowledged in an interview he faces a tough slog, but he insisted it should be seen as an alternative to the more widely discussed cap-and-trade approach to reducing greenhouse gases. "Its viability depends on industry's concern that cap-and-trade becomes a bureaucratic gaming nightmare," Stark said. "We've had some indication from people who are concerned that the capand-trade is just too complex and subject to some kind of politically staffed bureaucracy getting involved in it." Instead of cap-and-trade, Stark said an energy tax would be easier for government to administer and consumers to understand. It also would not set competition among different sectors of the U.S. economy that is expected if lawmakers move toward a cap-and-trade bill. "It might very well become the lesser of some evils," Stark said. Stark's bill would tax coal, petroleum and natural gas at $10 per ton of carbon content when the fuel is either extracted or imported. The tax would increase $10 every year until the Energy Department and Internal Revenue Service determine U.S. carbon dioxide emissions have dropped 80 percent from 1990 levels -- a threshold many scientists say could help to avert catastrophic changes to the Earth's climate. Endorsements for a carbon tax come from many notables in the energy policy debate, including former Vice President Al Gore, New York Times columnist Thomas Friedman and Democratic presidential candidate Sen. Christopher Dodd (Conn.). To industry groups and several leading energy companies, including Exxon Mobil Corp., a carbon tax also belongs in the debate over solutions to global warming. "If your goal is to put a price on carbon for the goal of changing behavior, it's a lot more transparent," said Lou Hayden, a senior policy analyst at the American Petroleum Institute. In written comments to the House Energy and Commerce Committee, API said taxes should be considered along with voluntary efforts and cap-and-trade.

Carbon Taxes can help reduce global warming N. Gregory Mankiw 9/16/2007 “One Answer to Global Warming: A New Tax”
http://www.nytimes.com/2007/09/16/business/16view.html?_r=1&oref=slogin&adxnnlx=1190034206IfyuBBCsva2ji8jr7yiItg&pagewanted=all Date Accessed: 6/23/2008 IN the debate over global climate change, there is a yawning gap that needs to be bridged. The gap is not between environmentalists and industrialists, or between Democrats and Republicans. It is between policy wonks and political consultants.Among policy wonks like me, there is a broad consensus. The scientists tell us that world temperatures are rising because humans are emitting carbon into the atmosphere. Basic economics tells us that when you tax something, you normally get less of it. So if we want to reduce global emissions of carbon, we need a global carbon tax. Q.E.D. The idea of using taxes to fix problems, rather than merely raise government revenue, has a long history. The British economist Arthur Pigou advocated such corrective taxes to deal with pollution in the early 20th century. In his honor, economics textbooks now call them “Pigovian taxes.” Using a Pigovian tax to address global warming is also an old idea. It was proposed as far back as 1992 by Martin S. Feldstein on the editorial page of The Wall Street Journal. Once chief economist to Ronald Reagan, Mr. Feldstein has devoted much of his career to studying how high tax rates distort incentives and impede economic growth. But like most other policy wonks, he appreciates that some taxes align private incentives with social costs and move us toward better outcomes. Those vying for elected office, however, are reluctant to sign on to this agenda. Their political consultants are no fans of taxes, Pigovian or otherwise. Republican consultants advise using the word “tax” only if followed immediately by the word “cut.” Democratic consultants recommend the word “tax” be followed by “on the rich.” Yet this natural aversion to carbon taxes can be overcome if the revenue from the tax is used to reduce other taxes. By itself, a carbon tax would raise the tax burden on anyone who drives a car or uses electricity produced with fossil fuels, which means just about everybody. Some might fear this would be particularly hard on the poor and middle class. But Gilbert Metcalf, a professor of economics at Tufts, has shown how revenue from a carbon tax could be

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used to reduce payroll taxes in a way that would leave the distribution of total tax burden approximately unchanged. He proposes a tax of $15 per metric ton of carbon dioxide, together with a rebate of the federal payroll tax on the first $3,660 of earnings for each worker.

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Carbon tax would reduce the amount of carbon in the atmosphere and to fight global warming - a carbon tax is the most efficient way to curb the amount of co2, fossil fuels, and other greenhouse gases in the atmosphere Donna Smith, scientist for Reuters, U.S. scientist urges carbon tax to help climate 06/23/08,
http://www.guardian.co.uk/business/feedarticle/, date accessed 06/23/08 The U.S. scientist who 20 years ago first told Congress that the Earth's climate was warming said on Monday that urgent action is needed to cut greenhouse gases and a tax proposal on carbon emissions. James Hansen, the director of NASA's Goddard Institute for Space Studies, said at a congressional briefing that a carbon tax would be the most efficient way to cut global warming emissions and encourage non-fossil energy sources."We have to level with the public that there has to be a price on carbon emissions," Hansen said. "That this is the only way we are going to begin to move toward a carbon free economy."Hansen said urgent action is needed to cut carbon dioxide emissions that are warming the globe and are already causing arctic ice to melt. He said world leaders had only one or two years to act before the Earth reaches a "tipping point" with major consequences to the global climate and species survival."We have reached an emergency situation," Hansen said. He said the government should not keep the proceeds from any carbon tax, but refund the money to taxpayers to help them pay for more fuel efficient technology. President George W. Bush has opposed any broad program to curb carbon emissions saying it would hurt the economy and has consistently resisted any tax increases. But global warming is an issue in this year's presidential campaign and is expected to be a major topic of discussion at next month's meeting of leaders of the Group of Eight industrial nations in Japan. Twenty years ago today, Hansen testified before a Senate committee and told lawmakers that "the greenhouse effect has been detected, and it is changing our climate now."Hansen's testimony helped spur the first congressional efforts to curb greenhouse gases. The most recent effort, legislation that would have created a cap-andtrade system for carbon emissions died in the Senate earlier this month in face of a veto threat from the White House.

Carbon Tax would decrease emissions by 80% and help advert future changes in climate Darren samuelsohn, E&ENews PM senior reporter 5/16/2007 Rep. Stark tosses carbon tax
proposal into warming debate carbon tax center http://www.carbontax.org/blogarchives/2007/04/26/repstark-introduces-carbon-tax-bill/ date accessed June 23, 2008 Rep. Pete Stark (D-Calif.) introduced legislation today that aims to curb global warming by taxing the carbon content of fossil fuels. Stark acknowledged in an interview he faces a tough slog, but he insisted it should be seen as an alternative to the more widely discussed cap-and-trade approach to reducing greenhouse gases. "Its viability depends on industry's concern that cap-and-trade becomes a bureaucratic gaming nightmare," Stark said. "We've had some indication from people who are concerned that the capand-trade is just too complex and subject to some kind of politically staffed bureaucracy getting involved in it." Instead of cap-and-trade, Stark said an energy tax would be easier for government to administer and consumers to understand. It also would not set competition among different sectors of the U.S. economy that is expected if lawmakers move toward a cap-and-trade bill. "It might very well become the lesser of some evils," Stark said. Stark's bill would tax coal, petroleum and natural gas at $10 per ton of carbon content when the fuel is either extracted or imported. The tax would increase $10 every year until the Energy Department and Internal Revenue Service determine U.S. carbon dioxide emissions have dropped 80 percent from 1990 levels -- a threshold many scientists say could help to avert catastrophic changes to the Earth's climate. Endorsements for a carbon tax come from many notables in the energy policy debate, including former Vice President Al Gore, New York Times columnist Thomas Friedman and Democratic presidential candidate Sen. Christopher Dodd (Conn.). To industry groups and several leading energy companies, including Exxon Mobil Corp., a carbon tax also belongs in the debate over solutions to global warming. "If your goal is to put a price on carbon for the goal of changing behavior, it's a lot more transparent," said Lou Hayden, a senior policy analyst at the American Petroleum Institute. In written comments to the House Energy and Commerce Committee, API said taxes should be considered along with voluntary efforts and cap-and-trade.

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Carbon tax would reduce the amount of carbon in the atmosphere and to fight global warming - A Carbon Tax would greatly reduce the amount of carbon emissions within a decade Carl S. Milsted January 9, 2008 the future of the carbon tax holistic politics
http://www.holisticpolitics.org/GlobalWarming/Future.php date accessed June 23, 2008 At the beginning of this chapter I said that the U.S. needs to cut its carbon dioxide emissions by 75% just to keep world emissions constant—if we allow the rest of the world to catch up. Yet in my carbon tax calculations I assumed that the reduction in carbon burning would be less. We have a contradiction. This is intentional. I don't want to immediately cut carbon burning by 75%. It would be a huge burden on the economy and likely unnecessary. The world hasn't caught up yet, so we have time. And the world can likely withstand a few years of carbon dioxide emission growth as long as it is followed up by shrinkage. Actually, a near-immediate 25% reduction in carbon burning would be considered ambitious by many environmentalists. It is more than the Kyoto Treaty calls for. The bigger environmental benefit of a carbon tax is not the immediate conservation, but the market created for real long term solutions. At a doubling of retail energy costs, many existing alternative energy technologies become economically viable: passive solar, flat plate collectors, hybrid cars, and maybe even more exotic technologies such as photovoltaics, electric cars and Stirling engine hot water heaters. But such technologies will take time to deploy. In fact, it may be better not to deploy such technologies too fast, as better solutions are still in the laboratories. For example, light emitting diode technology is catching up with fluorescent light technology, and LEDs don't contain mercury. Photovoltaics are also improving rapidly . Rushing can be wasteful. But in a decade or two we will see carbon emissions down by 50% or more if we replace either the income tax or FICA with a carbon tax. And when this happens we may not be able to raise sufficient funds via a carbon tax no matter what the tax rate. At that time another tax will be needed to supplement a carbon tax. For Social Security, a national sales tax would make sense. A sales tax has the same regressivity as FICA, but unlike FICA a sales tax encourages the working class to save. For the income tax, the problem is more challenging. You can find many ideas to help answer this challenge in other chapters on this site. And even should they prove insufficient, and the income tax must be reinstated, the effort would still be worthwhile. The economy could use a vacation.

A carbon tax would decrease carbon emissions The Toronto Star, June 5, 2008 , Thursday, Cut greenhouse gas emissions in ways that preserve
jobs (6/23/08)dateaccessedhttp://www.lexisnexis.com/us/lnacademic/results/docview/docview.do?docLinkInd=t rue&risb=21_T4020462521&format=GNBFI&sort After many years of vague talk by governments about fighting global warming, it is encouraging that the debate has finally begun to tackle specific mechanisms to achieve cuts in greenhouse gas emissions. However, now that policy-makers are considering competing proposals for setting a price on carbon in the Canadian economy, it is vital to make sure that the design preserves and enhances Canadian jobs, especially in the manufacturing sector, rather than accelerating the job-destroying trends already in place. Addressing global warming will require a wide range of measures, including investing in public transit and renewable sources of energy. But currently the debate is focused on carbon taxes and cap-and-trade systems. Monday's announcement by the premiers of Quebec and Ontario that those two provinces will work together on a trading system is the latest step on the road to achieving cuts in greenhouse gas emissions. Manitoba and B.C. are well advanced in working with several U.S. states on a similar arrangement in the Western Climate Initiative. The issue figures to feature prominently in the next federal election, with Liberal Leader Stephane Dion arguing the benefits of a carbon tax, while NDP Leader Jack Layton makes the case that cap-and-trade would do a better job of putting the costs on big polluters rather than on low-income families. Even the counter charge from federal Environment Minister John Baird that the Harper government's approach would be stronger, while lacking in credibility, in its own way advances the day when a mandatory and effective carbon-pricing system will be put into place across Canada. The goal needs to be balanced by avoiding the counterproductive effect that would be created if a carbon-pricing regime in Canada simply displaced production to another jurisdiction that has not yet put a

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comparable system in place. The effect of such displacement would globally result in an increase in greenhouse gas emissions rather than a decrease. Fortunately, promising ideas are already circulating that would help make the transition to a less carbon-intensive economy compatible with maintaining and creating high-quality jobs.

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Carbon tax would reduce the amount of carbon in the atmosphere and to fight global warming - A carbon tax is the only way for the U.S. to regulate carbon levels. Phil Davies, December 2007, Putting a Price on carbon,
http://web.ebscohost.com/ehost/pdf?vid=18&hid=109&sid=afdb72b8-f9d0-4677-954c80d55eecb69b%40sessionmgr102 ; 6/23/08 Maybe—just maybe—politicians are starting to listen to economists. If greenhouse emissions need to be decreased to address global warming (a scientific debate), economic theory suggests that prices rather than quantities are the policy tool of choice. And the most direct way for policymakers to affect price is to impose a tax. "The scientists tell us that world temperatures are rising because humans are emitting carbon into the atmosphere," writes N. Gregory Mankiw, a Harvard University professor and former adviser to Bush, in a September article in the New York Times. "Basic economics tells us that when you tax something, you normally get less of it. So if we want to reduce global emissions of carbon, we need a global carbon tax."

A carbon tax is essential to the overall crisis of global warming. Carbontax.org, May 23, 2008; http://www.carbontax.org/introduction/#cap-and-trade 6/24/08
A carbon tax must be the central mechanism for reducing carbon emissions. Currently, the prices of gasoline, electricity and fuels in general include none of the costs associated with devastating climate change. This omission suppresses incentives to develop and deploy carbon-reducing measures such as energy efficiency (e.g., high-mileage cars and high-efficiency heaters and air conditioners), renewable energy (e.g., wind turbines, solar panels), low-carbon fuels (e.g., biofuels from high-cellulose plants), and conservation-based behavior such as bicycling, recycling and overall mindfulness toward energy consumption. Conversely, taxing fuels according to their carbon content will infuse these incentives at every chain of decision and action — from individuals’ choices and uses of vehicles, appliances, and housing, to businesses’ choices of new product design, capital investment and facilities location, and governments’ choices in regulatory policy, land use and taxation. A carbon tax won’t stop global climate change by itself — other, synergistic actions are required as well. But without a carbon tax, even the most aggressive regulatory regime (e.g., high-mileage cars) and “enlightened” subsidies (e.g., tax credits for efficiency and renewables) will fall woefully short of the necessary reductions in carbon burning and emissions.

Carbon tax would reduce the amount of carbon in the atmosphere and to fight global warming A carbon tax is the only option for fighting the cost of carbon emissions in the environment Daniel Rosenblum, Carbon Tax, not “Peak Oil,” Can Save Climate, 03/5/2007
(http://www.carbontax.org/blogarchives/2007/03/05/carbon-tax-not-peak-oil-can-save-climate-2/ date acc. 6/24/08) The Times article closes by quoting a Chevron engineer: "… peak oil is a moving target [and the supply of] oil is always a function of price and technology." True enough. Our task is to make the use of oil, coal and gas a function of a climate-aware price and technology. At present, the fuel prices that determine the demand side of the equation include nothing for the climate damage resulting from burning those fuels, resulting in vast overuse. Moreover, those feedback mechanisms I mentioned in my 2005 talk invariably overshoot the mark, resulting in the kind of wild price swings that Yergin described. These fluctuations drown out underlying movements toward higher prices, frustrating investment in low-carbon alternatives on both the demand and supply sides. What to do? A tax on carbon fuels will internalize the costs of carbon damage and make manifest today the long-term trajectory of rising carbon-fuel prices. No other policy option — not cap-and-trade, not fuel efficiency standards, not subsidies for renewables — can do that.

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Taxes can eliminate coal Walsh (Bryan, distinguished writer and columnist for Time magazine, 1/04/08, “Plan B — How to Stop
Global Warming”, online: http://www.time.com/time/health/article/0,8599,1700189,00.html, acc: 6/23/08) The key to Brown's Plan B is winding down our dependence on coal — the carbon-heavy fuel that the people over at the environmental website Grist like to refer to as "the enemy of the human race." Right now the world is on pace to build hundreds of new coal power plants over the coming decades, adding vast amounts of carbon dioxide into the atmosphere, and if that happens the fight against global warming is as good as lost. Brown argues that rapid action to improve energy efficiency, develop renewable sources of power and expand the Earth's forest cover could reduce carbon emissions enough to allow us to phase out coal power and meet that 80% target. The numbers are simple. It's easy to ridicule the "switch a light bulb, save the planet" school of environmental planning, but Brown points out that by making the most of efficiency improvements in lighting and appliances, we could reduce power demand sufficiently to obviate the need for 1,410 coal plants. That's more than the 1,382 coal plants the International Energy Agency predicts will be built by 2020. If we start pumping out new wind turbines with the same industrial urgency the U.S. produced tanks and bombers in World War II, Brown writes, we could generate 3 million megawatts of wind power by 2020, enough to meet 40% of the world's energy needs. Solar thermal, plug-in hybrid and geothermal technology are all part of Plan B. (Did you know that the geothermal energy contained in the upper six miles of the Earth's crust is 50,000 times more powerful than all of our oil and natural gas? Brown does.) To push the transition to a cleaner, more efficient economy — the Plan B economy — Brown argues for a worldwide carbon tax to be phased in at $20 per ton each year between 2008 and 2020, topping out at $240 per ton. That might seem excessive, but Brown points out that even a carbon tax higher than $240 per ton wouldn't cover all the environmental and health costs of burning fossil fuels, from climate change to air pollution–related illnesses. And while it's difficult to imagine any politician standing up for such a tax, he reminds us that we already have a precedent for a heavy tax that takes into account negative externalities and attempts to discourage consumption: cigarette taxes. Altogether Brown calculates that his Plan B would cost the world an additional $190 billion a year. That might seem high, until he compares the price tag to the global military budget, which stands at more than $1.2 trillion. All we have to do is find the political and popular will to implement the plan. But that's the problem. Brown's proposals are solid, but the real battle over climate change is now political, not technological, and it's one that too many environmentalists tend to discount. If you've drunk the green Kool-Aid, it can seem frustratingly obvious why we need a $240 carbon tax, or why the climate change challenge is on par with World War II, and thus demands Rosie the Riveter redux. But the true, painstaking challenge of the next few years will be building a broad political coalition that will support that level of commitment. Brown's Plan B is a great blueprint for combating climate change, but we might need a Plan C to put it into action.

Carbon tax would crush the use of coal. Inho Choi, S.J.D., LL.M., The George Washington University Law School, Natural Resources Journal, Fall 2005 lexis
The Midwest and other coal-producing areas will be hardest hit by the imposition of a carbon tax. Midwestern and southeastern coal-fired utilities would have to increase their rates to shift some of the tax burden to consumers, or they would have to absorb the tax burden themselves due to intense competition in the market. n122 Hence, higher electricity prices, production curtailments, or plant shutdowns would result. In either case, the carbon tax system would induce reduced coal consumption and increased use of cleaner fuels.

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Tax on carbon reduces emissionsWilliam C. Brainard and George L. Perry (editors for Brooking’s Paper on Economic Activity) 2005, 2, p. ix- Article- Editor’s Summary
http://muse.jhu.edu/journals/brookings_papers_on_economic_activity/v2005/2005.2brainard.pdf acc: 06-23-08 The authors emphasize that growth in the developing world will be the main driver in carbon buildup. In their base case, the developing countries account for almost 60 percent of emissions in 2025 and 70 percent in 2050.China and India are the countries where the greatest increase in energy consumption will take place and therefore where most new power generating facilities will be built. And it is much less expensive to reduce emissions by building new facilities with the new technology than by retrofitting old ones. Thus any successful program to reduce carbon emissions will have to center on these and other countries in the developing world. The authors note that either a uniform tax on carbon emissions in all regions or a system of global tradable permits—both of which have been proposed—could, in principle, provide the needed incentives to restrain emissions. However, they recognize that negotiations to do either may be difficult, and they believe that the only practical way to reduce emissions may be to secure the cooperation of the limited number of decision makers who license new power plants and set new efficiency standards. Whatever route is taken to achieve global cooperation, since most of the carbon reduction will have to be done in regions that can least afford the added cost, the author’s stress that part of the incremental cost of CCS in China, India, and other developing nations should be borne by the highincome countries.

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Regulations solvency
Carbon tax would get rid of state regulations like tradable permits and fuel efficiency standards. There would be no need for them. Kenneth P. Green, resident scholar, Steven F. Hayward, F. K. Weyerhaeuser Fellow, and Kevin A. Hassett, senior fellow and director of economic policy studies at AEI, American Enterprise Institute, "Climate Change: Caps vs. Taxes" June 2007
Elimination of Superfluous Regulations. Because a carbon tax would cause carbon emissions to be reduced efficiently across the entire market, other measures that are less efficient--and sometimes even perverse in their impacts--could be eliminated. With the proper federal carbon tax in place, there would be no need for corporate average fuel economy standards, for example. California's emissions-trading scheme, likewise, would be superfluous, and its retention only harmful to the Golden State. As regulations impose significant costs and distort markets, the potential to displace a fairly broad swath of environmental regulations with a carbon tax offers benefits beyond GHG reductions.

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Carbon taxes better than CAFÉ
Carbon Taxes more effective than CAFÉ – avoid the driving turns N. Gregory Mankiw 9/16/2007 “One Answer to Global Warming: A New Tax”
http://www.nytimes.com/2007/09/16/business/16view.html?_r=1&oref=slogin&adxnnlx=1190034206IfyuBBCsva2ji8jr7yiItg&pagewanted=all Date Accessed: 6/23/2008 The case for a carbon tax looks even stronger after an examination of the other options on the table. Lawmakers in both political parties want to require carmakers to increase the fuel efficiency of the cars they sell. Passing the buck to auto companies has a lot of popular appeal. Increased fuel efficiency, however, is not free. Like a tax, the cost of complying with more stringent regulation will be passed on to consumers in the form of higher car prices. But the government will not raise any revenue that it can use to cut other taxes to compensate for these higher prices. (And don’t expect savings on gas to compensate consumers in a meaningful way: Any truly cost-effective increase in fuel efficiency would already have been made.) More important, enhancing fuel efficiency by itself is not the best way to reduce energy consumption. Fuel use depends not only on the efficiency of the car fleet but also on the daily decisions that people make — how far from work they choose to live and how often they carpool or use public transportation. A carbon tax would provide incentives for people to use less fuel in a multitude of ways. By contrast, merely having more efficient cars encourages more driving. Increased driving not only produces more carbon, but also exacerbates other problems, like accidents and road congestion.

Carbon tax puts burden on oil industry rather than auto industries Carl Pope (Huffington Post) Sept.29, 2007 “Mister Dingell's Carbon Tax Gambit”
http://www.evworld.com/news.cfm?newsid=16308 acc: 6-23-08 Washington, DC -- It certainly looks like it. The settlement of the short-lived strike by the United Auto Workers is seen as having resolved the threat that retiree health care costs posted to General Motors' competitiveness, and the company's stock price soared on the news. Meanwhile, Congressman John Dingell, whose wife Debbie is a GM lobbyist, has embraced GM's long-standing policy preference in dealing with global warming and America's oil dependence; that is, to tax fuel. Dingell has embraced -officially, at least -- the idea of a $50 per ton tax on carbon, roughly $15 per ton of carbon dioxide, phased in over five years, and pegged thereafter at the rate of inflation. GM prefers a carbon tax, which puts the burden of emissions cuts on the oil industry (and GM's customers), over tougher federal fuel economy standards for cars, trucks and SUVs. Recently, the company also embraced a cap-and-trade system that would also price carbon, thereby joining USCAP, an alliance of environmental and business groups working for such legislation. In announcing his proposal Dingell said, "We need to act in order to prevent a serious problem. The world's best scientists agree we need to reduce greenhouse gas emissions by 60-80 percent by 2050 in order to limit the effects of global warming and this legislation will put us on track to do just that. This is a massive undertaking, and it will not be easy to achieve, but we simply must accomplish this goal; our future and our children's futures depend on it."

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Economy solvency
Carbon tax would provide more flexibility, reducing costs. Congressional Budget Office, A CBO Study, "Policy Options for Reducing CO2 Emissions" February 2008 http://www.cbo.gov/ftpdocs/89xx/doc8934/02-12-Carbon.pdf
Incentive-based approaches can reduce emissions at a lower cost than more restrictive command-andcontrol approaches because they provide more flexibility about where and how emission reductions are achieved. Under a tax, policymakers would levy a fee for each ton of CO2 emitted or for each ton of carbon contained in fossil fuels. The tax would motivate entities to cut back on their emissions if the cost of doing so was less than the cost of paying the tax. As a result, the tax would place an upper limit on the cost of reducing emissions, but the total amount of CO2 that would be emitted in any given year would be uncertain. In contrast, under a cap-and-trade program, policymakers would set a limit on total emissions during some period and would require regulated entities to hold rights, or allowances, to the
emissions permitted under that cap. (Each allowance would entitle companies to emit one ton of CO2 or to have one ton of carbon in the fuel that they sold.) After the allowances for a given period were distributed, entities would be free to buy and sell the allowances among themselves. Unlike a tax, a cap-and-trade program would place an upper limit on the amount of emissions, but the cost of reducing emissions would vary on the basis of fluctuations in energy markets, the weather (for example, an exceptionally cold winter would increase the demand for energy and make meeting a cap more expensive), and the

technologies available for reducing emissions. Given the gradual nature of climate change, the uncertainty that exists about the cost of reducing emissions, and the potential variability of the cost of meeting a particular cap on emissions at different points in time, a tax could offer significant advantages. If policymakers chose to specify a long-term target for cutting emissions, a tax could be set at a rate that could meet that target at a lower cost than a comparable cap. In addition, if policymakers set the tax rate at a level that reflected the expected benefits of reducing a ton of emissions (which would rise over time), a tax would keep the costs of emission reductions in balance with the anticipated benefits, whereas a cap would not.

Carbon taxes allows greater flexibility for price-fluctuations. Congressional Budget Office, A CBO Study, "Policy Options for Reducing CO2 Emissions" February 2008 http://www.cbo.gov/ftpdocs/89xx/doc8934/02-12-Carbon.pdf
If the government wanted to maximize expected net benefits, it would need to set the level of a cap or a tax in a given year on the basis of its best estimate of both the costs and benefits of reducing emissions in that year. However, actual costs in any year are likely to differ from the best estimate, sometimes exceeding it and sometimes falling below it. Because a tax would motivate

only emission reductions that cost less than the tax rate, it would automatically adjust the quantity of emission reductions to keep their costs in line with their anticipated benefits, whereas a cap would not. When analysts take into account the degree to which costs are likely to vary around a single best estimate, they conclude that a tax could offer much higher net benefits than a cap. One study suggests that the net benefits of a worldwide tax on CO2 emissions in 2010 would be more than eight times larger than those of an equivalent
inflexible cap. If the policies are assumed to be set in place for 100 years, the efficiency advantage of a tax declines to a factor of five.9 Another study concluded that a tax could offer up to 16 times greater expected net benefits than a cap under some assumptions.10 A third study examined outcomes when cost shocks were assumed to be correlated across time—that is, an unusually high cost of meeting the cap in any given year increases the likelihood of a higher than average cost in the following year. Using their base-case parameter estimates for factors that might affect costs (such as baseline emissions and changes in technology) and assuming a 10-year policy, those researchers estimated that the net benefits of a tax would be roughly five times higher than those of a cap.11 Taken together, those studies suggest that the net benefits of a tax could be roughly five times those of an inflexible cap (see Figure 1-2)—assuming that both policies were designed to balance expected costs and benefits. Viewed another way, any long-term emission-reduction

target could be met by a tax at a fraction of the cost of an inflexible cap-and-trade program. That cost savings stems from the fact that a tax could better accommodate cost fluctuations while simultaneously achieving a long-term emission target. It would provide firms with an incentive to undertake more emission reductions when the cost of doing so was relatively low and allow them to reduce emissions less when the cost of doing so was particularly high.

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Economy solvency
Carbon tax avoids inevitable economic collapse from other alternatives – namely, cap-and-trade. The Economist, “Doffing the cap; Economics focus” June 16, 2007 lexis
Tradable emissions permits are a popular, but inferior, way to tackle global warming The pressure for political action on climate change has never looked stronger. Even George Bush has now joined the leaders of other rich countries in their quest to negotiate a successor regime to the Kyoto protocol, the treaty on curbing greenhouse gases that expires in 2012. Too bad, then, that politicians seem set on a second-best
route to a greener world. That is the path of cap-and-trade, where the quantity of emissions is limited (the cap) and the right to emit is distributed through a system of tradable permits. The original Kyoto treaty set up such a mechanism and its signatories are keen to expand it. The main market-based alternative—a carbon tax—has virtually no political support. A pity,

because most economists agree that carbon taxes are a better way to reduce greenhouse gases than capand-trade schemes. That is because taxes deal more efficiently than do permits with the uncertainty surrounding carbon control. In the neat world of economic theory, carbon reduction makes sense until the marginal cost of cutting carbon emissions is equal to
the marginal benefit of cutting carbon emissions. If policymakers knew the exact shape of these cost and benefit curves, it would matter little whether they reached this optimal

But in the real world, politicians are fumbling in the dark. And that fumbling favours a tax. If policymakers set a carbon tax too low, too much carbon will be emitted. But since the environmental effect of greenhouse gases builds up over time, a temporary excess will make little difference to the overall path of global warming. Before much damage is done to the environment, the carbon tax can be raised. Misjudging the number of permits, in contrast, could send permit prices either skywards or through the floor, with immediate, and costly, economic consequences. Worse, a fixed allotment of permits makes no adjustment for the business cycle (firms produce and pollute less during a recession). Cap-and-trade schemes cause unnecessary economic damage because the price of permits can be volatile. Both big cap-and-trade schemes in existence today—Europe's EmissionsTrading Scheme for carbon and America's market for trading sulphur-dioxide permits (to reduce acid rain)— suggest this volatility can be acute. America has had tradable permits for SO{-2} since the mid1990s. Their price has varied, on average, by more than 40% a year. Given carbon's importance in the economy, similar fluctuations could significantly affect everything from inflation to consumer spending. Extreme price volatility might also deter people from investing in green technology. Even without the volatility, some economists reckon that a cap-and-trade system produces fewer incentives than a carbon tax for climate-friendly innovation. A tax provides a clear price floor for carbon and hence a minimum return for any innovation. Under a cap-and-trade system, in contrast, an invention that reduced the cost of cutting carbon emissions could itself push down the price of permits, reducing investors' returns. To avoid
level by targeting the quantity of emissions (through a cap) or setting the price (through a tax).

these pitfalls, some cap-and-trade advocates want to set price floors and ceilings within carbon-trading systems. One of the most prominent bills in America's Congress, for instance, includes a "safety valve". If the price of carbon rises beyond a threshold, the government will allocate an unlimited supply of permits at that price. Such reforms, in effect, make a cap-and-trade system work more like a carbon tax. A third advantage of carbon taxes is that they raise revenue. Governments can use this cash to reduce
other inefficient taxes, thereby cutting the economic costs of carbon abatement. Or they can use the money to compensate those, such as the poor, who are hit disproportionately hard by higher fuel costs. Cap-and-trade schemes, in contrast, have traditionally given away permits, which leaves no room to reduce the economic costs of climate control by cutting taxes elsewhere. But here, too, change may be afoot. To mimic the advantage of a carbon tax, many cap-and-trade fans now want governments to auction at least a share of the permits. All of which raises an important question. If cap-and-trade schemes are to be reformed so that they look more like carbon taxes, why are politicians so reluctant

One reason is that their environmental benefits are harder to explain. It is intuitively easier to grasp how a carbon cap will slow global warming. Taxes are also more prone to ideological caricature, particularly in America, where many conservatives argue instinctively that all taxes are bad. Too many politicians pretend that carbon taxes will hurt consumers more than a cap-and-trade scheme, even though the cost of carbon permits will be passed on to consumers just as quickly as a tax. But the biggest problem, at least politically, is that carbon taxes are transparent and simple, whereas capand-trade systems are complicated and conveniently opaque. Under a cap-and-trade scheme, governments can pay off politically powerful polluters (such as the coal industry) by giving them permits. Even more important, rich countries can pay poorer ones to cut their emissions without any cash changing hands between governments. Under a carbon tax such transfers must go through the government's budget. And that can be politically tricky. However sensible it sounds to an economist, American voters may be loth to see their tax dollars funding fat cheques for China.
to impose carbon taxes in the first place? Add in these political arguments and the choice between a carbon tax and cap-and-trade becomes less obvious. Politicians are heading down the second-best path to combat climate change, but it may be the only one that leads anywhere.

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Oil solvency
Implementing carbon tax will decrease oil dependence climateandenergy.org, 2007 “Dangers of oil dependence”
http://www.climateandenergy.org/Explore/DangersOfOilDependence/Index.htm Date Accessed: 6/23/08 Moving away from fossil fuels can lower greenhouse gas emissions, strengthen our economy, and ease international tensions. Unhealthy relationships. The dangerous dynamic of oil dependency creates a foreign policy problem for
the globe, not just the U.S. All too often, foreign policy finds itself filtered through the lens of oil. Oil-producing nations (such as Iran, Saudi Arabia, Russia, Venezuela, and Nigeria) have the oil-consuming U.S. and European Union at a significant disadvantage. Western countries are forced to compete for resources with Japan, India, and China, and experience pressure to compromise on important policy measures. In the U.S., hunger for fossil fuels also requires high defense budgets (that contribute to increased deficit spending), and draws attention away from the domestic agenda. Use and abuse. Global oil consumption is growing, especially in developing nations, and related human rights abuses are increasing as well. Chaos. Oil revenues can wreak havoc on developing economies where democracy is fragile and/or authoritarian, corrupt regimes pose significant threats. Those who control the oil reap the profits while the rest of the population struggles with poverty, human rights abuses, civil unrest, radicalism, and terrorism. Cycles and Complications. During the last century, this destructive cycle became apparent in the oil-rich Middle East. Today it is occurring in Africa, as that continent too becomes a growing source of oil exports. With extreme weather like droughts and flooding, plus increased famine and disease, climate change is likely to complicate and intensify these problems. More than Oil. Problems of oil dependence are not just about transportation. Fossil fuels and their by-products are the basis for a disproportionate amount of our economy. The manufacture of many other valuable products – plastics, fertilizers, medical technologies, etc. – also depends on petrochemicals. Our economy is far too dependent on a fossil fuel model in general - burning fossil fuels of any kind produces some amount of greenhouse gas emissions, which in turn contributes to climate change. This is always risky. Solutions. We can begin the transition toward a new energy economy not dependent on fossil fuels. Plan Ahead. Increased incentives are needed to encourage more research, development, and demonstration projects – such as for biorefineries, technologies for carbon sequestration and compressed air storage, batteries for hybrids and electric vehicles, etc. One way to finance these incentives is to implement a revenue-neutral carbon tax. The proceeds can be split between research and development of renewables, and tax credits (or dividends) that mitigate the carbon tax’s impact on lower-income people. Consume wisely. Reducing consumption of all fossil fuels helps to lower greenhouse gas emissions and avert radical climate change. Switching to alternative fuels and technologies like plug-in hybrids will help decrease oil and gas dependence. Increasing CAFE standards, offering tax credits for fuel-efficient vehicle purchases, and supporting public transportation helps as well. Energy prices should accurately reflect the true costs of energy security, environmental impacts like climate change, and the need to preserve fossil fuels – which are non-renewable resources - for future generations.

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Oil solvency
Carbon tax spurs innovation and solves dependence. Daniel Rosenblum, carbontax.org, "A Carbon Tax When Oil Approaches $100/Barrel?" November 9, 2007 http://www.carbontax.org/blogarchives/2007/11/09/a-carbon-tax-when-oil-approaches-100barrel/
Rising Global Demand for Oil Provoking New Energy Crisis according to today’s New York Times. Yesterday’s front page of the Wall Street Journal headlined As Energy Prices Soar, U.S. Industries Collide. Why not just rely upon high gasoline prices to bring down demand instead of “adding insult to injury” with a carbon tax? One reason is that high gasoline prices alone are not

enough to reduce consumption of gasoline and the resulting carbon dioxide emissions. Consumers, whether businesses or households, need a clear price signal that future prices are going to remain high before they are motivated to make the investment decisions necessary to reduce consumption. The volatile gas prices of the last few years just don’t provide that kind of signal. The rising global demand for oil
headlined in the Times story is faster in developing countries, but as the Times correctly noted, “Americans’ appetite for big cars and large houses has pushed up oil demand steadily in this country, too.” The problem is that while it may be a rational economic decision to invest in a more efficient car, house, truck or airplane if gas prices are expected to remain at or above current levels, the economic decision-making is very different if consumers believe prices may plummet in two months. Europe has had considerably higher gasoline prices for many years and, not coincidentally, Europeans generally drive much smaller and more efficient vehicles. While volatile prices do not encourage investment in efficiency, a clear and certain trajectory of increasing carbon taxes would do so. The revenue-neutral carbon tax proposed by the Carbon Tax Center provides that clear price signal. And, the

gradual trajectory of increased prices that we propose gives consumers time to adjust to the higher prices by both investing in efficiency and making behavioral changes that will further reduce energy use. For more
on how consumer demand for gasoline responds to price, see our issue paper by clicking here. Another important reason why a carbon tax continues to be essential even with high oil prices is that the goal of a carbon tax is to reduce carbon dioxide

emissions, not just to reduce consumption of gasoline. Generation of electricity accounts for approximately 40% of carbon dioxide emissions , compared to about 21% from gasoline and 4% from aviation. Two-thirds of the emissions reductions from a carbon tax are expected to come from the electricity sector, 11% from gasoline and only 1% from aviation. Coal use is increasing and will continue to increase
without a price signal that reflects the harm caused by carbon dioxide emissions from coal-fired electric generating plants. In addition, high oil prices encourage the development of new sources of energy with huge carbon dioxide

emissions such as the Alberta oil sands projects. Tar sands development is the single largest contributor to the increase in climate change in Canada according to Greenpeace Canada. Even worse, according to a study by the Sage
Centre and World Wildlife Fund-Canada, "voracious water consumption by Alberta's oilsands threatens the quality and quantity of water available to Saskatchewan and the Northwest Territories through the Mackenzie River system." In fact, today's New York Times cites a new study finding that "[h]igh levels of carcinogens have been found in fish, water and sediment downstream from Alberta's huge oil sands projects." A carbon tax would reduce the economic incentive for such projects by holding down the price of oil. A carbon tax actually applied to such projects would destroy their economics. Finally, right

now the high oil prices are enriching oil producing countries and oil companies and causing severe damage to the United States economy. A revenue-neutral carbon tax will reduce demand and lead to reduced prices for the oil itself. The results? Reduced carbon dioxide emissions, less money going overseas and to big oil companies, carbon tax revenues returned to all Americans and strengthening our economy, and increased national security as we reduce our dependence on foreign oil. Win-win-win-win!

Carbon Taxes prove to decrease dependency on oil Bill Bradley (Washington Post) We Can Get out of These Ruts April 1, 2007
http://www.washingtonpost.com/wp-dyn/content/article/2007/03/30/AR2007033002071_pf.html acc: 6-2308 We also need to change our tax system to reduce our oil dependence. In general, we ought to reduce taxes on things we need, such as wages, and raise taxes on whatever is dangerous to us, such as pollution and resource depletion. We could implement a $1 per gallon gasoline tax; or an equivalent carbon tax, which is a tax on any energy source that emits carbon dioxide; or equivalent taxes on other major air pollutants: volatile organics, nitrogen oxide, lead, sulfurous dioxide and particulates. These taxes could be phased in over five years, with the revenue going to reduce employment taxes (Social Security, Medicare or unemployment insurance) for employees and employers alike. The gasoline or carbon tax would encourage the nation to reduce its dependence on insecure sources of foreign oil, and with payroll taxes reduced to 15 percent of labor costs; businesses would have an incentive to hire workers.

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Carbon Tax is the only way to solve oil dependence Charles Komanoff 24 June 2006 Fuel Tax Magic http://www.energybulletin.net/node/17867 Accessed
June 26, 2008 … ...I offer two answers. Combined, they just might hold a solution to our era's twin overriding crises: the oil-dependence crisis and the climate crisis. The first answer is that as we extend our time horizon, gasoline's price-elasticity, or price sensitivity to break free of the jargon, gets larger -- a lot larger. Going out several years or more, individuals have greater scope to take actions that economize on gasoline. They can junk the gas-guzzler, or at least not replace it with another one when the old one gives out. They might calculate the dollar tradeoffs between density (high rents but less need to drive) and sprawl (the reverse) and pick up stakes for a less car-dependent area. They may gravitate toward job opportunities closer to home. And they can make more durable commitments to behavioral changes that reduce the need to drive, like forming a carpool or buying a roadworthy bicycle or selling the far-away vacation home. The consensus of economists who have studied gasoline use is that the "long-term" price elasticity -- the effect on demand eight or ten years hence -- is between 50% and 70%, or roughly triple the 20% "short-term" elasticity I'm seeing in my spreadsheet. That is, over the long haul, rises in the price of gas are likely to dampen demand several times as much as the modest changes we've seen in the past year or two. The second reason price-elasticity matters is that prices of gasoline and other fuels will probably climb in the future. Or, to be candid, fuel prices need to climb far and fast if America is to ever get off the oil spike and the world as a whole is to avoid disastrous climate change. For all the promising antidotes to oil dependence, from ethanol and hybrid cars to rearranging living patterns so people and goods don't have to move as much, there's a growing awareness that the only surefire way to advance on all fronts is to create an irresistible and universal market pull by pricing gasoline at a very high level -- perhaps in the $10 a gallon range. And now that the climate crisis is overtaking oil dependence as the ultimate energy nightmare, people are starting to face the fact that only vastly higher prices for all fossil fuels can reduce CO2 emissions across the board, through conservation, not just of gasoline but of all petroleum products as well as natural gas and coal. Yes, I'm talking about a carbon tax -- the only mechanism powerful and direct enough for the daunting task of phasing out fossil fuels.

Carbon tax decreases oil consumption Carbon Tax Center (an organization supporting an American carbon tax, 2/26/08, “Frequently Asked
Questions and Answers about Carbon Taxes”, online: http://www.carbontax.org/faq/, acc: 6/23/08) Will a carbon tax lessen U.S. oil dependence? You bet it will. Petroleum products account for 42% of U.S. CO2 emissions from burning fuels (coal and natural gas are responsible for 36% and 22%, respectively), so a carbon tax stiff enough to cut down heavily on CO2 will necessarily put a big dent in oil consumption.

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Carbon Tax would decrease oil dependence & reduce employment taxes Bill Bradley 4/1/2007 “We can get out of these ruts” http://www.washingtonpost.com/wpdyn/content/article/2007/03/30/AR2007033002071_pf.html Date Accessed: 6/23/2008 We also need to change our tax system to reduce our oil dependence. In general, we ought to reduce taxes on things we need, such as wages, and raise taxes on whatever is dangerous to us, such as pollution and resource depletion. We could implement a $1 per gallon gasoline tax; or an equivalent carbon tax, which is a tax on any energy source that emits carbon dioxide; or equivalent taxes on other major air pollutants: volatile organics, nitrogen oxide, lead, sulfurous dioxide and particulates. These taxes could be phased in over five years, with the revenue going to reduce employment taxes (Social Security, Medicare or unemployment insurance) for employees and employers alike. The gasoline or carbon tax would encourage the nation to reduce its dependence on insecure sources of foreign oil, and with payroll taxes reduced to 15 percent of labor costs, businesses would have an incentive to hire workers. Such a shift in taxation -- away from jobs and toward pollution, energy and natural resources -- would draw many of the 24 million part-time employees into the full-time workforce, and millions more who are not working would be more likely to find jobs. After a few years of adjustment in the case of a gasoline or carbon tax, cars would be more fuel-efficient, so consumers would pay what they used to pay for the same amount of driving, and the broad middle class would continue to pay lower employment taxes. The result would be increasing demand for goods and services; shrinking dependency payments such as unemployment compensation and welfare; lowered social costs, such as crime and avoidable illness; and a more equitable tax system that encourages rising employment.Reducing employment taxes also makes sense on grounds of competitiveness and equity. Employment taxes now hit our most successful companies hardest. A company such as Microsoft or McKinsey desperately needs talented people, and there is a limited pool of those with the requisite skills. As a part of a company's compensation package, it has to pay enough to offset the employment taxes paid by the employee. If it doesn't make up the taxes in higher wages, the employee can go somewhere else where the employer will cover the taxes. Meanwhile, at a lumberyard where there is an excess of labor, the company doesn't have to pay higher wages and the bulk of the employment taxes hit the workers. Perversely, it is the lowest-paid workers and the companies most essential to economic growth that are hit hardest by employment taxes. We will never make these simple changes in our political system or in our energy and tax systems if we don't tell the truth about our national circumstances. Political leaders should not arrogate to themselves, based on a desire to hold onto political power, the right to hide the truth from the people. If we tell people the truth we can trust them to do the right thing. Sounds like a radical notion, but it's really just common sense. Once we face the truth about our abysmal voter turnout, our oil addiction, our health-care and education crises, and our inadequate national savings, there is good news. There are answers to all our current problems. It's not rocket science. What's required is the political will to enact policies that can allow us to thrive in the 21st century. An administration bold enough to tell the truth will find an audience ready for bold solutions.

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Increased taxes result in reduced consumption Knickerbocker, Brad, February 2008 “North America Gets Its First Carbon Tax”. Christian Science
Monitor Vol. 100 Issue 65 Acc: 06/23/08 http://web.ebscohost.com/ehost/detail?vid=3&hid=107&sid=640d75aa-bd8f-45b7-aa39fba35986f2c4%40sessionmgr103
Taxing carbon-spewing machines to slow global warming certainly has an eat-your-peas aspect to it: "Trade your SUV for a hybrid or we'll make you pay!" Then again, tax policy can have a huge and positive impact on individual and group

behavior. In part, high cigarette taxes explain why rates of smoking among Americans have plummeted. The Canadian province of British Columbia last week became the first jurisdiction in North America to enact a consumer-based tax on carbon emissions. The Vancouver Sun reported: "The move was seen as a huge win by environmentalists, who depicted B.C. as a leader in taking action on climate change. 'I think this is a landmark decision in North America as far as government addressing global warming,' said Ian Bruce of the Suzuki Foundation. 'The B.C. government has decided to use one of the most powerful incentives at its disposal to reduce pollution,' he added…." The goal is to raise US$1.75 billion over the next three years by taxing virtually all fossil
fuels, including gasoline, diesel, natural gas, coal, propane, and home-heating fuel. It starts in July at $10 per ton of carbon emissions, rising to $30 per ton by 2012. Consumers will pay an extra 2.4 cents a liter (9 cents per US gallon) this year for gasoline, rising to 7.2 cents by 2012. Home heating oil would rise 2.8 cents a liter (10.6 cents per US gallon), going up to 8.3 cents per liter over the same period. The Globe and Mail (subscription required) reported: "'It has been a dramatic turn, I think, for this province with this budget to say we're not just going to be talking about climate action,' said Finance Minister Carole Taylor. She said the strategy is to 'tax something that we know is bad for us,' and use the revenue to stimulate wide social change by providing incentives for people and businesses to become more energy efficient." The plan is meant to be "revenue neutral," meaning that overall taxes won't climb. To compensate, corporate and personal income tax rates will drop, and low-income families will receive an annual tax credit of $100 per adult and $30 per child. To jump start the program, every resident will get a one-time payment of $100 this year. The Canadian Press reported: "[British Columbia] Premier Gordon Campbell said he won't try to pressure any other provinces to take action on climate change but he hopes B.C. serves as an example. He said by giving British Columbians tax breaks on things such as fuel-efficient cars and energy-efficient appliances, British Columbians are being given real choices on battling climate change. 'It'll drive investment in the economy,' Campbell said. " The new carbon tax is not seen as a panacea. It's expected to help cut B.C.'s greenhouse-gas emissions by about 5 percent by 2020, but that's well short of the government's goal of a 33 percent reduction. The Times Colonist in Victoria, B.C., quotes University of Victoria climatologist Andrew Weaver as saying that the tax will send an important message: "To me, what's important is the actual signal to the market that carbon is going to have a price. And that price is going up, not down. And that, in itself, is enough to do a paradigm shift as to how we do stuff." So far, the rest of Canada is not following British Columbia's lead. Ontario's strategy, for example, includes a commitment to shut down the province's coal-fired generating plants. United Press International quotes Ontario Premier Dalton McGuinty as saying: "We're doing something differently here in Ontario that suits our economy and the direction that we're pursuing…." Some federal officials in Canada are concerned that individual plans by provinces could be more costly and less efficient than a unified approach. The National Post reported:"'(Canadians) don't want to pay more for cars, they don't want to pay more for other things because the governments can't get their act together and co-operate,' [Finance Minister Jim Flaherty] said." That's essentially the argument the Bush administration has been using to block California and other states from regulating vehicle greenhouse gas emissions.

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Global modeling
Other Countries model after U.S. policies Makram Haluani 2003 “Benign Neglect: Cooperation in the Western Hemisphere”
http://www.questia.com/googleScholar.qst;jsessionid=LjnV1YQL29qLRWD5yq0y2LFPyXBy1yyNjxDv2 Ks3L6Qvdvycfxrh!-1672927978?docId=5000642709 Date Accessed: 6/26/2008 Governments around the world base foreign policy strategies on their interpretations of US attitudes. They look for both consistencies and changes in the speeches, press conferences, and remarks of senior US officials. The course of international events depends on these attitudes, and the rest of the world knows it. This practice is especially true of Latin American countries, whose governments have followed recent trends in US presidential discourse with some concern. On August 25, 2000, Republican presidential candidate George Bush proclaimed, "Should I become president, I'll look south, not as an afterthought, but as a fundamental commitment." He assured his audience that he would be the "mejor amigo" of Latin America. Indeed, as president, Bush's first visit abroad was to Mexico and not to Canada, a significant departure from tradition. According to Bush, Latin America holds a central place in US...

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International efforts to reduce warming will be rolled back without US action. Liana G.T. Wolf, Yale Law School, J.D., Georgetown International Environmental Law Review, Fall 2006 lexis
When a problem requires action by many different nations, the most ideal solution usually arises out of multilateral cooperative behavior. However, when such an ideal solution is not obtainable, other mechanisms must be used
to achieve joint action. This paper proposes the SCM Agreement as a viable mechanism for encouraging countries to internalize their environmental costs that have global effects. Under the SCM Agreement as written, or under the proposed amended version, the failure of the United States to impose the costs of reducing greenhouse gas emissions on its energy intensive industries should be classified as a hidden subsidy subject to countervailing duties. These countervailing duties could be used for funding climate change projects, and they could compensate for the trade distorting effects of the U.S. action. n168 This would give the United States the incentive to actively reduce its greenhouse gas emissions in a more cost effective manner since the countervailing duties could only continue as long as the trade distorting subsidy was in effect. The international system is currently plagued by "poor stewardship of the global commons, lack of liability for transboundary environmental harms, and free riding in treaties." n169 [degree] If the European Union and other countries are going to absorb the costs of reducing greenhouse gas emissions, the United States should not be able to reap a competitive advantage from shirking its own environmental responsibilities. If the United States is

allowed to shirk its responsibilities, the European Union and various other industrialized countries may be forced to reduce their environmental efforts to remain competitive in the international market. If that occurs, global warming will continue to have an increasingly destructive effect on the global environs.

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Taxes good
Carbon taxes are revenue neutral. Carbon Tax Center, May 2008, http://www.carbontax.org/introduction/#no-tax-increase Acc:
06/26/08 A carbon tax should be revenue-neutral. At least that’s what we (Carbon Tax Center) and many other carbon tax proponents are advocating. Revenue-neutral means that little if any of the tax revenues raised by taxing carbon emissions would be retained by government. The vast majority of the revenues would be returned to the American people, with some small amount utilized to mitigate the otherwise negative impacts of carbon taxes on low-income energy users. Two primary return approaches are being discussed. One would rebate the revenues directly through regular (e.g., monthly) equal dividends to all U.S. residents. In effect, every resident would receive equal, identical slices of the total revenue pie. Just such a program has operated in Alaska for three decades, providing residents with annual dividends from the state’s North Slope oil revenues. In the other method, each dollar of carbon tax revenue would trigger a dollar’s worth of reduction in existing taxes such as the federal payroll tax or state sales taxes. As carbontax revenues are phased in (with the tax rates rising gradually but steadily, to allow a smooth transition), existing taxes will be phased out and, in some cases, eliminated. This “tax-shift” approach, while less direct than the dividend method, would also ensure that the carbon tax is revenue-neutral. Note that each individual’s receipt of dividends or tax-shifts would be independent of the taxes he or she pays. That is, no person’s benefits would be tied to his or her energy consumption and carbon tax “bill.” This separation of benefits from payments preserves the incentives created by a carbon tax to reduce use of fossil fuels and emit less CO2 into the atmosphere. Of course, it would be extraordinarily cumbersome to calculate an individual’s full carbon tax bill since to some extent the carbon tax would be passed through as part of the costs of various goods and services.

Taxes good, laundry list Barrett and Hoerner (James and J. Andrew, economists for the Economic Policy Institute and the Center for a Sustainable Economy, “Clean Energy and Jobs”, Feb 02, online:
http://www.epi.org/studies/cleanenergyandjobs.pdf, acc: 06/24/08) Relative to the base case, we estimate that the policy package would have the following results: U.S. carbon emissions would decline by 27% in 2010 and by 50% in 2020. Other greenhouse gasses and pollutants would also decline. GDP would increase by a modest 0.24% in 2010 and by 0.6% in 2020. An additional 660,000 net jobs would be created in 2010, 1.4 million in 2020. This would increase employment in the service sector and reduce the rate of decline in employment in manufacturing. Unemployment would fall and real after-tax wages would rise. Oil imports in 2020 would fall from the baseline forecast by an amount slightly higher than total current U.S. purchases of oil from OPEC. Household energy bills would fall in every year, by a steadily rising amount. The effect on income distribution would be slightly progressive.

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Taxes good
A carbon tax would allow us to reduce income tax. Moffat, Mike, 2007 About.com
http://economics.about.com/od/incometaxestaxcuts/a/pigouvian_tax.htm Like Dr. Greg Mankiw, I am also a big fan of Pigovian taxes. He quite rightfully points out that they "allow us to correct market failures without heavy-handed regulations, while raising government revenue so we can reduce more distortionary forms of taxation." So like Mankiw, I'm a supporter of the aims of the Pigou Club. What are Pigovian Taxes Wikipedia has an excellent article on Pigovian taxes, which begins: "A Pigovian tax is a tax levied to correct the negative externalities of a market activity. For instance, a Pigovian tax may be levied on producers who pollute the environment to encourage them to reduce pollution, and to provide revenue which may be used to counteract the negative effects of the pollution. Certain types of Pigovian taxes are sometimes referred to as sin taxes, for example taxes on alcohol and cigarettes." In a country like Canada with socialized medicine, the cigarette tax atcs as a Pigovian tax - it (more than) raises the revenue necessary to offset the expense to the health care system generated by smoking. Why I Support Pigovian Taxes One of the uses of taxes is to discourage activity that has negative externalities, or we believe is otherwise economically/socially harmful. That's why these 'sin' taxes exist - they discourage people from smoking and drinking. It's also argument often put forward by those in favour of marijuana legalization - that a better and more cost-effective way of detering usage would be to legalize marijuana and tax it rather heavily. These taxes also raise revenue for the state. In 2004-2005, the Canadian government collected $16.7 billion in "other" taxes, which were largely Pigovian taxes such as energy taxes and excise taxes on cigarettes and alcohol. Since taxes deter the activity that is being taxed, then why in the world would we ever tax income? Don't we want to encourage hard work and entrepreunership? Yet in Canada, over 45 percent of federal government revenue comes from personal income taxes and 15 percent comes from corporate income taxes. I've been rather hard on the supporters of the FairTax, but they have the right idea. Taxing activities we wish to encourage (work) does not make a great deal of sense when we can tax acitivities we are not as interested in promoting (consumption). The FairTaxers take it too far - the amount of revenue needed to finance all the government programs we value cannot be generated by simply a consumption tax alone. But the basic idea is sound. I live in the Southwestern Ontario region of Canada, an area with perhaps the poorest air quality in all of the country. Each year we have a record number of smog days. Wouldn't it make sense that we try to discourage the use of electricity generated from coal and the use of fossil fuels? Yes, this would have negative effects on the economy in isolation, but if we used the revenue generated from such a tax to lower employment insurance premiums or income tax rates, it's likely that the net economic effect would be positive. Yes, we can go too far with Pigovian taxes. Wikipedia states that "One argument that has been put forward against the levying of Pigovian pollution taxes is that if the tax is too high it will lead to a level of pollution that is less than the social optimum." But can anyone claim that we have the current optimum level of work? The optimum level of investment? The optimum level of savings? If we are forced to overtax something, and we are given the cost of running government, air pollution seems like the best place to start. It's true that Pigovian taxes tend to be regressive in the sense that they cause the poor to pay a higher proportion of their income on them than the rich. While this doesn't seem to bother many when we discuss raising the taxes on cigarettes, the overall effect of increased use of Pigovian taxes would cause a level of regressivity that Canadians are uncomfortable with. This regressivity effect can be eliminated through bundling Pigovian taxes with some form of negative income tax, like the U.S. Earned Income Tax Credit, such that average tax rates remain progressive. With so many advantages, I full-heartedly support the increased use of Pigovian taxes in Canada or any other country. While I'm not a famous well-respected economist like Dr. Mankiw, I would still like to ask for a membership into his club.

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Price volatility – carbon tax solves
Carbon tax locks in price stability. Kenneth P. Green, resident scholar, Steven F. Hayward, F. K. Weyerhaeuser Fellow, and Kevin A. Hassett, senior fellow and director of economic policy studies at AEI, American Enterprise Institute, "Climate Change: Caps vs. Taxes" June 2007
As the experiences of the European ETS and California's RECLAIM show us, pollutiontrading schemes can be easily gamed, resulting in significant price volatility for permits. Imagine one's energy bill jumping around as permits become more or less available due to small changes in economic conditions. A carbon tax would be predictable, and by raising the overall price of energy to include the tax, the portion of energy cost per unit that stems from fluctuation in market rates for fossil fuels shrinks as a percentage of the whole. That shrinkage makes the price of a given form of energy less susceptible to volatility every time there is a movement in the underlying production costs.
Price-Stabilization.

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Price volatility – economy
Price predictability avoids global economic collapse. Michael J. Zimmer, attorney at Thompson Hine LLP in the energy practice and also serves this academic
year with the Ohio University Consortium of Energy, Economics and the Environment, Sustainable Development Law & Policy, Winter 2008 lexis A carbon tax sets a market clearing price that encourages predictable energy prices. Predictability is important
because when future energy and power prices can be reliably calculated in advance, energy-critical decisions can be made with the full awareness of carbon price signals. Once these price signals are added to the costs that industry must factor

into the cost of doing business, they can affect plant and building design considerations, new clean technology development, electricity storage and deployment for industry, and appliance selection and the purchase of the family car for the individual. n6 The United States has had tradable permits for sulfur dioxide ("SO[2]") since the enactment of the Clean Air Act Amendments of 1990. In that period, the tradable permits have varied in price by over forty percent. n7 Yet due to carbon's higher relative market penetration within the United States and global economy, compared to that of SO[2], similar price fluctuations would likely affect all aspects of the U.S. economy, including consumer spending, budgeting, capital expansion, and inflation. n8

Price volatility can wreck the economy and stem alternate energy production. Congressional Budget Office, A CBO Study, "Policy Options for Reducing CO2 Emissions" February 2008 http://www.cbo.gov/ftpdocs/89xx/doc8934/02-12-Carbon.pdf
The flexibility in reducing emissions that a tax affords is important because the cost of cutting emissions by a given amount could vary from year to year depending on such factors as the weather, the level of economic activity, and the availability of low-carbon technologies. A tax would provide a steady, predictable price for emissions. An inflexible cap, however, could

result in volatile allowance prices, making a cap-and-trade program more disruptive to the economy than a tax would be. Experience with cap-and-trade programs has shown that price volatility can be a major concern when a program’s design does not include provisions to adjust for unexpectedly high costs and to prevent price spikes. For example, one researcher found that the price of sulfur dioxide allowances under the U.S. Acid Rain Program was significantly more volatile than stock prices between 1995 and 2006 (see Figure 1-3).12 Price volatility was most
apparent in the summer of 2000 in Southern California’s Regional Clean Air Incentives Market (RECLAIM), a program that capped emissions of nitrous oxide (NOx) from the power sector. A heat wave caused demand for electricity to soar that summer, while the availability of imported power from other states declined. The increase in demand had to be met by running many of California’s old gas-fired generating facilities, which had not yet installed NOx emission controls. As a result, the demand for NOx RECLAIM Trading Credits for 2000 rose significantly, boosting their average annual price tenfold (from $4,284 per ton in 1999 to almost $45,000 per ton in 2000) and contributing to high wholesale electricity prices in California during that period.13 In addition to the California experience, allowance prices in the European Union’s (EU’s) Emission Trading Scheme (ETS)—a trading program that covers CO2 emissions from roughly 12,000 sources across 27 countries—fell drastically when it became

evident that policymakers had overallocated emission allowances. Price volatility could be particularly problematic with CO2 allowances because fossil fuels play such an important role in the U.S. economy. They accounted for 85 percent of the energy consumed in the United States in 2006. CO2 allowance prices could affect energy prices, inflation rates, and the value of imports and exports. Volatile allowance prices could have disruptive effects on markets for energy and energy-intensive goods and services and make investment planning difficult.14 The smoother price path offered by a CO2 tax would better enable firms to plan for investments in capital equipment that would reduce CO2 emissions (for example, by increasing efficiency or using low-carbon fuels) and could provide a more certain price signal for firms considering investing in the development of new emission-reduction technologies.

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Cap-and-trade – price volatility
Cap and trade would impose heavy costs and deter innovation - carbon taxes stabilize price and sheild heavy costs on the economy. LA Times, "Time to tax carbon" May 28, 2007
Cap-and-trade would also have a nasty effect on consumers' power bills. Say there's a very hot summer week in California. Utilities would have to shovel more coal to produce more juice, causing their emissions to rise sharply. To offset the carbon, they would have to buy more credits, and the heavy demand would cause credit prices to skyrocket. The utilities would then pass those costs on to their customers, meaning that power bills might vary sharply from one month to the next. That kind of price volatility, which has been endemic to both the American and European cap-and-trade systems, doesn't just hurt consumers. It actually discourages innovation, because in times when power demand is low, power costs are low, and there is little incentive to come up with cleaner technologies. Entrepreneurs and venture capitalists prefer stable prices so they can calculate whether they can make enough money by building a solar-powered mousetrap to make up for the cost of producing it. Carbon taxes avoid all that. A carbon tax simply imposes a tax for polluting based on the amount emitted, thus encouraging polluters to clean up and entrepreneurs to come up with alternatives. The tax is constant and predictable. It doesn't require the creation of a new energy trading market, and it can be collected by existing state and federal agencies. It's straightforward and much harder to manipulate by special interests than the politicized process of allocating carbon credits. And it could be structured to be far less harmful to power consumers. While all the added costs under cap-and-trade go to companies, utilities and traders, the added costs under a carbon tax would go to the government — which could use the revenues to offset other taxes. So while consumers would pay more for energy, they might pay less income tax, or some other tax. That could greatly cushion the overall economic effect.

Cap-and-trade = no predictability for business. Progressive Nation, "Curb Your Enthusiasm for Curbing Carbon with Cap-and-Trade" April 23, 2007
From a bureaucratic point of view, a cap-and-trade program is quite complicated and involves many steps that can go wrong. The experience in Europe highlights one of the most potentially damaging. Europe began in carbon cap-and-trade market in 2006, but the price of carbon plummeted by 90% when it was discovered that too many emission credits had been given out. The complicated allotment procedure that the interests of utilities must not corrupt makes problems likely. Even this hurdle is overcome and credits are given out or sold properly, the price can vary substantially due to a number of factors such as unusual weather patterns or an emissions cap that is too generous or stringent. Due to this possibility of price volatility and the difficultly of predicting future carbon prices, utilities do not have a clear price signal that will indicate to them whether to reduce emissions. Reducing carbon emissions at the source requires large capital investments through a variety of mechanisms such as extensive efficiency retrofitting, building a new plant, installing renewable energy, or investing in minimally-tested carbon sequestration. A variable price that may trend downward over time will make utilities wary of making any of these sizable investments needed to reduce emissions. Advocates of cap-and-trade often point to the example of sulfur dioxide emissions, which were substantially reduced by a domestic cap-and-trade program, but achieving that target does not require new plants, just installation of relatively simple pollution control devices or the use of low-sulfur coal.

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Cap-and-trade – price volatility
Anxiety of meeting the cap or hooking into an international cap crushes energy investors. Progressive Nation, "Curb Your Enthusiasm for Curbing Carbon with Cap-and-Trade" April 23, 2007
Yet what possibly should make its new - and often conservative - advocates the most worried is the level of government involvement that accompanies cap-and-trade. Emission targets are extremely contentious, and after every few years, there likely will be significant wrangling. The confusion about what will happen after the Kyoto Protocol runs out in 2012 is an obvious example of this problem. But even if targets do exist in the distant future, what happens if an early

target is not met? What if new technology becomes cheaper? What if a global cap-and-trade program is established? All these variables will cause government to reassess its target. The large number and influence of
firms and interests that care deeply about carbon emissions ensure that each of these retargeting sessions will be extremely contentious and drawn-out. These sessions will cause further uncertainty among utilities, renewable energy entrepreneurs, and investors. Carbon tax solves the clarity issues that threaten prevention of global warming and energy investors. Progressive Nation, "Curb Your Enthusiasm for Curbing Carbon with Cap-and-Trade" April 23, 2007 These problems highlight key ironies. Although

a cap-and-trade program is often called "market-based," it is extremely sensitive to the whims of the government and special interests. It makes perfect sense describe it as big government with a market face. Likewise, utilities say that a national program will reduce regulatory uncertainty, but only when compared with no national program at all. On the other hand, instituting a flat carbon price on carbon equivalent emissions is simple, effective, and unobtrusive. Power plant emissions must be properly monitored, but small discrepancies will not destroy the program. An inaccurate reading by a few percent will result in a small percentage tax loss to the government, not a 90% decrease in price that makes the program useless. Additionally, businesses face a clear price target. They can easily incorporate the price into their business models and make a rational decision to cut emissions. Alternative energies also know exactly what price they must meet to become competitive, the only variable being the price of the underlying fuel source. With hundreds of years of coal deposits in the United
States, long-term coal prices should stay relatively stable. Finally, once the government sets the price, it does not need to make any more difficult policy choices. The market takes over. The government may need to get involved to change the price in the long-run, but setting a good initial price that recognizes the cost of installing new technology and the price differential between coal and renewables should mitigate this potential intervention. Some are concerned that a carbon price will raise their tax bills by an equivalent amount, but consumers can have their payroll and/or income taxes slashed by a figure roughly equal to that of the new tax. They will still want the cheapest possible price, and businesses are still out to make the biggest profit possible. A carbon price will allow the cheapest electricity to flow from cleaner sources. Thus, the utilities and businesses are advocating the policy counter their general philosophical leanings and best interest. While a cap-and-trade program is bureaucratically complex

and does not allow for rational business decisions, a carbon price only requires a small government entity to administer, does not necessarily raise taxes overall, and provides a stable basis for future cost projections. Democrats who support this carbon price can therefore argue to the right of conservatives, save for those who believe
only voluntary emission reduction programs are warranted. A carbon price corresponds with many of the hyphenated phrases they love as it is a "small-government" and "business-friendly" solution when compared with a cap-and-trade program. Additionally, it better captures the "entrepreneurial spirit" of Americans wanting to create energy-efficient and renewable energy technology. A price on carbon makes sense - global warming imposes a cost on societies around the world, and it should not be costless to emit it. Yet opponents are sure to emphasize that it can be described using the naughty word "tax." Yet with carbon, it's certain which option is naughty and which one nice.

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Cap-and-trade – price volatility
Carbon tax is the only way to make the consumer responsible while maintaining price stability. Keith Crane, senior economist and James Bartis is a senior policy researcher at the RAND Corporation, a nonprofit research organization, November 29, 2007
The only effective way to begin reducing greenhouse gas emissions and slow global climate change is to make it more expensive to emit carbon dioxide. Unless businesses and consumers pay a price for carbon dioxide, neither will make the investments in technology and changes in energy use needed to dramatically reduce emissions. Most of the climate change legislation currently before Congress proposes a complicated "cap-and-trade" system. This would set a limit on emissions below current levels and then allocate permits to pollute that could be bought and sold. The alternative would be to impose a direct tax on carbon dioxide emissions. In either case -- tax or trade -- electricity and gasoline prices would rise. A tax of $30 per ton -- a level MIT suggests would make clean coal technologies an attractive investment to power companies -- would raise gasoline prices by 35 cents per gallon and household electricity bills by 20 to 30 percent. Under cap and trade, prices would have to rise by the same amount to get the same result. The attraction of cap and trade for its supporters is that the cap sets a limit on emissions of carbon dioxide. But it's difficult to get the limit right. The cap may be set too high to induce firms to make the large investments needed to reduce emissions. Or it may be set so low that costs skyrocket and political support to combat climate change falters. The major disadvantage to cap and trade is that the price tag for reaching the target is highly uncertain. In contrast, a tax on emissions provides businesses and consumers with certainty about costs, while leaving the size of the reduction less certain. After the failed attempt to pass the Clinton administration's 1993 proposal to tax energy, energy taxes have become a highly partisan issue, and Congress has shunned the mere mention of a carbon dioxide tax ever since. But times have changed. For compelling environmental and economic reasons, it's high time to put a tax back on the table. Putting a price on carbon dioxide creates winners and losers. All of the cap and trade bills before Congress would award permits to energy companies. But any cap on energy use will cause fuel prices to rise. So consumers will pay for this through higher prices for electricity and gasoline. Instead, we suggest a tax on carbon dioxide in which all the proceeds collected by the government would be returned to Americans each year when they file income taxes. In contrast to current congressional proposals for cap and trade, a tax on carbon dioxide refunded directly to individuals would cut emissions while cushioning the impact on the pocketbooks of American families. For example, a $30 tax that reduces emissions by 20 percent would provide a refund of about $500 for every American: a family of four would get back $2,000. A carbon dioxide tax with refund is fair because the people responsible for the most emissions would pay the most. The tax would also be progressive. Many Americans with lower incomes would find the refund would more than defray the higher costs of gasoline and electric power. A tax is simple and can be phased in quickly. It encourages individuals and businesses to make long-term decisions with confidence, rather than trying to guess what the future price of permits will be. With a tax and refund, consumers would only pay the extra costs associated with carbon abatement measures. A carbon dioxide tax with refund can be implemented easily. It can be collected at a few key links in the supply chain: refineries, power plants or pipelines. As shown by last year's refund of excess telephone taxes, the Internal Revenue Service can efficiently refund payments to all taxpayers. If passed by this Congress, taxpayers could see their first refunds in the Spring of 2009. A carbon dioxide tax can be easily adjusted as lower-cost means of reducing emissions are tapped and new technologies become available to tackle more difficult sources. The tax could be started low, but with a clear schedule of increases so that individuals, local governments and businesses will begin now to make the changes and investments required to dramatically reduce emissions within 15 years. Partial refunds could be targeted to U.S. producers in industries like petrochemicals, steel and aluminum so that they remain competitive with imports, while pushing them to invest in reducing emissions. These targeted refunds would prevent highly polluting foreign plants from destroying efficient energy-intensive industries in the United States. U.S. consumers and industry need to reduce carbon dioxide emissions. A refunded carbon dioxide tax is the best way to achieve reductions. It is simple, good for the planet, and imposes the least additional costs on the American economy as compared to any other policy alternative. Most importantly it can be crafted to ease the burden on families and protect industries from unfair competition in the global marketplace.

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Cap-and-trade – price volatility
S02 permits prove price volatility. Kenneth P. Green, resident scholar, Steven F. Hayward, F. K. Weyerhaeuser Fellow, and Kevin A. Hassett, senior fellow and director of economic policy studies at AEI, American Enterprise Institute, "Climate Change: Caps vs. Taxes" June 2007
There are a number of emissions-trading success stories that, upon inspection, suggest significant limitations to the applicability of emissions trading for GHG emissions. Enthusiasts for cap-and-trade point first to our sulfur dioxide (SO2) trading experience under the 1990 Clean Air Act Amendments. It is claimed that the costs of SO2 abatement through trading turned out to be dramatically lower than economists had forecast for a prescriptive regime, wherein the Environmental Protection Agency (EPA) would have mandated control technologies on individual coal-fired power plants. But a closer look shows

this success to have been uneven. There has been significant volatility in emission permit prices, ranging from a low of $66 per ton in 1997 to $860 per ton in 2006, as the overall emissions cap has been tightened, with the price moving up and down as much as 43 percent in a year.[1] Over the last three years, SO2 permit prices have risen 80 percent a year, despite the EPA's authority to auction additional permits as a
"safety valve" to smooth out this severe price volatility.

Price volatility affects business investment and consumption. Kenneth P. Green, resident scholar, Steven F. Hayward, F. K. Weyerhaeuser Fellow, and Kevin A. Hassett, senior fellow and director of economic policy studies at AEI, American Enterprise Institute, "Climate Change: Caps vs. Taxes" June 2007
The favored solution to these problems is to over-allocate the number of initial permits both to ease the cost and to encourage the rapid start-up of a market for trades. This was the course the European Union took with its Emissions Trading System (ETS), and it has very nearly led to the collapse of the system. Because emissions permits were over-allocated, the price of emissions permits plummeted, and little--if any--emissions reductions have taken place because of the ETS. The over-allocation of initial permits merely postpones both emissions cuts and the economic pain involved. Economist Robert J. Shapiro notes: As a result of all of these factors and deficiencies, the ETS is failing to reduce European CO2 emissions. . . . [T]he European Environmental Agency has projected that the EU is likely to achieve no more than one-quarter of its Kyoto-targeted reductions by 2012, and much of those "reductions" will simply reflect credits purchased from Russia or non-Annex-I countries [developing countries], with no net environmental benefits.[3] As economist William Nordhaus observes: We have preliminary indications that European trading prices for CO2 are highly volatile, fluctuating in a band and [changing] +/- 50 percent over the last year. More extensive evidence comes from the history of the U.S. sulfur-emissions trading program. SO2 trading prices have varied from a low of $70 per ton in 1996 to $1500 per ton in late 2005. SO2 allowances have a monthly volatility of 10 percent and an annual volatility of 43 percent over the last decade.[4] Nordhaus points out the ramifications of such volatility, observing that "[s]uch rapid fluctuations would be extremely undesirable,

particularly for an input (carbon) whose aggregate costs might be as great as petroleum in the coming decades," and that "experience suggests that a regime of strict quantity limits might become extremely unpopular with market participants and economic policymakers if carbon price variability caused significant changes in inflation rates, energy prices, and import and export values."[5] Nordhaus is not alone in this concern about price volatility. Shapiro similarly observes: Under a cap-and-trade program strict enough to affect climate change, this increased volatility in all energy prices will affect business investment and consumption, especially in major CO2 producing economies such as the United States, Germany, Britain, China and other major developing countries.[6]

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Cap-and-trade ↓ competitiveness
International regimes kill US competitiveness. Kenneth P. Green, resident scholar, Steven F. Hayward, F. K. Weyerhaeuser Fellow, and Kevin A. Hassett, senior fellow and director of economic policy studies at AEI, American Enterprise Institute, "Climate Change: Caps vs. Taxes" June 2007
It is possible that the defects of previous emissions-trading programs could be overcome with more careful design and extended to an international level, though this would require an extraordinary feat of diplomacy and substantial refinements of international law. Even if such improvement could be accomplished, it would not provide assurance against the prospect that the cost of such a system might erode the competitiveness of the U.S. economy against developing nations that do not join the system. The second reason for skepticism about global emissions trading is that it fails the "no
There are two final, overriding reasons to be doubtful about global emissions trading. regrets" test. It is considered bad form nowadays to express doubt or skepticism about the scientific case for rapid and dangerous global warming in the twenty-first century. If warming is either less pronounced than some current forecasts predict or if emissions reductions have limited effect in moderating future temperature rise, however, a severe global emissions-reduction policy through emissions trading (on the order of a minimum 50 percent cut by 2050) could turn out to be the costliest public policy mistake in human history, with the costs vastly exceeding the benefits.

That’s key to leadership. Zalmay Khalilzad, director of the Strategy and Doctrine Program @ RAND & current US Ambassador
to Afghanistan "Losing the Moment? The United States and the World After the Cold War," Washington Quarterly, Spring 1995 lexis The United States is unlikely to preserve its military and technological dominance if the U.S. economy declines seriously. In such an environment, the domestic economic and political base for global leadership would diminish and the United States would probably incrementally withdraw from the world, become inward-looking, and abandon more and more of its external interests. As the United States weakened, others would try to fill the Vacuum. To sustain and improve its economic strength, the United States must maintain its technological lead in the economic realm. Its success will depend on the choices it makes. In the past, developments such as the agricultural and industrial revolutions
produced fundamental changes positively affecting the relative position of those who were able to take advantage of them and negatively affecting those who did not. Some argue that the world may be at the beginning of another such transformation, which will shift the sources of wealth and the relative position of classes and nations. If the United States fails to recognize the

change and adapt its institutions, its relative position will necessarily worsen.

US leadership prevents global nuclear war. Zalmay Khalilzad, director of the Strategy and Doctrine Program @ RAND & current US Ambassador
to Afghanistan "Losing the Moment? The United States and the World After the Cold War," Washington Quarterly, Spring 1995 lexis
Under the third option, the United States would seek to retain global leadership and to preclude the rise of a global rival or a return to multipolarity for the indefinite future. On balance, this is the best long-term guiding principle and vision. Such a vision is desirable not as an end in itself, but because a world in which the United States exercises leadership would have tremendous advantages. First, the global environment would be more open and more receptive to American values -- democracy, free markets, and the rule of law. Second, such a world would have a better chance of dealing cooperatively with the world's major problems, such as nuclear proliferation, threats of regional hegemony by renegade states, and low-level conflicts. Finally, U.S. leadership would help preclude the rise of another hostile global rival, enabling the United States and the world to avoid another global cold or hot war and all the attendant dangers, including a global nuclear exchange. U.S. leadership would therefore be more conducive to global stability than a bipolar or a

multipolar balance of power system.

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Cap-and-trade - wealth transfer
International cap/trade would be a massive transfer, entrenching elites in Russia, Iran, Burma, North Korea
http://www.economics.harvard.edu/faculty/cooper/files/Kyoto_ct.pdf Alternatives to Kyoto: the Case for a Carbon Tax Richard N. Cooper Harvard University 2006 The proposal envisages international trade in emission rights, something necessary in the KP framework to minimize the economic costs of any given degree of reduction in emissions. But international trading entails potentially large transfers between law-abiding citizens in rich countries such as the USA, Canada, Europe, and Japan to corrupt officials and their favored oligarchs in countries less meticulous about the rule of law – or directly to the governments of such countries. These transfers would not be conditioned on anything beyond willingness to sell emissions rights that had been internationally agreed. The bottom line is that American and European citizens would be making unconditional transfers to Russia, Iran, eventually (although not immediately in the next round) to Burma and North Korea. I would not want to have to defend such a proposal before the US Senate, whose assent would be required for ratification, or indeed before the German Bundestag. It is indefensible. I am aware that some advocates see large transfers from rich to poor countries as a positive advantage of a KP-type trading regime, partly to draw poorer countries into the emission-control regime, partly because it involves redistribution from rich to poor. But if we have learned anything about unconditional or lightly conditioned transfers from rich to poorer countries during the past four decades, it is that they too rarely foster economic development, and they often enrich the powerful and the already rich in poorer countries.

Carbon tax reduces emissions more than cap & trade given an open society while avoiding wealth transfers
http://www.economics.harvard.edu/faculty/cooper/files/Kyoto_ct.pdf Alternatives to Kyoto: the Case for a Carbon Tax Richard N. Cooper Harvard University 2006 This strategy of concealing or seriously downplaying an important consequence of proposed actions will not work in open societies where skepticism of government claims has grown significantly. A strategy more likely to be successful is to acknowledge that carboniferous energy needs to become more expensive, and to accomplish the required increase in prices with an internationally agreed tax, revenues to accrue to each tax-levying country, to avoid the issue of large unconditional transfers among countries. Many countries would welcome the additional revenue; countries where this is not the case could use the revenues to lower other taxes. This proposal – an alternative to Michaelowa’s -- is discussed in more detail in the following section. It is not assured of success. But in my judgement it has a better chance of actually reducing greenhouse gas emissions than does the proposal in Michaelowa’s paper.

Money transfer used to hire weapons scientists in Russia Weinberger (Sharon, writer for Wired Magazine, “Report: U.S. Money Helps Recruit Weapons Scientists in Russia, Ukraine”, 01/14/08, online: http://blog.wired.com/defense/2008/01/report-usmoney.html, acc: 06/26/08) If you're worried about nuclear terrorism, it makes sense, at face value, to support nonproliferation programs, particularly those that target the former Soviet Union. The problem, however, is that money can't always buy you security. Nothing illustrates this dilemma better than a new report by the Government Accountability Office. The GAO says that no only does the Department of Energy overstate success in one of its key nonproliferation programs, but perhaps even more troubling, U.S. funding, intended to ensure that Soviet-era weapons scientists don't end up working for rogue states, is actually being used to recruit young scientists to work at weapons facilities. There's another issue here, of course. Russia, right now, is flush with money from oil and natural gas exports, raising the issue of why, over 15 years after the collapse of the Soviet Union, Moscow can't find the money to support and secure its own WMD infrastructure.

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Cap-and-trade - wealth transfer
Carbon Taxes better than Cap-Trade: Wealth Transfers and global model N. Gregory Mankiw 9/16/2007 “One Answer to Global Warming: A New Tax” N. Gregory Mankiw is a
professor of economics at Harvard. He was an adviser to President Bush and is advising Mitt Romney, the former governor of Massachusetts, in the campaign for the Republican presidential nomination. http://www.nytimes.com/2007/09/16/business/16view.html?_r=1&oref=slogin&adxnnlx=1190034206IfyuBBCsva2ji8jr7yiItg&pagewanted=all Date Accessed: 6/23/2008 Another popular proposal to limit carbon emissions is a cap-and-trade system, under which carbon emissions are limited and allowances are bought and sold in the marketplace. The effect of such a system depends on how the carbon allowances are allocated. If the government auctions them off, then the price of a carbon allowance is effectively a carbon tax. But the history of cap-and-trade systems suggests that the allowances would probably be handed out to power companies and other carbon emitters, which would then be free to use them or sell them at market prices. In this case, the prices of energy products would rise as they would under a carbon tax, but the government would collect no revenue to reduce other taxes and compensate consumers. The international dimension of the problem also suggests the superiority of a carbon tax over cap-and-trade. Any long-term approach to global climate change will have to deal with the emerging economies of China and India. By some reports, China is now the world’s leading emitter of carbon, in large part simply because it has so many people. The failure of the Kyoto treaty to include these emerging economies is one reason that, in 1997, the United States Senate passed a resolution rejecting the Kyoto approach by a vote of 95 to zero. Agreement on a truly global cap-andtrade system, however, is hard to imagine. China is unlikely to be persuaded to accept fewer carbon allowances per person than the United States. Using a historical baseline to allocate allowances, as is often proposed, would reward the United States for having been a leading cause of the problem. But allocating carbon allowances based on population alone would create a system in which the United States, with its higher standard of living, would buy allowances from China. American voters are not going to embrace a system of higher energy prices, coupled with a large transfer of national income to the Chinese. It would amount to a massive foreign aid program to one of the world’s most rapidly growing economies. A global carbon tax would be easier to negotiate. All governments require revenue for public purposes. The world’s nations could agree to use a carbon tax as one instrument to raise some of that revenue. No money needs to change hands across national borders. Each government could keep the revenue from its tax and use it to finance spending or whatever form of tax relief it considered best. Convincing China of the virtues of a carbon tax, however, may prove to be the easy part. The first and more difficult step is to convince American voters, and therefore political consultants, that “tax” is not a four-letter word.

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Carbon tax solvency > Cap-and-trade
Carbon tax best - protect the economy and more enforceable. Kenneth P. Green, resident scholar, Steven F. Hayward, F. K. Weyerhaeuser Fellow, and Kevin A. Hassett, senior fellow and director of economic policy studies at AEI, American Enterprise Institute, "Climate Change: Caps vs. Taxes" June 2007
A program of carbon-centered tax reform, by contrast, lacks most of the negative attributes of cap-andtrade, and could convey significant benefits unrelated to GHG reductions or avoidance of potential climate harms, making this a no-regrets policy. A tax swap would create economy-wide incentives for energy efficiency and lower-carbon energy, and by raising the price of energy would also reduce energy use. At the same time, revenues generated would allow the mitigation of the economic impact of higher energy prices, both on the general economy and on the lower-income earners who might be disproportionately affected by such a change. Carbon taxes would be more difficult to avoid, and existing institutions quite adept at tax collection could step up immediately. Revenues would remain in-country, removing international incentives for cheating or insincere participation in carbon-reduction programs. Most of these effects would remain beneficial even if science should determine that reducing GHG emissions has only a negligible effect on mitigating global warming. A modest carbon tax of $15 per ton of CO2 emitted would result in an 11 percent decline in CO2 emissions, while raising non-coal-based energy forms modestly. Coal-based energy prices would be affected more strongly, which is to be expected in any plan genuinely intended to reduce GHG emissions. A number of pos-sible mechanisms are available to refund the revenues raised by this tax. On net, these tools could significantly reduce the economic costs of the tax and quite possibly provide economic benefits. For these reasons, we conclude that if aggressive actions are to be taken to control GHG emissions, carbon-centered tax reform--not GHG emission trading--is the superior policy option.

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Carbon tax solvency > Cap-and-trade
Unlike a cap-and-trade program, carbon taxes would address CO2 reductions immediately. Michael J. Zimmer, attorney at Thompson Hine LLP in the energy practice and also serves this academic
year with the Ohio University Consortium of Energy, Economics and the Environment, Sustainable Development Law & Policy, Winter 2008 lexis A carbon tax can be implemented much more quickly than a cap-and-trade program. This factor is critical to the effectiveness of any CO[2] emissions reduction policy because time is of the essence from a scientific performance basis. n10 So far, cap-and-trade has proven to be unsuccessful in reducing carbon emissions in the European Union and other global markets. n11 Although a cap-and-trade system has been extremely successful in the United States for reducing SO[2] emissions in the past decade, the SO[2] model is not dispositive for carbon. A carbon cap-and-trade program will have to be designed one hundred times larger in scale than its SO[2] counterpart, which creates an enormous problem of scale, complexity, administration, and cost of compliance for cross-border purposes. In a comparable example, the success of the U.S. acid rain program required solid data collection and transparent verification combined with the use of continuous emissions monitoring technology. Readily available technology does not currently exist for filtering or capturing CO[2]. Carbon storage or sequestration will likely take another decade to become cost effective and will create operational de-rating of ten to thirty percent, water supply demands, fuels shifting, and higher operating costs to succeed. Cap-and-trade systems are also complex and difficult to design. Issues concerning the proper level of the cap, timing, allowance allocations, pre-emption, certification procedures, standards for use of offsets, penalties and regional conflicts must all be addressed before the system can be implemented. n12 These issues require complex operational and political considerations that surely would hinder any timely solution to regulating U.S. CO[2] emissions. Further, while this design and implementation process is taking place, polluters are free to continue unchecked while uncertainty reigns for another decade. A cap-and-trade approach for CO[2] will not be as effective as a carbon tax in the [*69] short term because it will lag behind the needs of the marketplace, scientific inquiry, and global policy making. It would not offer transparency, nor a clear stable price signal to support capital investment and new investment decision-making until 2020.

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Carbon tax solvency > Cap-and-trade
Carbon Tax is more effective: harder to manipulate, accounts for externality, revenue by Todd Woody, journalist, 02/14/07,
http://blogs.business2.com/greenwombat/2007/02/report_carbon_t.html, 06/23/08 A former Clinton administration commerce department official today released a report arguing that a global tax on companies' greenhouse house gas emissions is a more efficient way to combat global warming than the carbon trading markets endorsed by a host of government officials and corporations like Alcoa (AA), BP, (BP), DuPont (DD), Duke Energy (DUK) and General Electric (GE). "A carbon tax would both directly reduce greenhouse gas emissions and provide powerful incentives for technological progress," wrote Robert J. Shapiro, a Washington D.C. consultant, veteran think tanker and former under secretary of commerce for economic affairs. "Carbon taxes also should provide greater incentives for companies to develop new, environmentally-friendly, technologies or abatement strategies than a capand-trade program." Shapiro's study was released by the American Consumer Institute, a free-market oriented Washington group. Corporations currently are not charged for the economic and environmental impacts of their greenhouse gas emissions, though those "externalities" affect everyone. Under a carbon tax, those consequences would be calculated and a tax imposed accordingly. "Since every government needs revenues, the challenge is to design taxes so they distort those relative prices as little as possible. One possibility is to make the base of the tax as broad as possible, so its rate can be low and most people and activities are affected equally," Shapiro wrote. "Carbon taxes generally meet this criterion, although not as well as broad income or consumption taxes. However, their economic drawback of raising the price of carbon-intensive products and operations, relative to those which are not carbon-intensive, is also their environmental purpose." Companies that do not emit greenhouse gases - such as solar and wind producers - or sell greener goods and services - would benefit. The government could use carbon tax revenue to support renewable energy technologies, cut corporate taxes or increase health spending, according to Shapiro. In contrast, cap-and-trade programs impose a ceiling on greenhouse gas emissions and then allow companies that lower their emissions to sell carbon allowances to those that do not. Europe created a carbon trading market to implement the Kyoto Accord and legislation before the U.S. Congress calls for a similar market in the U.S. Shapiro contends that global carbon trading is too complex and susceptible to market manipulation by shady companies and corrupt governments. While Shapiro says a carbon tax would be cheaper and easier to implement, he acknowledged the challenges in getting governments and corporations to agree on what specifically will be taxed and the tax rate.

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Carbon tax solvency > Cap-and-trade
Carbon Tax avoids Cap/Trade’s disincentives to economic investment and growth Mintz, in June 3, 2008 The Better Option (Lexis, Acc 6/23/08)
The approach, also touted in the Lieberman-Warner bill introduced in the U. S. Congress last week, requires companies to bid for carbon credits made available by those companies that are able to produce fewer emissions than permitted. The advantage of a cap-and-trade system is that it provides certainty in reaching targeted reductions by big emitters. The disadvantage of cap-and-trade is that carbon prices will vary from year to year depending on both demand and supply conditions for carbon credits. Many businesses fear that such price uncertainty makes it much more difficult to plan costly long-term investments. To reduce these risks, cap-and-trade proposals often include maximum and minimum prices.The burden of cap-and-trade systems unfairly falls on big emitters who are political targets for politicians looking to avoid voter backlash. It doesn't take a genius to figure out, however, that the cost of carbon permits will be shifted forward onto other businesses and consumers. A cap-and-trade system therefore misallocates resources from efficient producers to other sectors of the economy. Carbon taxation has three advantages over cap-and-trade. As prices, carbon tax rates are set with some certainty, making it easier for business to plan investments. The taxes are also applied comprehensively and are therefore more efficient. As a new revenue source, carbon taxes reduce other harmful taxes in the economy, especially taxes on investment, saving and work effort.

Carbon tax avoids several shortcomings of cap and trade Richard J. Pierce, Jr (Professor of Law, George Washington University) Summer 2007 "ENERGY
INDEPENDENCE AND GLOBAL WARMING' Environmental Law (Lexis-Nexis) Nordhaus has argued persuasively that a globally-coordinated carbon tax is far more promising than a global cap and trade system. n33 Nordhaus anticipates several serious problems with any global cap and trade program. Such a program would require nations to make coordinated decisions about emissions baselines that would be difficult or impossible to make. n34 It would create so much uncertainty about the future prices of emissions permits that trade in permits would be severely impaired. n35 A global cap and trade system would also produce highly volatile energy prices and be characterized by transactions costs [*601] so high they would impair its efficacy. n36 Finally, Nordhaus fears a global cap and trade system would be plagued by pervasive corruption. n37 All of those problems can be avoided by implementing instead a globally-coordinated carbon tax.

Global politics make cap & trade political unsustainable
http://www.economics.harvard.edu/faculty/cooper/files/Kyoto_ct.pdf Alternatives to Kyoto: the Case for a Carbon Tax Richard N. Cooper Harvard University 2006 There are negative and positive arguments for introducing a tax on emissions of greenhouse gases (GHGs). The negative argument is that the leading alternative, quantitative goals with a trading regime in emission rights, is almost certainly politically unsustainable on a global basis. Key developing countries must be seriously involved in any effective effort to reduce GHG emissions. On US Department of Energy projections, for instance, China's CO2 emissions will reach those of Europe before 2010 and those of the United States by 2035. Emissions from India, Brazil, and others are also significant and growing rapidly. Yet it is difficult to imagine a set of effective national quantitative targets that China and the USA could both agree on, to take only the leading emitters among rich and poor countries.

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Carbon tax solvency > Cap-and-trade
A carbon tax is superior to a carbon cap-and-trade system. Carbontax.org, May 23, 2008; http://www.carbontax.org/introduction/#cap-and-trade 6/24/08
We regard a carbon tax as superior to a carbon cap-and-trade system, for five fundamental reasons: Carbon taxes will lend predictability to energy prices, whereas cap-and-trade systems will do little to mitigate the price volatility that historically has discouraged investments in less carbon-intensive electricity generation, carbon-reducing energy efficiency and carbon-replacing renewable energy. Carbon taxes can be implemented much sooner than complex cap-and-trade systems. Because of the urgency of the climate crisis, we do not have the luxury of waiting while the myriad details of a cap-and-trade system are resolved through lengthy negotiations. Carbon taxes are transparent and easily understandable, making them more likely to elicit the necessary public support than an opaque and difficult to understand cap-and-trade system. Carbon taxes can be implemented with far less opportunity for manipulation by special interests, while a cap-and-trade system’s complexity opens it to exploitation by special interests and perverse incentives that can undermine public confidence and undercut its effectiveness. Carbon tax revenues can be rebated to the public through dividends or tax-shifting, while the costs of cap-and-trade systems are likely to become a hidden tax as dollars flow to market participants, lawyers and consultants.

Consensus says carbon tax is cheaper and more effective than cap and trade Brian Hansen February 19, 2007 "Carbon tax called more effective option than cap-trade for addressing
warming" Inside Energy with Federal Lands, Pg. 12 The U.S. government should enact a simple carbon tax instead of a complex cap-and-trade scheme if it wants to tackle the problem of global warming, a noted economist said last week. Robert Shapiro, cofounder and chairman of Sonecon, a Washington-based consulting firm, said a carbon tax would reduce greenhouse gas emissions more effectively than a cap-and-trade program, and with fewer administrative and economic side effects. "There is a general consensus among economists that a carbon tax would be more environmentally effective and economically efficient than a cap-and-trade program," Shapiro told reporters Wednesday in a conference call announcing a new study he wrote on the subject. He prepared the study for the American Consumer Institute, a Washington think tank and advocacy group.

Upstream carbon tax avoids volatility leading to energy price skyrocketing Brian Hansen February 19, 2007 "Carbon tax called more effective option than cap-trade for addressing
warming" Inside Energy with Federal Lands, Pg. 12 Shapiro, who served as an economic advisor in the Clinton administration, conceded that either approach would raise energy prices. But the cap-and-trade approach suffers from several serious "structural problems" that do not affect carbon taxes, he said. For example, cap-and-trade programs are much more economically "volatile" than carbon taxes, meaning they are more likely to send energy prices skyrocketing when cold weather or other temporary factors influence consumer demand, Shapiro said. Cap-and-trade programs are also much more difficult to run from an administrative standpoint, because the government has to devise a fair way to allocate the emissions allowances, and then keep track of the trading, Shapiro said. "There are large opportunities for cheating and evasion," he said. A carbon tax, by contrast, would impose a "known and certain additional cost" on U.S. energy usage, Shapiro said. Shapiro did not advocate a particular carbon-tax price-point in his study, but he did model how his approach would work using price points ranging from $20 per ton up to $60 per ton of emissions. He said the tax would be levied on "upstream" energy sources such as coal mines, as opposed to "downstream" sources such as power plants.

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Carbon tax solvency > Cap-and-trade
Carbon Taxes are more effective than a cap-and-trade program and act as a consistent incentive to seek advancement in other alternative energies Daniel Rosenblum, Congressional Budget Office Confirms Superiority of Carbon Taxes, 02/13/2008,(
http://www.carbontax.org/blogarchives/2008/02/13/congressional-budget-office-confirms-superiority-ofcarbon-taxes/ date acc. 6/24/08) In its just released Policy Options for Reducing CO2 Emissions, the non-partisan Congressional Budget Office confirms the superiority of carbon taxes over various types of cap-and-trade schemes. The CBO concludes that: A tax on emissions would be the most efficient incentive-based option for reducing emissions and could be relatively easy to implement. If it was coordinated among major emitting countries, it would help minimize the cost of achieving a global target for emissions by providing consistent incentives for reducing emissions around the world. If other major nations used cap-and-trade programs rather than taxes on emissions, a U.S. tax could still provide roughly comparable incentives for emission reductions if the tax rate each year was set to equal the expected price of allowances under those programs. Responding to interest in cap-and-trade programs, the CBO study "explores ways in which policymakers could preserve the structure of a cap-and-trade program but achieve some of the efficiency advantages of a tax." In other words, the CBO recognizes that a carbon tax is the "gold standard" and then tries to figure out how to reduce the disadvantages of cap-and-trade. If Congress in its wisdom decides to approve a cap-and-trade program, it should make that program as similar as possible to the carbon tax "gold standard." But why settle for second best?

Only Carbon tax solves – internalization is critical Daniel Rosenblum, Carbon Tax, not “Peak Oil,” Can Save Climate, 03/5/2007
(http://www.carbontax.org/blogarchives/2007/03/05/carbon-tax-not-peak-oil-can-save-climate-2/ date acc. 6/24/08) The Times article closes by quoting a Chevron engineer: "… peak oil is a moving target [and the supply of] oil is always a function of price and technology." True enough. Our task is to make the use of oil, coal and gas a function of a climate-aware price and technology. At present, the fuel prices that determine the demand side of the equation include nothing for the climate damage resulting from burning those fuels, resulting in vast overuse. Moreover, those feedback mechanisms I mentioned in my 2005 talk invariably overshoot the mark, resulting in the kind of wild price swings that Yergin described. These fluctuations drown out underlying movements toward higher prices, frustrating investment in low-carbon alternatives on both the demand and supply sides. What to do? A tax on carbon fuels will internalize the costs of carbon damage and make manifest today the long-term trajectory of rising carbon-fuel prices. No other policy option — not cap-and-trade, not fuel efficiency standards, not subsidies for renewables — can do that.

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Carbon tax solvency > Cap-and-trade
Carbon Tax avoids volatility, which threatens alt energy investment and risks market manipulation Los Angeles Times May 28, 2007 Time to tax carbon http://www.latimes.com/news/opinion/la-edcarbontax28may28,0,2888366.story accessed June 23, 2008 And yet for all its benefits, cap-and-trade still isn't the most effective or efficient approach. That distinction goes to Method No. 3: a carbon tax. While cap-and-trade creates opportunities for cheating, leads to unpredictable fluctuations in energy prices and does nothing to offset high power costs for consumers, carbon taxes can be structured to sidestep all those problems while providing a more reliable market incentive to produce clean-energy technology. To understand the drawbacks of cap-and-trade, one has to look not only at the successful U.S. acid rain program but the failed European Emissions Trading Scheme, the first phase of which started in January 2005. European Union members each developed emissions goals, then passed out credits to polluters. Yet for a variety of reasons, the initial cap was set so high that the polluters fell under it without making any reductions at all. The Europeans are working to improve the scheme in the next phase, but their chances of success aren't good. One reason is the power of lobbyists. In Europe, as in the U.S., special interests have a way of warping the political process so that, for example, a corporation generous with its campaign contributions might win an excessive number of credits. It's also very easy in many European countries to cheat; because there aren't strong agencies to monitor and verify emissions, companies or utilities can pretend they're cleaner than they are. The latter problem might be avoided in the U.S. by beefing up the Environmental Protection Agency. But there's reason to suspect that many of the corporate interests pushing for a federal cap-and-trade program are hoping for a seat at the table when credits are passed out, and they will doubtless fudge numbers to maximize their credits; some companies stand to make a great deal of money under a trading system. Also hoping to profit, honestly or not, would be carbon traders. Large financial institutions would jump into the exchange to collect commissions on carbon trades, just as they do with crude oil and wheat. This presents opportunities for Enron-style market manipulation. Cap-and-trade would also have a nasty effect on consumers' power bills. Say there's a very hot summer week in California. Utilities would have to shovel more coal to produce more juice, causing their emissions to rise sharply. To offset the carbon, they would have to buy more credits, and the heavy demand would cause credit prices to skyrocket. The utilities would then pass those costs on to their customers, meaning that power bills might vary sharply from one month to the next. That kind of price volatility, which has been endemic to both the American and European cap-and-trade systems, doesn't just hurt consumers. It actually discourages innovation, because in times when power demand is low, power costs are low, and there is little incentive to come up with cleaner technologies. Entrepreneurs and venture capitalists prefer stable prices so they can calculate whether they can make enough money by building a solar-powered mousetrap to make up for the cost of producing it. Carbon taxes avoid all that. A carbon tax simply imposes a tax for polluting based on the amount emitted, thus encouraging polluters to clean up and entrepreneurs to come up with alternatives. The tax is constant and predictable. It doesn't require the creation of a new energy trading market, and it can be collected by existing state and federal agencies. It's straightforward and much harder to manipulate by special interests than the politicized process of allocating carbon credits. And it could be structured to be far less harmful to power consumers. While all the added costs under cap-and-trade go to companies, utilities and traders, the added costs under a carbon tax would go to the government — which could use the revenues to offset other taxes. So while consumers would pay more for energy, they might pay less income tax, or some other tax. That could greatly cushion the overall economic effect. There is a growing consensus among economists around the world that a carbon tax is the best way to combat global warming, and there are prominent backers across the political spectrum, from N. Gregory Mankiw, former chairman of the Bush administration's Council on Economic Advisors, and former Federal Reserve Chairman Alan Greenspan to former Vice President Al Gore and Sierra Club head Carl Pope. Yet the political consensus is going in a very different direction. European leaders are pushing hard for the United States and other countries to join their failed carbon-trading scheme, and there are no fewer than five bills before Congress that would impose a federal cap-and-trade system. On the other side, there is just one lonely bill in the House, from Rep. Pete Stark (D-Fremont), to impose a carbon tax, and it's not

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expected to go far. The obvious reason is that, for voters, taxes are radioactive, while carbon trading sounds like something that just affects utilities and big corporations.

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Carbon tax solvency > Cap-and-trade
A carbon tax would solve more efficiently than emissions trading. Anderson, Mal, June 2008 “Carbon Tax”. New Internationalist. Acc: 06/23/08
http://web.ebscohost.com/ehost/pdf?vid=1&hid=107&sid=157cb64c-52d5-4b90-ac09543664224722%40sessionmgr108 Just when 1 started to read Chris Brazier's article on aircraft emissions ('To fly or not to fly?', NI 409) came the news that our Australian coalminers are applying for free emissions permits. Unfortunately it seems that emissions trading is to be the world's accepted way of tackling global warming. There is a much simpler solution - a straight Carbon Tax. It avoids the tenuous connection of doing good things like planting trees, etc to offset (avoid) penalties. How can offsets possibly be efficiently monitored? And valued? Who pays for the monitoring? A tax is simple and transparent. Consumers will immediately see the costs of polluting and reduce their carbon footprint. And this is where it really counts. Alternative sources of energy will become much more competitive. The tax collected can be used to reduce other taxation and/or help fund alternative energy. As for the fossil-fuel industries, they've had more than ample warning and deserve no sympathy. They can either start to phase out their industry or to diversify into alternatives, preferably both.

Taxes better than cap-and-trade because of volatility Green (Richard, professor at the Institute for Energy Research and Policy at the University of Birmingham, “Carbon tax or carbon permits: the impact on generators’ risks”, March 2007, online:
ftp://ftp.bham.ac.uk/pub/RePEc/pdf/RGreen.pdf, acc: 06/24/08) The increase in prices comes from the way in which the carbon policies affect the marginal cost curve. By design, carbon trading will produce a relatively flat marginal cost curve over the industry’s fossil-fired plants, since the carbon price adjusts to bring the marginal costs of coal and gas-fired plant close together. A carbon tax does not change when one type of plant has relatively lower fuel costs, and so the marginal cost curve will tend to be steeper. The plants with lower costs, whichever they happen to be, will be at the bottom of the curve, and those with higher costs at the top. The absolute position of the marginal cost curve, however, will be more volatile with a system of carbon trading than with a carbon tax. When the gas price is low, a low carbon price will tend to keep marginal costs low, whereas the impact of a high gas price is magnified by that of a high carbon price. This effect does not occur with a carbon tax.

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Cap-and-trade – corruption
Permits encourage cheating and economic slowdown. Kenneth P. Green, resident scholar, Steven F. Hayward, F. K. Weyerhaeuser Fellow, and Kevin A. Hassett, senior fellow and director of economic policy studies at AEI, American Enterprise Institute, "Climate Change: Caps vs. Taxes" June 2007
A cap-and-trade approach to controlling GHG emissions would be highly problematic. A lack of international binding authority would render enforcement nearly impossible, while the incentives for cheating would be extremely high. The upfront costs of creating institutions to administer trading are significant and likely to produce entrenched bureaucracies that clamor for ever-tighter controls on carbon emissions. Permit holders will see value in further tightening of caps, but will resist efforts outside the cap-and-trade system that might devalue their new carbon currency. Higher energy costs resulting from trading would lead to economic slowdown, but as revenues would flow into for-profit coffers (domestically or internationally), revenues would be unavailable for offsetting either the economic slowdown or the impacts of higher energy prices on low-income earners.

Price setting for carbon taxes avoids manipulations and bureaucracy. Michael J. Zimmer, attorney at Thompson Hine LLP in the energy practice and also serves this academic
year with the Ohio University Consortium of Energy, Economics and the Environment, Sustainable Development Law & Policy, Winter 2008 lexis The protracted negotiations necessary to develop a comprehensive and politically acceptable carbon capand-trade program leave the process vulnerable to parties shaping the program to maximize narrow economic benefits, maximizing their market positions in industry sectors, or constraining competition rather than designing an economically efficient system that maximizes public gain and a competitive U.S. economy. In a cap-and-trade program, although market prices will increase, just as with a carbon tax, the reasons for the increase are hidden in a maze of new bureaucracy, regulatory impositions, and cost partnerships that render it more opaque and politically attractive. A carbon tax can be implemented with far less opportunity for manipulation. Carbon taxes are transparent and easily understandable by the public. Once the market targets for carbon are set, they can be readily adjusted according to market success or failure. However, it is this transparency and flexibility that makes a carbon tax politically undesirable because it is clear where and how society will have to take responsibility, make direct changes and improvements, and pay for the CO[2] by-products of society.

Carbon taxes would be less vulnerable to corruption. Kenneth P. Green, resident scholar, Steven F. Hayward, F. K. Weyerhaeuser Fellow, and Kevin A. Hassett,
senior fellow and director of economic policy studies at AEI, American Enterprise Institute, "Climate Change: Caps vs. Taxes" June 2007 * Less Corruption. Unlike carbon cap-and-trade initiatives, a carbon tax would create little incentive or opportunity for rent-seeking or cheating. As William Nordhaus explains: A price approach gives less room for corruption because it does not create artificial scarcities, monopolies, or rents. There are no permits transferred to countries or leaders of countries, so they cannot be sold abroad for wine or guns. . . . In fact, a carbon tax would add absolutely nothing to the instruments that countries have today.[13] Without the profit potential of amassing tradable carbon permits, industry groups would have less incentive to try to get credits for their favored but non-competitive energy sources. That is not to say that tax-based approaches are immune from corruption, for they certainly are not. If set too far down the chain of production or set unevenly among energy sources, carbon taxes could well lead to rent-seeking, political favoritism, economic distortions, and so on. Foreign governments might have an incentive to undermine a trading scheme by offering incentives to allow their manufacturers to avoid the cost of carbon trading. A tax on fuels proportionate to their carbon content, levied at the point of first sale, should be less susceptible to corruption, and by delivering revenue to the government rather than to private entities, should create incentives more aligned with the government's objective.

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Cap-and-trade – corruption
Cap and trade is vulernable to corporate manipulation. Keith Crane, senior economist and James Bartis, senior policy researcher at the RAND Corporation, a nonprofit research organization, November 29, 2007
To understand the drawbacks of cap-and-trade, one has to look not only at the successful U.S. acid rain program but the failed European Emissions Trading Scheme, the first phase of which started in January 2005. European Union members each developed emissions goals, then passed out credits to polluters. Yet for a variety of reasons, the initial cap was set so high that the polluters fell under it without making any reductions at all. The Europeans are working to improve the scheme in the next phase, but their chances of success aren't good. One reason is the power of lobbyists. In Europe, as in the U.S., special interests have a way of warping the political process so that, for example, a corporation generous with its campaign contributions might win an excessive number of credits. It's also very easy in many European countries to cheat; because there aren't strong agencies to monitor and verify emissions, companies or utilities can pretend they're cleaner than they are. The latter problem might be avoided in the U.S. by beefing up the Environmental Protection Agency. But there's reason to suspect that many of the corporate interests pushing for a federal cap-and-trade program are hoping for a seat at the table when credits are passed out, and they will doubtless fudge numbers to maximize their credits; some companies stand to make a great deal of money under a trading system. Also hoping to profit, honestly or not, would be carbon traders. Large financial institutions would jump into the exchange to collect commissions on carbon trades, just as they do with crude oil and wheat. This presents opportunities for Enron-style market manipulation.

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Competitiveness addon
Carbon tax key to maintaining US economic competitiveness. Paul Anderson, Chairman and CEO, Duke Energy, “Grabbing the Carbon Elephant” 2005
An economy-wide carbon tax is the least prescriptive policy approach as it does not mandate reductions in any one sector. Compared to other market-based approaches, such as “cap-and-trade” policies, a carbon tax provides greater certainty regarding cost impacts. A carbon tax would not mandate targeted reductions from one sector or another, but would instead send economic signals that enable businesses and individuals to make informed decisions. For this reason, many economic experts believe that a carbon tax is more efficient than a cap-and-trade policy for addressing climate change over the long-term. To be clear, adoption of a carbon tax need not increase the overall tax burden—instead, revenues from a carbon tax could support reductions in inefficient existing taxes on productive labor and investment. And even if climate change turns out to be less of a problem than many might think, a carbon tax is a “no regrets” policy that will result in lower overall air emissions and the benefits of greater energy efficiency. Why would the CEO of a large energy company advocate less energy consumption? Because it’s important to take the long view on environmental as well as economic issues.And it’s also where my faith in American innovation comes in. A mandate to benefit the environment will spur the kind of technology innovation that

we saw in the last century. Innovation that propelled us to become the world’s leading economy. Set the right goals and Americans can and will lead the way. Our international competitors—motivated by mandatory emissions reductions—have gotten a head start. Japan is the world leader in solar power and hybrid cars, and Europe leads in wind power. Their economies will benefit from greater energy efficiency, and ours will be disadvantaged if we lag behind.

That’s key to leadership. Zalmay Khalilzad, director of the Strategy and Doctrine Program @ RAND & current US Ambassador
to Afghanistan "Losing the Moment? The United States and the World After the Cold War," Washington Quarterly, Spring 1995 lexis The United States is unlikely to preserve its military and technological dominance if the U.S. economy declines seriously. In such an environment, the domestic economic and political base for global leadership would diminish and the United States would probably incrementally withdraw from the world, become inward-looking, and abandon more and more of its external interests. As the United States weakened, others would try to fill the Vacuum. To sustain and improve its economic strength, the United States must maintain its technological lead in the economic realm. Its success will depend on the choices it makes. In the past, developments such as the agricultural and industrial revolutions
produced fundamental changes positively affecting the relative position of those who were able to take advantage of them and negatively affecting those who did not. Some argue that the world may be at the beginning of another such transformation, which will shift the sources of wealth and the relative position of classes and nations. If the United States fails to recognize the

change and adapt its institutions, its relative position will necessarily worsen.

US leadership prevents global nuclear war. Zalmay Khalilzad, director of the Strategy and Doctrine Program @ RAND & current US Ambassador
to Afghanistan "Losing the Moment? The United States and the World After the Cold War," Washington Quarterly, Spring 1995 lexis
Under the third option, the United States would seek to retain global leadership and to preclude the rise of a global rival or a return to multipolarity for the indefinite future. On balance, this is the best long-term guiding principle and vision. Such a vision is desirable not as an end in itself, but because a world in which the United States exercises leadership would have tremendous advantages. First, the global environment would be more open and more receptive to American values -- democracy, free markets, and the rule of law. Second, such a world would have a better chance of dealing cooperatively with the world's major problems, such as nuclear proliferation, threats of regional hegemony by renegade states, and low-level conflicts. Finally, U.S. leadership would help preclude the rise of another hostile global rival, enabling the United States and the world to avoid another global cold or hot war and all the attendant dangers, including a global nuclear exchange. U.S. leadership would therefore be more conducive to global stability than a bipolar or a

multipolar balance of power system.

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Warming is real
Global warming is real. Johann Hari, The Independent (London), “The last gasp of the global warming deniers” January 25, 2007
lexis
And so, at last and at least, the words come. The evidence is now so thuddingly inescapable that even George W. Bush - a man who, when pricked, bleeds oil - has acknowledged "the serious challenge of global climate change" in his State of the Union address. It is only a rhetorical concession, another excuse to fiddle as the West Antarctic ice-sheet melts but it is also a crux moment in the history of global warming denial. Today, the small, lingering band of global warming "sceptics" are beached on the farthest shores of the wrong side of history. They are alone, abandoned even by Global Warming Bush and the oil industry. Yet this is not a time to gloat. It is time to appeal to them to join the fight for survival. Deniers, I am sure some of you were sincere. Man-made global warming is such a horrifying event, it is natural to want to scramble for scraps of evidence suggesting it can't be true. And there are some small misanthropic parts of the environmentalist movement it is perfectly natural to recoil from. The direct action group Earth First! famously made the vile statement that "the Aids epidemic, rather than being a scourge, is a welcome development in the inevitable reduction of human population ??? If [it] didn't exist, radical environmentalists would have to invent [it]." Maybe you wrongly thought all environmentalists were like this. Maybe that's why you were so eager to disprove our core issue. I know it's painful to give up on something you have passionately believed. So let's - for one last time - go through your arguments. Deniers' Myth Number One: Scientists are divided on whether man is causing global warming. In 2004, the universally-respected journal Science studied 928 randomly

selected scientific papers containing the words "global climate change". None of them - not one disagreed with the view that global warming is being caused to a significant degree by burning fossil fuels. As Jim Baker, who was head of one of the leading scientific organisations in the US, explains, "There is a better scientific consensus on this issue than any other, with the possible exception of Newton's Law of Dynamics." Deniers' Myth Number Two: The current warming of the world is simply part of the planet's natural cycle. After all, there were no carbon emissions when the last ice age ended - why should the current warming be due to them? There is a sliver of truth in this: natural climate change has not stopped, and it never will. But we have superimposed onto it a great blast of greenhouse gases of our own, with far stronger effect. To understand
this, you only have to grasp some basic 19th-century physics. As Professor Chris Rapley of the British Antarctic Survey explains, "There are natural greenhouse gases in the earth's atmosphere which trap heat on the planet, keeping the surface temperature 30 degrees warmer than it otherwise would be. Since the start of the industrial revolution, we have

released lots more greenhouse gases - around 1,000 billion tonnes of them. This has enhanced the natural greenhouse effect, and trapped more heat - currently 0.6 degrees. The more greenhouse gases we add, the warmer we'll be. It's not rocket science." Deniers' Myth Number Three: The current warming in the world is all due to changes in the energy output of the Sun. In 1991, the Danish scientists Knud Lassen and Eigil FriisChristensen found a correlation between
temperature changes on Earth from 1850 onwards and sunspot activity, which usually indicate changes in the intensity of solar radiation. As the sun warmed, we warmed. Other scientists studied this closely, and found out that they were partly right: up to 40 per cent of the planet's warming is indeed due to solar activity. But since 1980, sunspot activity has been declining yet temperatures down here have been soaring to the highest levels ever recorded. So while the Sun can take some of the flak, the world's scientists agree: the other 60 per cent remains with us. Deniers' Myth Number Four: In the 1970s, scientists were warning about "global cooling" and a looming Ice Age. How can we now trust these warnings of global warming? In fact, in the 1970s two - literally two - scientists tentatively suggested that cooling could occur over millennia. To compare that meek, misreported suggestion by two people to the overwhelming scientific consensus from tens of thousands of climatologists is, I am sure you deniers can see now, dishonest. Denier's Myth Number Five: Global warming is a religion. People have always had an innate psychological need to believe in a looming apocalypse - this is just the latest version.

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Warming is real
The most recent and reliable models all prove warming is real and human caused. Biotech Business Week, “Recent findings from Duke University, U.S., provide an update on new” April 30, 2007 lexis
Evidence presented in the first phase of the Intergovernmental Panel on Climate Change's 4th Assessment Report, released in Paris, paints the clearest picture yet that human-derived greenhouse gases are playing a significant role in observed global warming, said a Duke University scientist who co-authored one of the report's main chapters. "We are now seeing, not merely predicting, effects of greenhouse warming on a scale and in ways that were not observable before," said Gabriele Hegerl, associate research professor at Duke's Nicholas School of the Environment and Earth Sciences, who also co-authored a summary of the report for policymakers. "When you look at the changes in temperature, circulation, ocean warming, arctic sea ice reduction and glacial retreat together, it paints a much clearer picture that external drivers, particularly greenhouse gases, are playing a key role," she said. "As a result, we can be much more confident that 20th century climate changes were not just linked to natural variability." Hegerl was a coordinating lead author of the IPCC report's chapter on "Understanding and
Report 1: Attributing Climate Change." Francis Zwiers of the Canadian Centre of Climate Modeling and Analysis was also a coordinating lead author of the chapter. IPCC assessment reports are issued every five to six years to provide a comprehensive review of the current state of knowledge on climate change. The 2007 report will be issued in four phases during the year. The first phase, released in Paris, focuses on the physical evidence of global change. The IPCC operates under the auspices of the United Nations Environmental Programme and the World Meteorological Organization and draws on the expertise of about 2,500 scientists worldwide. Hegerl and her chapter's team of co-authors were charged with reviewing the evidence of changes observed so far and assessing which changes can be attributed to greenhouse gas increases and other external influences on climate. In the chapter, they look at the actual measurements of climate and weather changes and compare them with predictions made for the 20th century by sophisticated computer models. "We've studied improved observations from land, sea and space, as well as better temperature reconstructions covering the last 1,000 years," Hegerl said. By comparing observation against modeled projections, she said scientists are gaining a better sense of which external climate influences have been important. "Understanding the observations is really what this all is about. For instance, looking at the patterns of change in 20th-

century temperatures, we can now distinguish between changes caused by greenhouse gases, man-made aerosols, variability in solar radiation and major volcanic eruptions," Hegerl said. "We can also better understand which changes in the more distant past were caused by external influences of climate, such as volcanic eruptions, and how strong the variability of the climate system is. "One of the most fascinating things is
that we see that changes have already happened or are happening now in more climate variables than just temperature," Hegerl added. "For instance, there have been observed changes in ocean temperatures, global rainfall and in circulation of the atmosphere. We now are beginning to understand that these changes occur at least partly in response to anthropogenic influences on climate. This allows us to better evaluate model simulations, which do simulate aspects of these changes, although not as successfully as they simulate changes in temperature," she said. "There are still things, like ice-sheet melting, that the models don't do very well yet. But overall, the predictions and uncertainty ranges of future climate change are becoming much better understood and much more credible," Hegerl said. The IPCC report "hits the nail squarely on the head," she said. "It gives a very balanced view of the evidence for climate change, predictions of future

change, and the remaining uncertainties, and it draws input from very large number of scientists worldwide."

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Warming – Africa module
Climate change creates perpetual civil-wars throughout Africa. Nicholas D. Kristof, The New York Times, “Extended Forecast: Bloodshed” April 13, 2008 lexis
As we pump out greenhouse gases, most of the discussion focuses on direct consequences like rising seas or aggravated hurricanes. But the indirect social and political impact in poor countries may be even more far-reaching, including upheavals and civil wars -- and even more witches hacked to death with machetes. In rural Tanzania, murders of
elderly women accused of witchcraft are a very common form of homicide. And when Tanzania suffers unusual rainfall -- either drought or flooding -- witch-killings double, according to research by Edward Miguel, an economist at the University of California, Berkeley. ''In bad years, the killings explode,'' Professor Miguel said. He believes that if climate change causes more drought years in Tanzania, the result will be more elderly women executed there and in other poor countries that still commonly attack supposed witches. There is evidence that European witch-burnings in past centuries may also have resulted from climate variations and the resulting crop failures, economic distress and search for scapegoats. Emily Oster, a University of Chicago economist, tracked witchcraft trials and weather in Western Europe between 1520 and 1770 and found a close correlation: colder weather led to more crackdowns on witches. In particular, Europe's ''little ice age'' led to a sharp cooling in the late 1500s, and that corresponds to a renewal in witchcraft trials after a long lull. And there's also micro-evidence: in one area, a brutally cold May in 1626 led outraged peasants to call for punishment of witches thought responsible. Some scholars have also argued that the Salem witch trials occurred after a particularly cold winter and economically difficult period. The point is that climate change will have consequences that will be difficult to foresee but will go far beyond weather or economics. There is abundant evidence that economic stress and crop failures -- as climate scientists anticipate in poor countries -- can lead to violence and upheavals. In the United States, for example, some historians have found correlations between recessions or declines in farm values and increased lynchings of blacks. Paul Collier, an Oxford University expert on global poverty, found that economic stagnation in poor countries leads to a rising risk of civil war. Professor Collier warns that climate change is likely to reduce rainfall in southern Africa enough that corn will no longer be a viable crop there. Since corn is a major form of sustenance in that region, the result may be catastrophic food shortages -- and civil conflict. The area that may be hardest hit of all -- aside from islands that disappear beneath the waves -- is the fragile Sahel region south of the Sahara Desert in West Africa. The Sahel is already impoverished and torn by religious and ethnic tensions, and reduced rainfall could push the region into warfare. ''The poorest people on Earth are in the Sahel, barely eking out an existence, and climate change pushes them over the edge,'' Professor Miguel said. ''It's totally unfair.'' His research suggests that a drought one year increases by 50 percent the risk that an African

country will slip into civil war the next year. Ethnic conflict in Darfur was exacerbated by drought and competition for water, and some experts see it as the first war caused by climate change. That's too simplistic,
for the crucial factor was simply the ruthlessness of the Sudanese government, but climate change may well have been a contributing factor. In a forthcoming book, ''Economic Gangsters,'' Mr. Miguel calls for a new system of emergency aid for countries suffering unusual drought or similar economic shocks. Such temporary aid would aim to reduce the risk of warfare that, once it has begun, is enormously costly to stop and often damages neighboring countries as well. The greenhouse gases that imperil Africa's future are spewing from the United States, China and Europe. The people in Bangladesh and Africa emit almost no carbon, yet they are the ones who will bear the greatest risks of climate change. Some experts believe that the damage that the West does to poor countries from carbon emissions exceeds the benefit from aid programs. All this makes the United States' reluctance to confront climate change in a serious way -- like a carbon tax to replace the payroll tax, coupled with global leadership on the issue -- as unjust as it is unfortunate.

This is the most likely scenario for nuclear war. Jeffrey Deutsch, PhD and political risk consultant and Founder, Rabid Tiger Project, November 18, 2002
The Rabid Tiger Project believes that a nuclear war is most likely to start in Africa. Civil wars in the Congo (the country formerly known as Zaire), Rwanda, Somalia and Sierra Leone, and domestic instability in Zimbabwe, Sudan and other countries, as well as occasional brushfire and other wars (thanks in part to "national" borders that cut across tribal ones) turn into a really nasty stew. We've got all too many rabid tigers and potential rabid tigers, who are willing to push the button rather than risk being seen as wishy-washy in the face of a mortal threat and overthrown. Geopolitically speaking, Africa is open range. Very few countries in Africa are beholden to any particular power. South Africa is a major exception in this respect - not to mention in that she also probably already has the Bomb. Thus, outside powers can more easily find client states there than, say, in Europe where the political lines have long since been drawn, or Asia where many of the countries (China, India, Japan) are powers unto themselves and don't need any "help," thank you. Thus, an African war can attract outside involvement very quickly. Of course, a proxy war alone may not induce the Great Powers to fight each other. But an African nuclear strike can ignite a much broader conflagration, if the other powers are interested in a fight. Certainly, such a strike would in the first place have been facilitated by outside help - financial, scientific, engineering, etc. Africa is an ocean of troubled waters, and some people love to go fishing.

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China addon
China will model the plan. The Washington Post, Anne Applebaum, "Global Warming's Simple Remedy" February 6, 2007
lexis
Any lasting solutions will have to be extremely simple, and -- because of the cost implicit in reducing the use and emissions of fossil fuels -- will also have to benefit those countries that impose them in other ways. Fortunately, there is such a solution, one that is grippingly unoriginal, requires no special knowledge of economics and is easy for any country to implement. It's called a carbon tax, and it should be applied across the board to every industry that uses fossil fuels, every home or building with a heating system, every motorist, and every public transportation system. Immediately, it would produce a wealth of innovations to save fuel, as well as new incentives to conserve. More to the point, it would produce a big chunk of money that could be used for other things. Anyone for balancing the budget? Fixing Social Security for future generations? As a foreign policy side benefit, users of the tax would suddenly find themselves less dependent on Persian Gulf oil or Russian natural gas, too. Most of all, though, the successful use of carbon taxes does not require "American leadership," or a U.N. committee, or a complicated international effort of any kind. It can be done country by country: If the British environment minister or the German chancellor wants to go ahead with it tomorrow, nothing is preventing them. If a future American president wants to rally the nation around a patriotic and noble cause, then he or she has the perfect opportunity. If the Chinese see that such a tax has produced unexpected benefits in America and Europe, they'll follow. And when that happens, we'll

know that the apocalyptic climate change rhetoric has finally been taken seriously.

Chinese carbon tax saves hundred-of-thousounds lives and will stabilize long-term growth in China. Maximilian Auffhammer, assistant professor in the Department of Agricultural and Resource Economics at the University of California at Berkeley, and Richard Carson, a professor in the
Department of Economics at the University of California at San Diego, is immediate past president of the Association of Environmental and Resource Economists, The Washington Post, “China's Chance to Lead” August 2, 2007 lexis China would gain in several ways from implementing a substantial carbon tax. By reducing its fossil fuel consumption, China would prevent the deaths of hundreds of thousands of citizens because of the short- and long-term consequences of air pollution from burning coal. Investments in energy-efficient durable goods, encouraged by a carbon tax, would generate energy savings over the lengthy life of these investments. The demands of China's rapid economic growth are outstripping the country's ability to provide the infrastructure necessary for continued growth; a carbon tax would slow short-term growth and allow infrastructure investments to catch up. Ultimately, this would lead to greater long-term growth. If China
fears a drag on its economy from the carbon tax, it could make such a tax partially or fully revenue neutral by reducing other taxes.

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China addon
Chinese hard landing will cause massive social unrest. The International Herald Tribune, Matthew Benjamin and David Tweed, "Risk of bust growing for Chinese economy" July 31, 2006 lexis
Growth is hurtling along at the fastest pace in a decade, defying official efforts to curb investment in unneeded factories and realestate projects. The government's immediate concerns are that overheated growth will saddle China with excess capacity, create more asset bubbles and increase friction with the United States and other trading partners. ''China's unbalanced growth model has now gone to excess and seems in danger of veering out of control,'' said Stephen Roach, the chief global economist at Morgan Stanley in New York. ''The longer China's economic boom runs, the tougher it will be to avoid a more treacherous endgame.'' That might include defaults on bank loans, and eventually deflation and a collapse of asset values. Such a hard landing would risk breeding social unrest within China while

drying up export markets for neighbors like South Korea and Taiwan.

The impact is WMD use and extinction. San Renxing, Epoch Times, “The CCP’s Last-ditch Gamble: Biological and Nuclear War” August 8, 2005 http://english.epochtimes.com/news/5-8-8/30931.html
“In any event, we, the CCP, will never step down from the stage of history! We’d rather have the whole world, or even the entire globe, share life and death with us than step down from the stage of history!!! Isn’t there a ‘nuclear bondage’ theory? It means that since the nuclear weapons have bound the security of the entire world, all will die together if death is inevitable. In my view, there is another kind of bondage, and that is, the fate our Party is tied up with that of the whole world. If we, the CCP, are finished, China will be finished, and the world will be finished.” 3) “It is indeed brutal to kill one or two hundred million Americans. But that is the only path that will secure a Chinese century, a century in which the CCP leads the world. We, as revolutionary humanitarians, do not want deaths. But if history confronts us with a choice between deaths of Chinese and those of Americans, we’d have to pick the latter, as, for us, it is more important to safeguard the lives of the Chinese people and the life of our Party. That is because, after all, we are Chinese and members of the CCP. Since the day we joined the CCP, the Party’s life has always been above all else!” Since the Party’s life is “above all else,” it would not be surprising if the CCP resorts to the use of biological, chemical, and nuclear weapons in its attempt to extend its life. The CCP, which disregards human life, would not hesitate to kill two hundred million Americans, along with seven or eight hundred million Chinese, to achieve its ends. These speeches let the public see the CCP for what it really is. With evil filling its every cell the CCP intends to wage a war against humankind in its desperate attempt to cling to life. That is the main theme of the speeches.

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China – soft landing
China’s economic policies fuel economic overheating – only slowing growth ensures a soft landing. The Economist, “How fit is the panda? - China's economy; China's economy” September 29, 2007
lexis So what immediate threats does China face? The biggest worry is that the economy is overheating and inflation surging out of control. In August consumer-price inflation jumped to 6.5%, up from 1.3% a year earlier and its highest for more than a decade. If China slams on the brakes, its economy could suffer a hard landing, as happened after past episodes of inflation. But inflation is
nowhere near previous danger levels in 1988 and 1994, when it soared above 25% (see chart 1). Moreover, the leap in inflation does not seem to be a symptom of overheating caused by excess demand, as it was in the past. It is due entirely to the rise in food prices caused by supply-side problems. Excluding food, inflation is only 0.9%. This does not mean that food is unimportant: it accounts for one-third of the inflation basket, and rising prices could trigger social unrest. But it is not something that China's central bank can easily fix by raising interest rates. The bank has raised interest rates five times this year, but they still remain low relative to the country's growth rate. Growing public concerns over inflation recently prompted Beijing to introduce a freeze until the end of 2007 on a wide range of government-controlled prices, such as oil, electricity and water. A more effective way to curb inflation would be to allow the Chinese currency to rise faster. This would reduce import prices of food and raw materials and also curb the build-up of

Unless checked, excessive monetary growth combined with over-rapid GDP growth could eventually lead to more general inflationary pressures. In its latest "China Quarterly Update", the World
liquidity as a result of rising foreign-exchange inflows. Bank says that in the first half of 2007 China grew faster than its potential growth rate (currently estimated at around 10.5%) for the first time in a decade (see chart 2). However, excess demand is tiny compared with previous phases of overheating so the risk of soaring inflation causing a hard landing in the near future is remote. A second much-talked-about threat is the bursting of China's stockmarket bubble. Share prices have risen by 400% in just over two years, and average price-earnings ratios based on historic profits are around 50 (based on forecast 2008 profits they are a still-racy 30). Even though almost everyone reckons this is a bubble, history suggests that a bust is not imminent and that share prices could continue to rise for a lot longer: both Japan's Nikkei and America's NASDAQ saw p-e ratios well above 100 at their peaks. Even if share prices did tumble this year, the impact on the economy would probably be relatively modest. The total value of tradable shares—that is, excluding those held by the government —is only 35% of GDP compared with 180% in America at its peak in 2000. Equities account for less than 20% of Chinese households' total financial assets, compared with half in America, so price swings have less impact on spending. When Chinese share prices collapsed by 55% from 2001 to 2005, GDP growth remained robust. Over the past year there has been little sign that people are saving less and spending their capital gains, so a slump in share prices should not have much impact either. Share prices can also affect the cost of capital. But only a small proportion of Chinese companies are listed on the stock exchange and those that are rely mainly on internal finance. Only 10% of total financing for investment this year has come from equities. A more serious problem is that because firms have invested in other companies' stocks, a slump in share prices could directly hurt their profits and hence their investment. According to a study by Morgan Stanley, one-third of listed companies' profits in the first half of 2007 came from shareprice gains and other investment income. If share prices sink, so will profits, which would make shares look even more overvalued. Some analysts also worry that a sharp plunge in equity prices could seriously hurt banks' balance sheets, causing them to squeeze their lending. Chinese banks are officially not allowed to lend to investors to buy shares, but anecdotal evidence suggests that households and firms have taken out loans disguised as mortgages to buy shares. If so, the effect of the bubble bursting could be larger than the direct impact on consumers' wealth—especially if, as seems more likely, the bubble continues to swell for another couple of years before it finally bursts. In many ways China today looks ominously similar to Japan before its bubble burst at the start of the 1990s, resulting in a decade of stagnation. Like Japan, China has high rates of saving and investment, low real interest rates, soaring asset prices, a big current-account surplus and upward pressure on its currency. After the Plaza accord between the big industrial countries in 1985, the Japanese yen rose by 80% against the dollar in three years. Many in China have concluded that the blame for Japan's economic malaise in the 1990s lay largely with the appreciation of the yen. Beijing has therefore allowed the yuan to rise by only 10% since July 2005. But Japan's real mistake was its loose monetary policy to offset the impact of the rising yen—which further inflated the bubble—and then its failure to ease policy once the bust had happened. By holding down the value of the yuan and allowing a consequent build-up of excess liquidity, China risks repeating the same error. However, Paul Cavey, a China economist at Macquarie Securities, suggests that China may have more in common with Taiwan in the 1980s than with Japan. Taiwan's bubble was even bigger, with share prices rocketing by 1,800% between 1985 and 1990. In Japan, reserve accumulation did not play a big role in the bubble. By contrast, the foreign-exchange inflows into Taiwan were greater in relation to its GDP than those seen recently in China. Taiwan, like Japan, saw a big rise in its exchange rate, by 60% in the four years to 1989. In 1990-91 the Taipei stockmarket slumped by 75%, even more than the Tokyo market did. But Taiwan's growth remained fairly strong because policy was eased much sooner than it was in Japan. In other words, contrary to Beijing's fears, a big exchange-rate rise does not inevitably lead to economic depression. The other big difference between China and Japan in the late 1980s is that Japan had a serious property bubble against which banks had lent heavily. Although a house-price crash would have much nastier consequences for China's economy than a share-price crash, because 80% of China's urban households now own their home, there is no evidence of a nationwide housing bubble. Average house prices across China are rising at an annual rate of 8%, with double-digit gains in some cities, such as Shenzhen and Beijing. In a developed economy such increases might seem a little bubbly, but not in one in which nominal GDP is growing at an annual pace of 15%. The ratio of house prices to average income has fallen by 25% in China since 1999. In contrast, at their peak last year American house prices had risen by 45% relative to incomes. A collapse in house prices therefore seems unlikely in China. If neither a surge in inflation nor a bust in asset prices seem likely to derail China's economy over the next year or two, what about a recession in America? Exports account for over 40% of China's GDP, so some economists predict that a fall in exports as a result of a downturn in America would create massive excess capacity and a sharp fall in profits and investment—the making of a nasty hard landing. But the popular notion that China is dependent on export-led growth is a myth; domestic demand is much more important. This year the increase in China's net exports (ie, less imports) is likely to account for about one quarter of its growth—a record amount. But even without this external boost, GDP growth would still have been a respectable 9%. During America's 2001 recession, China's export growth fell by 25 percentage points, but imports also slowed sharply, so GDP growth (as officially reported) remained strong. Since then, the share of its exports to America has shrunk; the European Union and other emerging economies are now more important markets. In the three months to August, Chinese exports to America increased by 14% compared with a year earlier, whereas those to the EU grew by 40%. America's slowdown so far largely reflects a collapse in house-building, but if consumers cut their spending, the impact on Chinese exports would be harsher. The World Bank estimates that if American consumption falls by the equivalent of 1% of GDP, this could knock 0.2-0.5 percentage points off China's GDP growth, depending on how much the Federal Reserve does to cushion the downturn. A recession in America would reduce China's growth, but since Beijing's policy-makers are fretting that the economy is starting to overheat, weaker exports and

slower GDP growth might be a good thing. Not only would it reduce the risk of inflation, but it would also help to trim China's embarrassing trade surplus. If a fall in exports threatens to slow growth by more than desired, the government's strong fiscal position means that it has plenty of room to boost domestic demand by spending more on infrastructure, education or health. The budget was in small deficit in 2006, but may now be in surplus
hence —even excluding the large surpluses of state-owned enterprises. China's public-sector debt is only 18% of GDP, much lower than the 75% average in developed economies, giving the government ample room for a fiscal stimulus. In the short term, therefore, an American downturn is more likely to cause sniffles in China than a heavy cold. Indeed,

if weaker exports forced the government to do more to boost domestic demand it would help to rebalance the economy and make growth more sustainable in the long run.
an American recession might be a blessing in disguise to China:

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China – model
China uses US inaction on carbon to rationalize its economic growth and carbon use. Carbontax.org, "What About China?" May 23, 2008
The imminence of China’s leap-frogging the U.S. as the World’s #1 annual carbon emitter — it may happen as early as this year or next — is being cited to defend American inaction on carbon reductions. This stance ignores several central points. For one thing, the U.S. will continue to be the world’s biggest contributor to global climate change long after China, or even India, surpasses us in annual emissions. That’s because carbon dioxide molecules, once emitted, remain “resident” in the atmosphere for approximately a century. Considering the many decades in which America’s carbon emissions dwarfed everyone else's, of the CO2 now warming Earth, more than three times as much is the product of American emissions as Chinese emissions. Based on present trends, the earliest that China will surpass the United States as the leading source of CO2 is mid-century, i.e., around 2050. (See Slideshow, slide #8.) Second, the United States will continue to dump the most CO2 into the atmosphere on a per capita basis for years to come. The average American is responsible for creating as much CO2 in a day as do people in developing countries in an entire workweek. Third, just as corporations here use China’s inaction on carbon to justify U.S. inaction, so too are industry

and government in China using our temporizing on carbon to rationalize theirs. The way out of this “alliance of denial,” as The New York Times terms it, is to stop delaying and start acting. Breaking this cycle should be easier for the United States, insofar as our per capita use of energy (and emissions of carbon) is many times greater than China’s, and given our well-developed political and administrative institutions. Last, while it is true that only concerted action by all the world’s nations and peoples can meet the climate crisis head-on, it is equally true that every action that reduces carbon emissions helps protect and stabilize climate. The injunction that the perfect must not become the enemy of the good has never been so apt as it is here and now, in Earth’s climate emergency.

China will not move now - waiting for the US. The Washington Post, Maureen Fan; Washington Post Foreign Service, “China Outlines Modest Environmental Goals” June 5, 2007 lexis
China released its first-ever national climate change policy Monday, rejecting mandatory caps on emissions of greenhouse gases as unfair and a threat to the development that has contributed to the country's meteoric economic growth.
Although China is one of the world's largest producers of carbon dioxide, the government made clear that it will not shoulder the burden necessary for change. "It is neither fair nor acceptable to us to impose too early, too abruptly or too bluntly measures which one would ask of developed countries," Ma Kai, minister of the cabinet-level National Development and Reform Commission, said at a news conference. The government outlined a series of environmental goals it is seeking to meet by 2010, from speeding up research and development to raising public awareness about conservation. But the plans included little in the way of initiatives. Instead, they appeared designed to put the best face on environmental efforts so far and to preempt criticism likely to come later this week when President Hu Jintao attends a meeting of Group of Eight leaders in Germany. The United States and China are pointing fingers at each other in a standoff over who bears greater responsibility for curbing emissions. As a developing nation, China is exempt from the 1997 Kyoto Protocol, the international pact that imposed mandatory reductions in greenhouse gases. The Bush administration has refused to ratify it. Meanwhile, although the United States currently emits more greenhouse gases than any other nation, China is expected to surpass it in the next few years. Analysts said Monday that

China's rejection of mandatory caps puts more pressure on the United States.

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China – model
China and the US are in an alliance of denial on climate change policy. New York Times, "Warming and Global Security" April 20, 2007 lexis
On Monday, 11 retired admirals and generals released a detailed 68-page report arguing that climate change could be a ''threat multiplier'' in already fragile parts of the world. Rising sea levels could threaten the livelihoods of more than one billion people living within 45 miles of Asia's coastlines. In Africa, recurring heat waves could cause widespread shortages of food and water, leading to large-scale migrations and escalating tensions. Anthony Zinni, the retired Marine general, made the point elegantly when he said that ''we will pay for this one way or the other'' -- either now, to control the emission of greenhouse gases, or later, in military engagements and ''human lives.'' These same themes were taken up at the United Nations, where the Security Council, under Britain's leadership, held its first-ever discussion of the link between climate change and international conflict. An

overwhelming majority of nations voiced grave concerns about climate change, and many urged stricter worldwide controls on greenhouse gases. Among the few doubters were the United States and China -neither of which has mandatory controls (the Bush administration actively opposes them). Both argued that the Council was the wrong place to raise the issue. What they were really saying was that they don't want to be pushed. In an alliance of denial, China and the United States are using each other's inaction as an excuse to do nothing.

China would move to a carbon tax. The Daily Telegraph (Australia), "China caves on carbon pricing" November 20, 2006 lexis
China has buckled to global pressure and is now backing a possible carbon tax. People's Bank of China governor
Zhou Xiaochuan revealed at the two-day G20 meeting in Melbourne yesterday that the position on global warming of the world's most populous country -- and worst polluter -- had changed. He said China now backed a pricing mechanism for carbon dioxide to be included in the global energy-pricing regime. ''For developing countries ... it's difficult. For the long-term use I

think a price mechanism is important,'' Mr Zhou said, admitting a price mechanism could cost China economic growth. Australia has rejected global calls for a carbon tax, arguing it would cost the viability of domestic coal
production. Treasurer Peter Costello chaired the G20 meeting of finance ministers and central bankers -- and pushed for a collective approach to climate change. Australia was joined by the US, China and Russia at the G20 as countries not to have ratified the Kyoto Protocol. The meeting also urged governments to reopen trade negotiations and secure the future supply of resources through investment. Mr Costello hailed the meeting -- marred yesterday by violent anti-globalisation protests -- as a success. ''These discussions were conducted in the best G20 tradition, with open and frank dialogue, as countries worked to achieve co-operative and practical solutions to major international economic problems,'' he said.

China and India would model. Steve Lohr, The New York Times, “The Cost of an Overheated Planet” December 12, 2006 lexis
Yet without coordinated international action, even if the United States -- the largest source of carbon emissions -- reined them in, this would have only limited effect on global warming. China is on track to surpass the United States as the leading emitter of carbon dioxide by 2009, according to a recent report by the International Energy Agency. ''Unless China and India are brought in, it won't matter much what the developed world does,'' said Scott Barrett, a professor of environmental economics at the School of Advanced International Studies of Johns Hopkins University. But developing

nations like China and India, energy specialists say, would certainly avoid joining any international effort on global warming without an emphatic move by the United States. ''Every year we delay, we contribute to another year of delay in China, India and elsewhere,'' said Jason S. Grumet, executive director of the National
Commission on Energy Policy, a bipartisan group of energy experts. ''The ecological and economic imperative is to start now.''

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China – free trade
The China effect would collapse global trade. The Sunday Times (London), "Protectionism could block 'China effect'" September 17, 2006 lexis
Trade with the rest of the world is hit, first, by a sharp American slowdown and, second, by protectionism. Both look plausible. Protectionism is already evident in Peter Mandelson's bra and shoe wars with China on behalf of the EU. In Brussels and Washington protectionism is never far below the surface, particularly as far as China is concerned. If it increases, it will have the effect of depriving European and US consumers of the China effect of falling prices. Protectionism is not, of course, a one-way traffic. China has just introduced media rules that discriminate against foreign businesses. The authorities have said they are examining controls on imports where local firms are subject to "unfair" competition. Many UK exporters will be shaking their heads at that.So protectionism could be the biggest risk. Left to its own devices, the China effect has many years to run. Protectionism, if allowed to take hold -and the collapse of the Doha world trade round was a pointer -could cause this era of globalisation begin to run into the sand, and deprive the world of its contribution to low inflation. China
would probably do pretty well, even in these circumstances. For the rest of us, things might not be so good.

Trade wars become shooting wars. World wars ensue. Vince Miller and James Elwood, President and Vice-president of International Society for \par Individual Liberty, 1988 http://www.isil.org/resources/lit/free-trade-protectionism.html
When goods don’t cross borders, armies often do. History is not lacking in examples of cold trade wars escalating into hot shooting wars: Europe suffered from almost non-stop wars during the 17th and 18th centuries, when
restrictive trade policy (mercantilism) was the rule; rival governments fought each other to expand their empires and to exploit captive markets. British tariffs provoked the American colonists to revolution, and later the Northern-dominated US government imposed restrictions on Southern cotton exports - a major factor leading to the American Civil War. In the late 19th Century, after a half century of general free trade (which brought a half-century of peace), short-sighted politicians throughout Europe again began erecting trade barriers. Hostilities built up until they eventually exploded into World War I. In 1930, facing only a mild recession, US President Hoover ignored warning pleas in a petition by 1028 prominent economists and signed the notorious Smoot-Hawley Act, which raised some tariffs to 100% levels. Within a year, over 25 other governments had retaliated by passing similar laws. The result? World trade came to a grinding halt, and the entire world was plunged into the "Great Depression" for the rest of the decade. The depression in turn led to World War II. The #1 danger to world peace The world enjoyed its greatest economic growth during the relatively free trade period of 1945-1970, a period that also saw no major wars. Yet we again see trade barriers being raised around the world by shortsighted politicians. Will the world again end up in a shooting war as a result of these economically-deranged policies? Can we afford to allow this to happen in the nuclear age? "What generates war is the economic philosophy of nationalism: embargoes, trade and foreign exchange controls, monetary devaluation, etc. The philosophy of protectionism is a philosophy of war." Ludwig von Mises.

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China – social unrest
Social unrest risks genocidal civil war and Taiwan escalation. John J. Xenakis, Generational Dynamics, Forecasting America's Destiny, “China appears to be approaching a major civil war” January 16, 2005 http://www.generationaldynamics.com/cgibin/D.PL?d=ww2010.i.china050116 China has a history of secular rebellions - the huge White Lotus rebellion in the 1790s and 1800s decade, the Taiping Rebellion in the 1850s and 60s that killed 15% of the population, and Mao's Long March that launched the civil war between Mao and Chiang Kai-shek in the 1930s and 40s killed hundreds of millions. So the increasing patterns of local protests and mass riots are scaring the hell out of the CCP (Chinese Communist Party), since they have enough of a historical sense to know that one of these mass riots could spiral out of control into a full-scale war.
(Generational Dynamics predicts that this will indeed happen.) The riots are an overt sign of a large collection of problems that are plaguing China, and are getting worse almost on a continuous basis, as described in the following sections. Addiction to bubble economy China is addicted to a special kind of crack cocaine: A bubble economy that's been growing at almost 10% a year for 20 years. When that bubble bursts, after 20 years, it's going to be chaos. For a year or so, China has been trying to slow the economy down to a 7% growth rate, and reach a "soft landing." They're using various methods to do this, such as restricting the number of loans. The Chinese yuan currency is pegged to a fixed rate versus the dollar. This means that as the Fed raises interest rates in America, interest rates also go up in China. So keeping the yuan pegged to the dollar is another tool in the attempt to slow down the economy gradually. It's a sad principle of macroeconomics that any change hurts someone. I learned this years ago: When gasoline prices skyrocketed to 50-60 cents a gallon in the mid 70s, Texas thrived and the Northeast suffered a major recession. (In Texas, the bumper stickers read, "Freeze a Yankee.") Then, in the mid 1980s, when oil prices collapsed, the Northeast thrived and got its revenge as Texas suffered. In China, the entire country is tuned to the 10% growth rate. I don't believe that a "soft landing" is possible, but even if it is, I believe that any recession will cause severe social unrest, because of the problems in the following sections. Unraveling of Mao's social structure set up by Mao in the 1950s . The idea was that the rural peasants would work the farms, and the city dwellers would work in the factories. The peasants were not permitted to move to the cities, but that was ok because the income was about the same. That's true no more. Large conglomerates and business enterprises have been buying up the individual farms, converting them into large agribusinesses, just as happened in America following the Great Depression. In China, though, this has made it impossible for peasants to earn a living. The result is that there's been a huge migration of peasants to the cities in the hopes of finding a job. In many cases, the young migrants earn money in the cities and send it back to their families, who have no other source of income. Many of the girls work as prostitutes, except the ones who are lucky enough to become mistresses of wealthy government officials. This situation is not a trivial matter. The migrant floating labor population is estimated at 113 million, or more than a sixth of China's work force of 744 million people. There's no guarantee of finding a job, of course. Much of the work is menial and seasonal, and doesn't pay much. Gender imbalance In fact, girls can earn a great deal of money from prostitution because of the law of supply and demand. There's a huge imbalance of males over females, because of a "one child per family" policy instituted by China in the 1980s to curb population growth. Potential parents knew that without a son to support them, they would starve when they grew older. Thus, many parents used ultrasound to determine the sex of the unborn baby, and would abort a female. Infanticide of female babies also was common. So young men in poverty, without the money to attract a wife, will not create the families that would given them a stake in the established rule of law. These young men are thus free to participate fully in the anti-government rebellions that the CCP right fears so much. Huge migrant labor population Another large group of migrants consists of the tens of millions in the "miserable generation" of people that grew up in the 1950s and early 1960s. They grew under conditions of mass starvation and execution, thanks to Mao's "Great Leap Forward" policy, that created a huge man-made famine. Tens of millions of people died. When the Chinese "generational awakening" period began in the mid-1960s, it was because the kids in the "miserable generation" were beginning to make their political strength felt against Mao and his old guard. Mao's wanted to short-circuit the awakening by re-establishing the revolutionary spirit that had motivated him and his followers during the crisis civil war. (Of course, we know that it's impossible to do anything of the sort.) So in 1996 Mao initiated Great Cultural Revolution, to repair the situation, and formed the Red Guards to implement the assault on dissidents. The Red Guards, mostly younger students, soon brought the country to the verge of chaos; they fought pitched battles, carried out summary executions, drove thousands to suicide, and forced tens of thousands into labor camps, usually far from home. Intellectuals were sent to the countryside to learn the virtues of peasant life. Countless art and cultural treasures as well as books were destroyed, and universities were shut down. Insulting posters and other personal attacks, often motivated by blind revenge, were mounted against educators, experts in all fields, and other alleged proponents of "old thought" or "old culture," namely, anything pre-Maoist. Hundreds of thousands more deaths occurred under the Red Guards. [Stearns, p. 1024] Thus, the kids in the "miserable generation" got no education and developed no job skills. Tienanmen Square massacre and Falun Gong Today, the people in this generation are are in their 40s and 50s, and they survive on state handouts or what they can scrounge from the underside of China's economy as older migrant workers. They raised their voices during the 1989 Tiananmen Square protest, but they were brutally crushed by the CCP. So their resentment took a different root: They became followers of a spiritual movement called the Falun Gong. Older people would get together to meditate and do exercises. Once again, Beijing became alarmed, and declared in 1999 that practicing the Falun Gong was illegal. Rumors have it that millions of Chinese have been jailed simply for doing the equivalent of Richard Simmons exercises. Nonetheless, the Falun Gong movement continues to grow and gain adherents. Their leaders believe it to be the modern version of the God-Worshipper's Society, a spiritual movement which launched the Taiping Rebellion, and was a form of Christianity combined with Buddhism. High rust belt unemployment Unemployment is low Shanghai and the other booming big cities in southeast China because they're export-oriented, but cities like Harbin in the northeast provinces (Liaoning, Jilin and Heilongjiang, the former Manchuria) have very high unemployment. This is the "rust belt," where large governmentowned factories and chemical plants that thrived under Mao's programs in the 1950s have been increasingly stagnant since the 1980s. Millions older of workers are being laid off each year, mostly in the "miserable generation," so many of them will never find another job, as long as they live. Beijing has been pouring billions of dollars into the

The entire social structure

is completely unraveling

There's already a great deal of unrest in the northeast, and it could quickly increase. High income disparity Nominal unemployment is lower in the southeast because of the high concentration of migrant laborers, but income disparity is extremely high. Guangdong
northeast for such things as job-training centers. If there's a recession, and money becomes scarce, then this aid will not be sustained. province has been a major beneficiary of the new economy, as it's one of the wealthiest provinces, earning about $2,000 per year per person, but is adjacent to Jiangxi and Guangxi provinces that earn only $100-200 per person per year. These enormous income disparities form a major engine of the social unrest. Guangdong is a historically significant region for riots. China's last two crisis civil wars both began in this region. The Taiping Rebellion began here in 1852, and Mao Zedong's Long March began here in 1934. In each case, the results were devastating for China. The rebellion spread north to Beijing and out into the midlands, killing tens of millions of people each time. There

If these mass riots grow and spread, deaths will once again reach the hundreds of millions. Taiwan, Tibet, Xinjiang - secessionist provinces China's relations with Taiwan are becoming
have been recent mass riots in Guangdong, but they've been put down quickly by the security policy. increasingly hostile. China's 1989 Tiananmen Square massacre triggered Taiwan's 1990 Wild Lily student rebellion, whose purpose was to advocate Taiwan's nationhood and independence from China. One of the leaders of the Wild Lily rebellion, Chen Shui-bian, has been Taiwan's president since 2000, and has announced plans to move towards independence, albeit slowly. In fact, Taiwan is just one of China's problem provinces. Two of its western provinces, Buddhist-dominated Tibet and Muslim-dominated Xinjiang, also have secessionist movements. In a way, the western provinces are even more important to China than Taiwan, since China must maintain hegemony in Central Asia for its own security. Thus, Chen's election and plans have infuriated the CCP, which can't afford to be weak on Taiwan without giving comfort to Tibet and Xinjiang, In fact, China's rhetoric took a great leap forward in December, when new statements said it was China's "sacred responsibility" to use Chinese

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the Taiwanese are biding their time right now, waiting for the right moment to declare independence. They've very well aware that any move in that direction today would bring an immediate invasion, so they're waiting until the right moment, when they have leverage. Such a moment could come if a new Chinese rebellion began to spiral out of control. Not only would Taiwan then move toward independence, but they even might be forced to choose sides, and thus to side with the rebellion against the CCP. North Korea mobilizing for war Documents leaked
armed forces "to stop the Taiwan independence forces from splitting the country," My feeling is that from North Korea indicate that they have been mobilizing for war since April, 2004, focusing on an attack from the U.S. But North Korea is believed to have several nuclear weapons and the missiles to deliver them, and Beijing knows that some of those missiles may be headed in their direction. Skyrocketing food prices Food has been getting increasingly expensive in China. According to recent studies, industrial construction and erosion are eating up 0.5% of China's farmland each year. China lost 2/3 of its farmland in 40 years, but has 2.3 times as many people. (Using my standard benchmark measure of 0.96% annual increase in food production per acre of farmland, the above figures mean that the amount of food per capita is ((2 / 3) / 2.3) * (1.0096^40) = 42% of what it was 40 years earlier.) Or course China's food problems are consistent with what's happening in the rest of the world. A Washington Post analysis earlier this year indicated that food prices are skyrocketing around the world. This is happening because of what I call the "Malthus Effect," which causes the population to grow faster than the food supply, except during major genocidal wars. Population growing faster than the food supply causes food to become relatively scarce, causing food prices to rise. China has particularly added to this problem in the couple of years, as it's been importing food to feed people in its overheated economy. This makes China's food problems especially critical, when combined with the other problems. If there's a recession in China in 2005, then China won't be able to import enough food to meet its shortfall, and migrant workers will be unable to get jobs and make money to send back to their families in rural areas.

China is almost a textbook case of a genocidal civil war waiting to happen. It could be triggered in any of three ways: (a) A collapse of the 20 year old financial bubble; (b) A regional mass riot spiraling out of control; or (c) Any "major incident of Taiwan independence."
This is certain to foment further social unrest. Summary

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Escalation of nationalism causes two scenarios for extinction. Martin Wolf, associate editor and chief economics commentator, Financial Times (London, England), "Though precedents are ominous, China's rise to greatness need not bring conflict." September 15, 2005
lexis
Today, the Communist party ignores this dreadful past. Instead, it is promoting market-led development and is transforming the government into a technocracy. But it is also prepared to cultivate nationalist sentiment, directed particularly at Taiwan and Japan. Meanwhile, rapid development is bringing with it the upheavals of mass industrialisation and urbanisation. These may make appeals to nationalism still more attractive, as they did in late 19th-century Europe. Peaceful and co-operative relations are perfectly possible, therefore. But they are not inevitable. Much will depend on China's own development. But just as much will depend on how the rest of the world and, above all, the US

behaves. Will it create and sustain an international environment that supports China's rising prosperity and manages potential points of friction? China's growth depends
heavily on exploiting opportunities for trade and investment. Fortunately, a global trading system, supervised by the World Trade Organisation (of which China has also been a member since 2001) already exists. Apart from its role in promoting liberalisation, the WTO has the invaluable function of turning what would otherwise be conflicts among great powers into questions of law. Maintaining a healthy WTO is as important for China as it is for the US. That is why they share a strong interest in a successful conclusion of the Doha round of trade negotiations. No comparable norms and rules have governed the international monetary system since the breakdown of the Bretton Woods system of fixed exchange rates in 1971. What some analysts think of as a second Bretton Woods exchange rate regime has grown up, based on the link between the Chinese renminbi and the US dollar. But this is a purely informal arrangement. In July, China moved its exchange rate anchor from the dollar to a currency basket. It also accepted a minuscule appreciation against the dollar. Yet as the US current account deficit explodes towards 7 per cent of GDP, the tensions over trade will grow, with dangerous consequences both for trade and the wider political relationship. It is wrong to argue, as some Chinese do, that low US savings alone are at fault. The US cannot adjust its external balance, on its own, without precipitating a global recession. Global macro‚economic co-operation will be needed, to which China can - and must - contribute through currency appreciation and an expansion of domestic demand. Now turn from economics to the geopolitics of territory and security. Neither the US nor China is geographically expansionist today,

Potential points of friction exist, however: Taiwan is one and North Korea is another. Yet the Chinese authorities must be aware of their strategic vulnerability. Distrustful neighbours - India, Japan, Russia, South Korea and Vietnam - encircle their
though both have been expansionist in the past. country, while the US, in effect a giant island, is free from this constraint. China could bring these neighbours into a classic balance-of-power coalition against it if it behaved in an unduly aggressive manner. A Chinese invasion of Taiwan would surely have that result even if it did not lead to war against the US. It is overwhelmingly in China's interest to assuage its neighbours' concerns, therefore, rather than exacerbate them. On terrorism by non-state actors, the two powers will always be on the same side. This leaves the competition for resources and, above all, for energy. If the price of oil were to go still higher, China and the US might be tempted to use military power to secure resources and so increase their perceived energy security. That would be immensely dangerous. Much the more sensible response would be to increase energy efficiency, to co-operate in developing energy technologies and to trade for resources in the world market rather than attempt to secure them by force. As George W. Bush and Hu Jintao met in New York on Tuesday night, what stretched before them was a very long-term relationship between two increasingly equal powers. China's economy may exceed the US economy in size within a generation. Its military is certain to become increasingly powerful. In the longer term, however, their populations may come closer to balance. When the US became independent, almost 230 years ago, China's population was more than 100 times as big. Today, it is just over four times as big. By the 22nd century, the US population may be half of China's, as the latter's birth rate falls as low as those of Japan or Hong Kong, while the US continues to absorb high levels of immigration. Relations between the two powers will never be warm. But they could be workmanlike. China is not yet a law-governed capitalist country, let alone a democracy. But it is, above all, busily importing the market. It should also approach more closely to democracy as its population becomes more prosperous, sophisticated, urbanised and demanding. It is in US interests to promote

the phase of US unilateral hubris must be coming to an end, as the limits of its power become ever more evident. A country that cannot control Iraq can hardly remake the globe, on its own. Both powers should see the benefits of co-operation rather than conflict. Both should also recognise the advantages of strengthening multilateral institutions that diffuse great-power conflict and give the rest of the world a stake and a say in their decisions. Provided their leaders recognise the need to sustain peace and co-operation, they should be able to manage their relations. We must hope
this peaceful development. Equally,

they do so. The fate of the world depends heavily on it.

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China – deforestation/biodiversity
Rapid Chinese growth is causing deforestation and destroying biodiversity. The Korea Herald, "Korea needs environmental leadership" April 8, 2008 lexis
China's rivers, reservoirs, and other water resources are so polluted that they are affecting the Yellow Sea and other oceans. Hazardous solid wastes are often dumped untreated. Serious deforestation and overuse of other natural resources have fueled economic growth, but have also diminished biodiversity and endangered many forms of wildlife. Neither the United Nations nor other countries can keep China in check. The
superpower is reluctant to admit that it is a major environmental polluter, or to commit significant funding to environmental programs, even though it is just beginning to recognize the seriousness of the problem.

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Transatlantic trade war
EU will slap tariffs on US goods if we do not get carbon taxes in place. Trade war. The Financial Post (Canada), Terence Corcoran, “Carbon tariff trade war?” March 25, 2008 lexis
As world financial markets struggle through credit risks, looming currency crisis and talk of recession/depression, along come an assortment of politicians and economists set to pile on another round of global downers: carbon taxes and a possible carbon trade war. A European Union summit agreement two weeks ago to slash carbon emissions by 2020 ended with a veiled threat. If the rest of the world doesn't match Europe's carbon tax and control regimes, "appropriate measures" can be taken by the EU, the final summit statement said. The phrase "appropriate measures" hasn't been defined yet, but French President Nicolas Sarkozy thinks Europe should impose a carbon tariff on goods imported into Europe. If steel arrives from China or America, countries that have no carbon taxes in place, then Europe should tax the steel. European governments love a good excuse to build trade barriers. Carl B. Hamilton, a Swedish MP and economics professor, warns in a letter to the Financial Times that EU-initiated carbon trade barriers "could provoke a global trade war between the EU on the one hand and countries such as the United States, China, India and Brazil on the other." Risks of carbon protectionism are rising elsewhere. Two Canadian economists, Thomas Courchene and John R. Allan of the Institute for Research on Public Policy, write in the latest issue of the institute's magazine, Policy Options, that "carbon tariffs" offer a solution to the inevitable "free rider" problems that will flow from national and local carbon tax regimes. The free rider problem is twofold. First, if Canada or Europe imposes carbon taxes, companies based in non-carbon-tax countries will have a competitive advantage. Second, Canadian companies hit by Canadian taxes will have an incentive to build new plants in non-tax jurisdictions. The way to fix these two problems, Messrs. Courchene and Allan say, is to impose a carbon tariff on imports. As they put it: A national carbon tariff or a carbon import tax [would be] levied on the carbon footprint of all imports from all countries (including on the carbon emissions components relating to the logistics compnent, especially shipping, throughout the supply chain). Consistency ... would require that it be applied to all domestically produced and consumed products. Fitting these tariffs into the world trading system would be a piece of cake. "So long as the national environmental policies do not discriminate arbitrarily between foreign and domestic products, or between products imported from different trading partners, there should be no problem." Well, that was easy to say, but what it means in practice is another matter. Tracking carbon inputs in any product is an impossible task, a nightmare of measurement and calculation that would require a massive bureaucracy at the World Carbon Trade Measurement Agency and tie up carbon trade negotiators for decades, assuming no trade war intervenes to crash the world trade system. An example is beer: Canadian beer would benefit if European beer faced a carbon tax on transport costs from Europe. But Canadian beer might use hops and other inputs that have to be transported across Canada. What kind of electricity and water sources are used in each location? Would carbon tariffs become a protectionist policy favouring Canadian beer? In Ottawa, the Liberals appear to be leaning toward a carbon tax plan. As the Liberal economic strategist, M.P. John Mc-Callum would know that Canada is in no position to impose a carbon tax in isolation. It would impose a burden on Canadian industries and hit the country's competitiveness. Even the National Round Table on the Economy and the Environment only endorsed a carbon tax if it were part of an international effort. Canada cannot impose a carbon tax on its own, unless Mr. Mc-Callum intends to follow the advice of Tom Courchene and John Allan. If the Liberals want a carbon tax, they will have to adopt, like the EU, compensating threats of trade action against non-carbon tax nations. Before we go too far on this, we might want to remember the story of the U.S. Smoot-Hawley Tariff. Back in 1931, at the beginning of the Great Depression, Congress whipped up a tariff bill to protect U.S. industry and farmers. It raised existing tariffs from 40% to more than 50%. The tariff on Canadian wheat jumped 40%. The trade-crippling law hit the world economy and is widely credited with exacerbating the Depression. Well, you might say, no carbon tariff is going to be that severe. But who can say? To hit carbon emission reductions targets set by governments, carbon taxes are going to have to run to $200US or $300US a tonne, equal to more than 75¢ on a litre of gasoloine. That's bad enough, but doubly dangerous if imposed in the context of a global trade war and worldwide financial crises.

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Trade war coming. Lloyd's List, January 24, 2008 lexis
The European Union could be heading for a trade war with the US over its carbon-trading scheme. European Commission President Jose Manuel Barroso Enhanced Coverage Linking European Commission President Jose Manuel Barroso wants to bring non-European manufacturers into the system but the signs are that a furious Washington would retaliate. The situation will worry those who view the EU's move as protectionism sneaked in through the back door. On a purely practical level, it could also damage shipping interests by acting as a restraint on world trade. Mr Barroso outlined his intention in a speech delivered to a business audience at London's Canary Wharf earlier this week. His argument was that there is little point in Europe's energy-intensive industries cutting their greenhouse gas emissions if it would result in them losing market-share to rivals in countries that do not impose such requirements. Mr Barroso wants to see a comprehensive global treaty on emissions that would secure a level playing field by introducing the same standards everywhere. But he said that if this cannot be achieved, either foreign companies should be forced to purchase EU carbon allowances in the same way that European companies have to, or EU companies should be given free carbon allowances. Commentators believe that Mr Barroso might have been influenced by France, which has long sought what have been dubbed "climate change sanctions", particularly against the US. Yet Mr Barroso has been keen to stress the free market logic of the policy. He said: "The reality, of course, is not so much that we are bringing climate change to the marketplace, but that climate change is happening to the market place." He said that it is necessary to "incentivise the saving of the planet". The cap and trade system has shown companies that if they invest in emissions reduction, they can profit from the opportunity of selling their carbon allowances. While not mentioning shipping directly, he made clear that the existing scheme will be extended to "all major industrial emitters", a category that clearly includes the shipping industry. All of this is not likely to go down well on the other side of the Atlantic. A precursor to the US's likely reaction, can be found in a quote from the notes to a speech recently delivered by US Trade Representative Susan Schwab: "The unilateral imposition of restrictions can lead to retaliation, and dramatically impact economic growth and markets worldwide ndash; while accomplishing nothing or worse when it comes to advancing environmental objectives." British Energy Minister Malcolm Wicks has also reacted unfavourably to Mr Barroso's speech. He told the BBC: "We believe in global trade, we want more of it in the future, not less, and that is good for the European economy. So we are against any measures which might look like trade barriers. "There is always the danger that the protectionists in Europe ... could use this as a secret weapon... to bring about protectionism." Sources at the Department for Business, Enterprise and Regulatory Reform, where Mr Wicks works, admitted that the speech had taken the UK government by surprise, and that it had not yet decided how to formally respond. The EU today announced plans that will ensure that, by 2020, carbon dioxide emission levels will be 20% lower than they were in 1990. That target could rise to 30%, depending upon whether or not agreements can be reached with other countries. The proposals also call for a 20% increase in the use of renewable energy and for biofuels to make up 10% of all transport fuels used in the EU by 2020.

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Transatlantic trade war
Trade war would destroy global free trade. Raymond J. Ahearn, Specialist in International Trade and Finance, Foreign Affairs, Defense, and Trade
Division, CRS Report for Congress, “Trade Conflict and the U.S.-European Union Economic Relationship” July 26, 2006 The United States and the European Union (EU) share a huge, dynamic, and mutually beneficial economic partnership. Not only is the U.S.-EU trade and investment relationship the largest in the world, but it is also arguably the most important. Agreement between the two partners in the past has been critical to making the world trading system more open and efficient. Given the high level of U.S.-EU commercial interactions, trade tensions and disputes are not unexpected. In the past, U.S.-EU trade relations have witnessed periodic episodes of rising trade tensions and conflicts, only to be followed by successful efforts atdisputesettlement. This ebb and flow of tradetensions occurred again last year with high-profile disputes involvingtax breaks for U.S. exporters and production subsidies for the commercial aircraft sector. Major U.S.-EU trade disputes have varied causes. Some disputes stem from demands from producer interests for support or protection. Trade conflicts involving agriculture, aerospace, steel, and ‘contingency protection’ fit prominently into this grouping. These conflicts tend to be prompted by traditional trade barriers such as subsidies, tariffs, or industrial policy instruments, where the economic dimensions of the conflict predominate. Other conflicts arise when the U.S. or the EU initiate actions or measures to protect or promote their political and economic interests, often in the absence of significant private sector pressures. The underlying cause of these disputes over such issues as sanctions, unilateral trade actions, and preferential trade agreements are different foreign policy goals and priorities of Brussels and Washington. Still other conflicts stem from an arrayof domestic regulatorypolicies that reflect differing social and environmental values and objectives. Conflicts over hormone-treated beef, bio-engineered food products, protection of the audio-visual sector, and aircraft hushkits, for example, are rooted in different U.S.-EU regulatory approaches, as well as social preferences. These three categories of trade conflicts — traditional, foreign policy, and regulatory— possess varied potential for future trade conflict. This is due mostlyto thefactthatbilateral and multilateral agreements governingthesettlement of disputes affect each category of disputes differently. By providing a fairly detailed map of permissible actions and obligations, trade agreements can dampen the inclination of governments to supply protection and private sector parties to demand protection. In sum, U.S.-EU bilateral trade conflicts do not appear to be as ominous and threateningas the media often portray, but theyare not ephemeral distractions either. Rather they appear to have real, albeit limited, economic and political consequences for the bilateral relationship. From an economic perspective, the disputes may also be weakening efforts of the two partners to provide strong leadership to the global trading system.

US-EU trade relations key to global trade. Raymond J. Ahearn, Specialist in International Trade and Finance, Foreign Affairs, Defense, and Trade
Division, CRS Report for Congress, “Trade Conflict and the U.S.-European Union Economic Relationship” July 26, 2006 Trade conflicts rather appear to have real, albeit limited, economic and political consequencesforthebilateral relationship. Perhaps moresignificantly, tradedisputes may also pose very real obstacles for the two partners in their efforts to play a leadership role in promoting a more open and prosperous world economy. This is particularlyevident in thewaybilateral tradedisputesmaybetestingthe functioning of the World Trade Organization.

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Key to global trade. Raymond J. Ahearn, Specialist in International Trade and Finance, Foreign Affairs, Defense, and Trade
Division, CRS Report for Congress, “Trade Conflict and the U.S.-European Union Economic Relationship” July 26, 2006 Trade disputes may have discernible impacts on U.S.-EU efforts to provide leadership of the world economy. The disputes absorb a significant amount of time and energyof keypolicymakers at the expense of efforts to pursue common interests and objectives, such as completingthe Doha round of multilateral trade negotiations. Moreover, the two powers need to set an example of cooperation and adherence to WTO rules if the whole system is not to unravel. The credibility of the WTO depends critically on a prompt, effective, and fair dispute-settlement mechanism. Unfortunately, the EU is seen byU.S. policymakers and interest groups affected by the beef and banana cases as having used every loophole to delay decisions and then refuse to comply with panel decisions. Similarly, U.S. compliance efforts in FSC and Byrd Amendment disputes are found wantingbyEU policymakers. Whileonlya handful of U.S.-EU WTO disputes have ended in withdrawal of concessions (i.e. retaliation) since 1995, non-compliance by a key member arguably weakens the authority of the WTO and serves as a poor model for the rest of the world. 53 Whyshould we complywith WTO panel decisions if the EU does not have to, many countries ask. Non-compliance by one of the two leading economic powers is also said to diminish the perceived value of negotiating new trade agreements. 54 Both the U.S. and EU (bananas in the case of the U.S. and the FSC in the case of the EU) have brought complaints to theWTO that mayhave been motivated more by a desire to score points with domestic political interests or to rack up negotiating leverage by success fully prosecuting cases than to address serious trade problems. To the extent that a charge of capricious use of the dispute settlement process is valid, theWTO as an institution mayalso beweakened. Somemayarguethatno institution can survive for long this kind of treatment by the body’s two biggest members. To deal with the problem of non-compliance, the U.S. and EU have legalistic and diplomatic options. In the area of some of the most bitter U.S.-EU disagreements, particularly over GMOs, the WTO may be asked to make decisions on very complex issues that go deep into the domestic social and the environmental life of each side. Binding rulings in areas that have strong domestic roots can raise sovereigntyissues and court a public backlash. Under these circumstances, where the formulations of right and wrong are increasingly blurred, it may be legitimate to question whether WTO panels should be asked to clarify vague rules where there is little U.S.-EU consensus, or whether trade officials should attempt to negotiate diplomatic solutions to disagreements that are so difficult to resolve.

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Terrorism – oil extensions
Oil dependence handicaps the war on terror Rep. Tom Lantos, 6/20, 2002, Federal News Service, Hearing of House International Relations
Committee
(D-CA): Thank you very much, Mr. Chairman. I shall be very brief. Let me first express my appreciation for your holding this very important hearing. Since the horrific events of last September we have held a number of important hearings to assess how we can most effectively defeat global terrorism. Until today we have not examined how our reliance on Middle Eastern oil handicaps our ability to combat international terrorism. Mr. Chairman, today America's dwindling oil reserves

provide less than half of the oil our economy uses. This leaves us heavily dependent on the Middle Eastern regimes that control the vast majority of the world's known oil reserves. Many of these regimes are either actively hostile to the United States, as is the case with Iran, Iraq and Libya, or unsteady autocratic regimes beholden to Islamic fundamentalists, like Saudi Arabia. Not surprisingly, many of these same regimes funnel oil revenues into support for global terrorist organizations. The Saudi royal family, for instance, pumps
millions of dollars into radical religious schools and mosques across the Middle East that spread the puritanical teachings of the Wahhabi sect of Islam. These schools preach hate toward America. Many of these schools train the very Al-Qaeda terrorists who struck America on September 11. Mr. Chairman, our dependence on Middle East oil severely undermines our ability to combat international terrorism. Fearing another Arab oil embargo, some of our diplomats cow tow to Middle East autocrats and permit their anti-democratic, anti-American practices to go unanswered. It is distressing that U.S. foreign policy in the Middle East is often held hostage to oil interests. The question we must ask ourselves is how can we break free of this crippling dependence? The title of today's hearing is the Facts and Myths Behind Foreign Oil Dependency. The fact is that we will remain beholden to these Middle Eastern suppliers until we scale back America's addiction to oil. The myth is that we can drill our way out of dependency.

Decreasing consumption will not solve the root of terrorism. Cornell Daily Sun, March 4, 2004
David Dunford, former U.S. Ambassador to Saudi Arabia and Oman; David Driesen, associate professor at Syracuse University College of Law; and Max Martina, managing director at the Alternative Energy Institute spoke Wednesday in Myron Taylor Hall at Cornell University in a panel presentation entitled "U.S. Foreign Oil Dependence: Is Alternative Energy the Forgotten Weapon in the War on Terrorism?" The lecture was sponsored by the Clark Fund for the Middle East and the Cornell Law School Environmental Society. Moderator Steven Diamond introduced the three panel participants before turning the podium over to Dunford. "There is a new crisis each day. We have to address a different perspective -- can an alternative energy policy help?" asked Diamond. Dunford, who was first to speak, explained the current Middle Eastern political state and U.S. energy consumption's effect on the region. "We must approach the subject and look at the U.S. interest in the Middle East, and what effect our consumption has on the economic policy of other countries," he said. He then mapped out what he believes are America's ultimate interests: counter-terrorism, oil, Israel, democracy and human rights. With regard to oil, "U.S. and Saudi Arabia production is roughly equivalent," said Dunford. He continued, "U.S. consumption is one-fourth the world consumption. The Saudi Arabia policy is to keep us hooked. The price of oil now is $36.60 per barrel -- it is a timely moment to talk about alternative energy." Dunford then moved on to the subject of the Middle East. He considered the question of the effect of oil on producers. Economically, oil production leads to the "dutch disease," a complicated chain of events resulting in economic stagnation. Despite income increases from oil, "Middle East qualities of life don't go up as fast as you'd expect. The government is authoritarian, and much of oil revenues go to the military. Oil gives government a vacation from economics and politics," said Dunford. He then discussed the subject of Islam and terrorism. "We want to keep the peace process in play [in Israel] ... but I am not sure energy conservation will help," he said. As for globalization, Dunford said, "the spread of U.S.

values, culture and lifestyle produces a powerful backlash. Terrorism becomes to them the equalizing factor." Dunford concluded by saying, "Reducing our dependency on fossil fuels is good. To reduce terrorism, we have to find the root of terrorism, and I believe it runs though Jerusalem and the Arab/Israeli conflict."

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Terrorism – oil extensions
Until we decrease our dependence on foreign oil, we will never be able to win the war on terrorism. Al Qaeda is currently increasing attacks in the oil sector – now is the key time to act
Alon Ben-Meir, Middle East Project Director at the World Policy Institute, New York and professor of International Relations at New York University, June 21, 2004 To prevent a new catastrophic terrorist attack and ultimately defeat terrorism, the next administration must develop a comprehensive strategy comprised of 10 distinct domestic and international policy agendas that must be acted on simultaneously. A national energy-independence strategy is the second of the 10 policy agendas. A growing consensus in
the United States on the need to enact and fund an energy-independence plan as our future national security interests may depend on it. Successive Democratic and Republican administrations have failed to develop a national energy strategy to free us from dependency on outside sources. In the wake of recent terrorist attacks in Saudi Arabia and Iraq, now would be an opportune time to develop a comprehensive strategy that will free us from foreign oil within the next eight to 10 years, a time frame considered doable by many industry experts. Current events in the Middle East and increasing gasoline prices are reminders, not only of our vulnerability, but of our shortsightedness and negligence regarding our most critical national security concern. It is baffling that the U.S., with all its human, technological, natural, and economic resources continues to depend on Middle-Eastern oil, making itself hostage to the turmoil in the region and to the whims of oil-producing rulers. Because of our dependency on Mideast oil -- of which two-thirds of the world's reserves are located there -- we may find ourselves in a crippling crisis. We import more than 55 percent of our domestic oil consumption. Besides undermining our national security, this dependency adds tens of billions to a trade deficit already exceeding $1/2 trillion a month. Since the 1973 oil embargo, Americans have spent $7 trillion more for oil products due to OPEC's regulation of production. Under the pretext of the war on terrorism, Iraq was invaded at a cost of more than $200 billion -- and our expenditures are still rising -when, in fact, the administration was motivated largely by oil considerations. Al-Qaida has long since discovered that America's dependency on oil is a major vulnerability that can be exploited to the detriment of both the United States and its major oil suppliers, especially Saudi Arabia. The series of bombings in that nation, beginning in May 2003 and continuing up to the most recent violence in Riyadh and the spree of killings of foreign contractors, including the attack in Khobar, signal a deliberate escalation of violence, with a focus on the oil industry. Al-Qaida's determination to undermine the Saudi regime is based on a four-part strategy: to shake the kingdom's economic base, demonstrate the government's vulnerability and subservience to the United States, spread fear to force foreign nationals out, and capitalize on public discontent to develop a much broader resistance movement. Even now the Saudi government is in denial and has ignored the gathering threat. It has failed to come to grips with the magnitude of the problem. Fearing further public alienation, unwilling to heed the cries of the nation's young people (70 percent of the population age 25 or under) for greater openness, and freedom and terrified of losing control of the country, the Saudi regime is still reluctant to take sweeping actions against the militants. The government now finds itself in a bind. A battle for the people's hearts, minds, and beliefs is underway, perhaps marking the beginning of a revolution with profound consequences not only for the future stability of the kingdom and the region but also for the supply of oil. The situation in Saudi Arabia is a foreshadowing of what could become the reality for other Arab oil-producing nations, a reality that should give pause to the next administration when it comes to continuing our dependence on Arab oil. The U.S. predicament is multiplied because our addiction to cheap oil has blurred our thinking. As we watch another American being beheaded in the Middle East, we must ask ourselves: how much longer can we continue to delude ourselves and pursue the same failed policy of merely trying to kill or capture terrorists (albeit necessary) rather than dealing with the root

causes of terrorism itself?

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Oil impacts
Oil wealth is a curse—it hurts the economy and causes corruption and civil wars Lutz Kleveman, free-lance journalist (has worked for CNN, Daily Telegraph, Newsweek) and book author, 2003, The New Great Game, pg. 88
“In dealing with its sudden oil wealth,” says Andrew Rearick, director of a think tank in Almaty that counsels foreign companies investing in Central Asia, “Kazakhstan has not yet done as badly as Nigeria but, God knows, it is not Norway, either.” The Scandinavian country is seen as the one model for how a country manages to absorb the shock of an oil jackpot without serious political or social crises, while at the same time distributing the wealth on a relatively equal basis. In almost every oil state across the globe, the sudden windfall of petrodollars has proved more of a curse than a blessing, leading to corruption, social tensions, coup d’etats, and civil wars. After the oil crisis of 1973, most governments of oil exporting countries spent their new massive revenues on enormous investments in social programs, infrastructures, the military, and subsidized state companies. However, the economies were unable to absorb such a massive cash infusion and in the 1980s, when the oil prices dropped, these luxuries were no longer affordable and the boom ended. The modern skyscrapers of Lagos and Caracas sat empty while unemployment and poverty skyrocketed. In most oil countries, economic growth in the two

decades following 1973 was lower than before the oil rush, and per-capita incomes dropped. Many countries experienced deep social and political crises. In Iran, the shah’s modernizing program of the “Great Civilization”
led to the Islamic revolution, while in Nigeria one general’s putsch was followed by another. Algeria and Sudan drifted into bloody civil wars, while Venezuela has been plagued by constant riots and military overthrows, bringing the country (and its oil industry) to a virtual standstill under the present rule of President Hugo Chavez.

Oil wealth causes corruption, economic decline, political oppression, and civil wars Lutz Kleveman, free-lance journalist (has worked for CNN, Daily Telegraph, Newsweek) and book author, 2003, The New Great Game, pg. 263
No matter how many soldiers and civilians have so far died in Iraq and other Great Game battlefields for the sake of brazen energy imperialism, they won’t be the last. With the industrialized world’s addiction to oil growing unabated, more energy wars are a realistic prospect. As the planet’s remaining oil reserves are going to last for only a few more decades, the struggles over

access and profits between countries and multinational corporations are fast becoming fiercer, and they continue within the societies of oil-rich countries. In Kazakhstan, Nigeria, Venezuela, Sudan, Angola, the Arab sheikhdoms, and many other countries sudden oil wealth has led to corruption, economic decline, political oppression, revolutions, or civil wars. “We are drowning in the excrement of the Devil,” the Venezuelan OPEC founder Juan Alfonzo once said of an oil boom’s dire side effect.

Oil wealth causes corruption and civil wars Michael Renner, Senior Researcher at the Worldwatch Institute, January 2004,
http://www.fpif.org/papers/03petropol/war.html
Why are some countries susceptible to oil-based conflicts? Ample resource endowment can have negative economic consequences, as countries grow overly dependent on these resources, under-invest in critical social areas such as education and health, and fail to diversify their economies. Oil and other resource extracting industries tend to create enclaves of wealth weakly linked to national economies. The more countries depend on exporting oil, the worse they score in terms of human development. Specifically, they fall far short in terms of child mortality rates, life expectancy at birth, and child education. They also experience significantly higher levels of inequality between the rich and poor than other countries with comparable levels of income. This is not mere coincidence. Societies in which the main income flows from oil royalties tend to suffer from extremely poor

governance. Because such regimes rely less on revenues derived from a broad-based system of taxation, they also have less need for popular legitimacy and feel less pressure to be accountable. Corruption and patronage are rife. Many governments of oil-rich countries spend a very high proportion of state income on internal security. They purchase weapons and maintain sizable armed forces to suppress democratic movements or other challenges to their power. In such situations, rulers often foster and manipulate conflicts among different communities, factions, and ethnic groups as a means to hold onto control. However, this intensifies friction within the society. Discontented and aggrieved groups turn increasingly to protest and sometimes hostilities. Rivals rise to challenge discredited leadership. Ruthless criminal entrepreneurs, who sense opportunities for pillaging resources, use violence to achieve their objectives. In a developing country with a poorly diversified economy, seizing control of a prized
resource is the most likely ticket to wealth and power.

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Soft power addon
Global polls demonstrate that anti-Americanism is becoming more widespread. Ali S. Wyne, Writer, October 16, 2007, The Tech Online, Anti-Americanism in the New Century
http://www-tech.mit.edu/V127/N46/wyne.html In his March 2007 testimony before the House of Representatives (http://pewglobal.org/commentary/display.php?AnalysisID=1019), Andrew Kohut, the president of the Pew Research Center, noted that “it is no longer just the U.S. as a country that is perceived negatively, but increasingly the American people as well, a sign that anti-American opinions are deepening and becoming more entrenched.” No one would deny the existence of a values gap between the United States and the global community. Polls demonstrate that the global community is concerned with American levels of nationalism and religiosity and the United States’ tendency to sacrifice social safety nets in the name of progress. The polls also reveal that the world sees Americans as dishonest, avaricious, and even violent. However, these same polls reveal widespread admiration for American science, technology, and popular culture. They also find great respect for Americans’ industriousness and inventiveness. One would find approximately the same mixed picture during the 1990s.

Carbon Tax key to soft power. Senator Christopher Dodd April 27, 2007 A corporate carbon tax The Boston Globe
http://www.boston.com/news/globe/editorial_opinion/oped/articles/2007/04/27/a_corporate_carbon_tax/ accessed June 26, 2008 Some argue that corporations would simply pass on costs of a corporate carbon tax to consumers. But in an era where the price of gasoline already jumps 30 to 40 cents in only a few weeks' time, such arguments ring decidedly hollow. You cannot be serious about acting on the urgent threat of global warming, about making us less captive to Middle East oil, or investing in renewable energy, unless you have a corporate carbon tax that eliminates the last incentive to pollute: that it's cheaper. With all we are facing -- from health and environmental concerns to war abroad -- making dirty energy a less attractive option to consumers and business is nothing to be afraid of. But it's particularly attractive because the revenues of a corporate carbon tax can be used to bring the cost of clean energy down. Used to fast-track renewable energy research and development and deployment of clean energy and energy efficient technologies, a corporate carbon tax would generate more than $50 billion annually, helping us get technologies out of the laboratories and onto our roads and into our homes and businesses, jumpstarting America's global competitiveness in the process. But above all else, a corporate carbon tax sends a powerful message: that America will lead the world on climate change, helping polluting countries from developing nations to China take the steps they need to get this crisis under control. With the right leadership, the United States will emerge as that leader. But if the last six years is any indication, it won't happen on its own. It will take choices that are not only tough but smart and a president who is honest with the American people about the stakes. A president who shows us that with the right leadership, America will not suffer by tackling global warming and ridding ourselves of Middle East oil, but prosper. Getting this challenge right comes down to a simple, fundamental belief about America -- that we have always drawn our strength from our unique ability to come together around our best, most innovative ideas in common purpose, making our country and world stronger. With the stakes of global warming so high, the American people are ready to do that again. They're ready to change course -- to move away from polluting energy sources and toward a cleaner future. And with the right leadership, they will be ready for a corporate carbon tax. It's a big idea whose time has come.

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Specifically, soft power is key to solving global problems, specifically terrorism Joseph Nye (Dean of the Kennedy School of Government at Harvard) Boston Globe, April 14, 2002,
http://www.ksg.harvard.edu/news/opeds/nye_unilateralism_bg_041402.htm, accessed 10/15/02
Those who recommend a unilateralist American foreign policy based on such traditional descriptions of American power are relying on woefully inadequate analysis. When you are in a three dimensional game, you will lose if you focus only on the military board and fail to notice the other boards and the vertical connections among them. For instance, as the Bush administration seeks to persuade British Prime Minister Tony Blair to support a campaign against Saddam Hussein in Iraq, the British press reports that Blair has

transnational issues cannot be solved unilaterally or by the use of military power. The good news for Americans is that the United States will likely remain the world's single most powerful country well into this new century. While potential coalitions to check American power could be created, it is unlikely that they would become firm alliances unless the United States handles its hard coercive power in an overbearing unilateral manner that undermines our attractive or soft power. As the German editor Joseph Joffe has written, "unlike centuries past, when war was the great arbiter, today the most interesting types of power do not come out of the barrel of a gun . . . Today there is a much bigger payoff in `getting others
been weakened politically by our recent unilateral impositions of tariffs on European steel imports. And many of these to want what you want,' and that has to do with cultural attraction and ideology and agenda setting . . ." On these measures, China, Russia, Japan, and even Western Europe

The United States could squander this soft power by heavy-handed unilateralism. The bad news for Americans in this three-dimensional power game of the 21st century is that there are more and more things outside the control of even a superpower, such as international financial stability, controlling the spread of infectious diseases, cyber-crime and terrorism. Although the United States does well on the
cannot match the influence of the United States.

traditional measures, there is increasingly more going on in the world that those measures fail to capture. We must mobilize international coalitions to address shared threats and challenges. America needs the help and respect of other nations. We will be in trouble if our unilateralism prevents us from getting it.

Terrorism ensures extinction Yonah Alexander, prof and dir. of Inter-University for Terrorism Studies, Washington Times, August 28, 2003 lexis
Last week's brutal suicide bombings in Baghdad and Jerusalem have once again illustrated dramatically that the international community failed, thus far at least, to understand the magnitude and implications of the terrorist threats to the

very survival of civilization itself. Even the United States and Israel have for decades tended to regard terrorism as a mere tactical nuisance or irritant
rather than a critical strategic challenge to their national security concerns. It is not surprising, therefore, that on September 11, 2001, Americans were stunned by the unprecedented tragedy of 19 al Qaeda terrorists striking a devastating blow at the center of the nation's commercial and military powers. Likewise, Israel and its citizens, despite the collapse of the Oslo Agreements of 1993 and numerous acts of terrorism triggered by the second intifada that began almost three years ago, are still "shocked" by each suicide attack at a time of intensive diplomatic efforts to revive the moribund peace process through the now revoked cease-fire arrangements [hudna]. Why are the United States and Israel, as well as scores of other countries affected by the universal nightmare of modern terrorism surprised by new terrorist "surprises"? There are many reasons, including misunderstanding of the manifold specific factors that contribute to terrorism's expansion, such as lack of a universal definition of terrorism, the religionization of politics, double standards of morality, weak punishment of terrorists, and the exploitation of the media by terrorist propaganda and psychological warfare. Unlike their historical

The internationalization and brutalization of current and future terrorism make it clear we have entered an Age of Super Terrorism [e.g. biological, chemical, radiological, nuclear and cyber] with its serious implications concerning national, regional and global security concerns.
counterparts, contemporary terrorists have introduced a new scale of violence in terms of conventional and unconventional threats and impact.

And, US leadership is essential to prevent global nuclear exchange. Zalmay Khalilzad RAND, Washington Quarterly, Spring, 1995
Under the third option, the United States would seek to retain global leadership and to preclude the rise of a global rival or a return to multipolarity for the indefinite future. On balance, this is the best long-term guiding principle and vision. Such a vision is desirable not as an end in itself, but because a world in which the United States exercises leadership would have tremendous advantages. First, the global environment would be more open and more receptive to American values -- democracy, free markets, and the rule of law. Second, such a world would have a better chance of dealing cooperatively with the world's major problems, such as nuclear proliferation, threats of regional hegemony by renegade states, and low-level conflicts. Finally, U.S. leadership would help preclude the rise of another hostile global rival, enabling the United States and the world to avoid another global cold or hot war and all the attendant dangers, including a global nuclear exchange. U.S. leadership would therefore be more conducive to global stability than a bipolar or a multipolar balance of power system.

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Soft power uniqueness
The United States has lost its position of environmental leadership, which it held at the beginning of the environmental movement Robert Falkner, Lecturer at London School of Economics, 2005, International Studies Review,
accessed June 26, 2008 http://www.blackwell-synergy.com/doi/pdf/10.1111/j.1468-2486.2005.00534.x Ever since the United States took a backseat at the UN Conference on Environment and Development (UNCED) in 1992, US foreign policy has appeared to be lukewarm about, and often hostile to, multilateral environmental policymaking. From the rejection of the Convention on Biological Diversity (CBD) to the withdrawal from the Kyoto Protocol on climate change, the United States has shown itself to be concerned more with national economic interests than global environmental threats. Many observers see this as a fundamental shift away from the US environmental leadership of the 1970s and 1980s. In the early days of global environmentalism, the United States pioneered modern environmental legislation and promoted the creation of global regimes ranging from ozone layer protection to the preservation of threatened species. More recently, however, the US government has repeatedly challenged the need for new environmental treaties; questioned the scientific basis of international regulation; and rejected the notion that precautionary action is warranted in the face of potential ecological dangers. Whereas in the 1970s and 1980s, the United States frequently branded European countries as environmental laggards, it is the European Union (EU) that now claims the mantle of international leadership in sustainable development.

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Environmental leadership links
A Carbon Tax is Key For the Us to Lead The World in Alternative Energy William H. Schlesinger (Professor of Biogeochemistry at duke and Former Dean of the Nicholas
SchoolEarth & Ocean Sciences PhD in BioChemistry, Cornell University, 1976 AB, Dartmouth College, 1972) May 16 20 05, “Carbon Tax Provides Fairest Incentive For Curbing Global Warming” Duke University, accessed: 06/26/08, < http://www.dukenews.duke.edu /2005/05/ carbonta x.html. Conservation and efficiency must both play a role in our attempt to reduce dependence on dwindling production of foreign oil. A carbon tax provides an equal incentive for both pathways to be part of the solution.In the absence of a coherent federal energy policy, various efforts are emerging in individual states to limit carbon dioxide emissions. These are important first steps, but consider the simplicity of a national energy policy based on a carbon tax that would maintain a level playing field in the economic environment across this country. My suspicion is that a national carbon tax will be the easiest way for the United States to participate in international efforts to curb CO2 emissions.Without any national energy policy, the United States is rapidly losing an important role in the development of solar, wind and other alternative energies, like integrated gasification combined cycle. Also known as IGCC, this technology will allow power plants to make electricity from coal while capturing the carbon dioxide emissions that might otherwise lead to global warming. A carbon tax will make such energy sources competitive across this country, and spur new high-tech industries to develop them.We [The United States] need to be the world’s technology leader of the 21st century, not a stubborn follower of our old inefficient ways

Carbon Taxes Are Key to American Energy Leadership The Boston Globe (World Renowned News paper under the New York Times), April 27, 2007, “A
Corporate Carbon Tax”, accessed: 06/26/08, http://www.boston.com/news/ globe/editorial_opinion/oped/articles/2007 /04/27/a_corpo rate_carbon_tax/ But it's particularly attractive because the revenues of a corporate carbon tax can be used to bring the cost of clean energy down. Used to fast-track renewable energy research and development and deployment of clean energy and energy efficient technologies, a corporate carbon tax would generate more than $50 billion annually, helping us get technologies out of the laboratories and onto our roads and into our homes and businesses, jumpstarting America's global competitiveness in the process.But above all else, a corporate carbon tax sends a powerful message: that America will lead the world on climate change, helping polluting countries from developing nations to China take the steps they need to get this crisis under control.With the right leadership, the United States will emerge as that leader. But if the last six years is any indication, it won't happen on its own. It will take choices that are not only tough but smart and a president who is honest with the American people about the stakes. A president who shows us that with the right leadership, America will not suffer by tackling global warming and ridding ourselves of Middle East oil, but prosper.

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Environmental leadership links
Lack of leadership on environmental issues is crippling American hegemony. Increased fuel efficiency standards send a crucial message that reasserts our position Norbert Walter (chief economist at Deutsche Bank Group) “An American Abdication,” August 28, 2002
At present there is much talk about the unparalleled strength of the United States on the world stage. Yet at this very moment the most powerful country in the world stands to forfeit much political capital, moral authority and international good will by dragging its feet on the next great global issue: the environment. Before long, the administration's apparent unwillingness to take a leadership role -- or, at the very least, to stop acting as a brake -- in fighting global environmental degradation will threaten the very basis of the American supremacy that many now seem to assume will last forever. American authority is already in some danger as a result of the Bush administration's decision to send a low-level delegation to the World Summit on Sustainable Development in Johannesburg -- low-level, that is, relative to America's share of both the world economy and global pollution. The absence of President Bush from Johannesburg symbolizes this decline in authority. In recent weeks, newspapers around the world have been dominated by environmental headlines: In central Europe, flooding killed dozens, displaced tens of thousands and caused billions of dollars in damages. In South Asia, the United Nations reports a brown cloud of pollution that is responsible for hundreds of thousands of deaths a year from respiratory disease. The pollution (80 percent man-made) also cuts sunlight penetration, thus reducing rainfall, affecting agriculture and otherwise altering the climate. Many other examples of environmental degradation, often related to the warming of the atmosphere, could be cited. What they all have in common is that they severely affect countries around the world and are fast becoming a chief concern for people everywhere. Nobody is suggesting that these disasters are directly linked to anything the United States is doing. But when a country that emits 25 percent of the world's greenhouse gases acts as an uninterested, sometimes hostile bystander in the environmental debate, it looks like unbearable arrogance to many people abroad. The administration seems to believe it is merely an observer -- that environmental issues are not its issues. But not doing anything amounts to ignoring a key source of world tension, and no superpower that wants to preserve its status can go on dismissing such a pivotal dimension of political and economic -- if not existential -- conflict. In my view, there is a clear-cut price to be paid for ignoring the views of just about every other country in the world today. The United States is jettisoning its hard-won moral and intellectual authority and perhaps the strategic advantages that come with being a good steward of the international political order. The United States may no longer be viewed as a leader or reliable partner in policymaking: necessary, perhaps inevitable, but not desirable, as it has been for decades. All of this because America's current leaders are not willing to acknowledge the very real concerns of many people about global environmental issues. No one can expect the United States to provide any quick fixes, but one would like to see America make a credible and sustained effort, along with other countries, to address global environmental problems. This should happen on two fronts. The first is at home in the United States, through more
environmentally friendly policies, for example greater fuel-efficiency standards for cars and light trucks and better insulation for buildings. The second is international, through a more cooperative approach to multilateral attempts at safeguarding the environment. Simply rejecting international treaties (like the Kyoto Protocol) then failing to offer a better

proposal cannot be an acceptable option for American policymakers. Much of the world has come together to help the United States in the fight against terrorism, out of the realization that a common threat can only be beaten through a cooperative effort. It is high time for the United States, metaphorically speaking, to get out of its oversized, gas-guzzling S.U.V. -- and join the rest of the world in doing more to combat global warming and protecting the planet.

US action to increase efficiency responds to our lack of action and sends a strong message to allies. Paul Roberts (energy expert and writer for Harpers) 2004, The End of Oil, pg. 325
Politically, a new U.S. energy policy would send a powerful message to the rest of the players in the global energy economy. Just as a carbon tax would signal the markets that a new competition had begun, so a progressive, aggressive American energy policy would give a warning to international businesses, many of which now regard the United States as a lucrative dumping ground for older high-carbon

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technology. It would signal energy producers — companies and states — that they would need to start making investments for a new energy business, with differing demands and product requirements. Above all, a progressive energy policy would not only show trade partners in Japan and Europe that the United States is serious about climate but would give the United States the leverage it needs to force muchneeded changes in the Kyoto treaty. With a carbon program and a serious commitment to improve efficiency and develop clean-energy technologies, says one U.S. climate expert, “the United States could really shape a global climate policy. We could basically say to Europe, ‘Here is an American answer to climate that is far better than Kyoto. Here are the practical steps we’re going to take to reduce emissions, far more effectively than your cockamamie Kyoto protocol.”’

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Generic soft power links
The United States’ global power is contingent upon the long-term status of its image. Matthew Fraser, Doctorate in political science from Institut d'Etudes Politiques de Paris, former Editorin-Chief of National Post, 2003
Weapons of Mass Distraction: Soft Power and American Empire, Pages 9-13 The central thesis in the pages that follow may seem outlandish, controversial, and provocative. It will be argued here that, while U.S. military and economic power is indispensable to America's superpower status, soft power historically has been a key strategic resource in U.S. foreign policy. During the First World War, one of America's most powerful ambassadors was Charlie Chaplin. When the Second World War broke out two decades later, Mickey Mouse and Donald Duck conducted Disneyland diplomacy to spread American values throughout the world. Today, in the Information Age of the Internet, soft power has become increasingly instrumental in the emerging world order dominated by an American Empire.The notion of "empire" is admittedly contentious, even among American leaders. President George W. Bush declared: "America has no empire to extend or utopia to establish." And yet, when President Bush demonstrated the awesome force of American hard power against despicable regimes in Afghanistan and Iraq, it suddenly became fashionable to discuss, even if disapprovingly, America's imperialist ambitions. When U.S. bombs obliterated targeted sections of Baghdad, the United States was referred to as a "smart-bomb imperium." Despite claims that America is a reluctant hegemon, the new global reality of a Pax Americana is a fact that cannot easily be contradicted. Today, no nation disputes America's status as the planet's sole superpower. Recognition of America as a "hyperpower" is usually based on material facts—specifically, the superiority of American hard power. Yet America's global domination has been achieved largely through non-military means—in short, through the extension, assertion, and influence of its soft power. If hard power, by definition, is based on facts, soft power is based on values. American hard power is necessary to maintain global stability. American soft power— movies, pop music, television, fast food, fashions, theme parks—spreads, validates, and reinforces common norms, values, beliefs, and lifestyles. Hard power threatens; soft power seduces. Hard power dissuades; soft power persuades. Ironically, many Americans are only vaguely aware of the global impact of U.S. soft power. Yet America's adversaries have never underestimated its effects.

US living up to its prior rhetoric is vital to global leadership Fareed Zakaria, (Lead editor of Newsweek and renowned author on American Hegemony), May 17th 2008, "Geopolitics", Newsweek, Lexis, date accessed: June 24 2008
And while much of the data in the book has been catalogued and discussed elsewhere (such as Parag Khanna's The Second World), Zakaria's strength lies not in striking new ground but in offering a lens through which to understand the American role in a globalized world.Zakaria argues that it is time for the U. S. to abandon its hyperpower ambitions and instead learn to act as an "honest broker" -- a referee of sorts -- between the powers that may one day overtake it (much as Britain has done). He suggests that America's most vital export will be the ideals upon which the country is founded -- ideals that can form a kind of hub around which the rest of the world can gather -- but only if Americans themselves are committed to live by those same ideals, regardless of whatever threats they may face.

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A2: States CP
Federal government key. Franz T. Litz, Esq., Senior Fellow, world resources institute, Prepared for the Pew Center on Global
Climate Change, “toward a constructive dialogue on federal and state roles in u.s.climate change policy” June 2008 The Arguments for Federal Action There are, of course, reasons some climate change policies might be better effectuated at the federal level, notwithstanding the states’ important roles as first movers, policy innovators and on-theground implementers. Among the reasons are the broader coverage of a federal program, the ability to level the competitive playing field for citizens and businesses, and the ultimate need for coherent and comprehensive national and international action. Indeed, many state leaders have themselves made these arguments to advocate—and sometimes even to sue the federal government to compel—national action. The Challenge Demands All 50 States. A federal program guarantees coverage across all 50 states. In contrast, an approach that relies solely on state actions leaves substantial gaps in program coverage. Not all states have acted to meaningfully tackle climate change. Even among those states that have acted, there are differences in the scope and stringency of their policies. A federal program would bring all 50 states into the climate change effort. Federal
Action Levels the Playing Field. A federal program would tend to level the playing field for businesses in all 50 states. Although the state laboratories of democracy produce useful policy products, they also present a more difficult environment for

companies doing business in multiple states. Those companies must contend with different rules and regulations, which presents competitiveness issues. In addition, the potential for emissions “leakage”—the result of
shifts in production from areas with stringent policies to areas without policies—is greater in an environment where some states act and some do not.

Federal action key to international cooperation and negotiation leverage. Franz T. Litz, Esq., Senior Fellow, world resources institute, Prepared for the Pew Center on Global
Climate Change, “toward a constructive dialogue on federal and state roles in u.s.climate change policy” June 2008 Federal Action as Platform for International Engagement. Even a large number of states enacting comprehensive climate change action plans cannot alone solve the global climate change problem. Ultimately, the challenge will be to effect change throughout the United States, as well as cooperative action from the major emitting countries of the world. A comprehensive federal climate action program would put the United States in a position to engage the rest of the world in negotiations to ensure effective international climate action. Absent federal action, successful international negotiations resulting in significant and sustained emissions reductions are unlikely.

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A2: States CP
Federal action is the only way to prevent a slew of commerce clause challenges. Robert B. McKinstry, Jr., Esq., Maurice K. Goddard Professor of Forestry and Environmental Resources Conservation, The Pennsylvania State University, Penn State Environmental Law Review, Winter 2004
lexis
The absence of federal action also presents certain legal constraints to some forms of state action. These constraints arise from both the federal Constitutional restrictions applicable to states and a variety of state constitutional law constraints inapplicable to federal action. Possible federal constraints on state action arise from three sources. First, innovative state programs will likely face challenges based upon the contention that they will interfere with interstate commerce in contravention of the restrictions on state action under the "dormant" commerce clause restrictions, n309 particularly where the state attempts to deal with attempts to escape controls by switching production to other states. Second, attempts to forge interstate and international cooperation, through mechanisms such as the Climate Change Action Plan may face challenges based upon the compacts clause of the Constitution. n310 Finally, these programs may face challenges based on the contention that federal laws preempt state action under the Supremacy Clause of the Constitution, n311 particularly [*68] where measures attempt to capture mobile source n312 emissions where the Clean Air Act n313 or the corporate average fuel economy standards n314 may apply. State attempts to create regulatory programs or taxes affecting interstate commerce have repeatedly been subject to challenges based upon the premise that these unilateral state actions unconstitutionally "discriminate against commerce under the restrictions imposed by the "so-called" dormant commerce clause. n315 State tax and regulatory programs that regulate even-handedly and that either do not discriminate against interstate commerce or advance a legitimate state purpose that could not [*69] be advanced by a less discriminatory alternative will withstand scrutiny under the commerce clause. n316 Most regulatory and tax programs designed to limit greenhouse gas pollutant emissions within a state could readily withstand such challenges. However, given the contribution by utilities to greenhouse gas emissions and the many recent experiments in allowing competition in electric generation, states will need to adopt measures to assure that out-of-state sources face equal restrictions or costs if they also wish to maintain an equal playing field for in and out-of-state electricity generators and to prevent generators from fleeing to other states to avoid controls. Such measures may make the state programs more vulnerable to a commerce clause challenge. Programs to maintain an equal playing field for utilities may withstand commerce clause scrutiny, because Congress has authorized extensive state monopoly regulation. n317 The challenges should pass muster if they are properly designed to maintain a level playing field, although the concept of what constitutes a level playing field, as opposed to an unfair advantage to local generators, may be decided by the predilections of the judges hearing the case or the skill of the attorneys in framing the issues. Congress could resolve these difficulties by either adopting a comprehensive federal program or specifically authorizing comprehensive state regulation. n318 It is also possible that the voluntary state agreements to cooperate on climate change, such as the Climate Action Plan or the plan by California, [*70] Oregon, and Washington to cooperate on addressing climate change, could be subject to a challenge based on the contention that state cooperation in the absence of Congressional authorization contravenes the compacts clause of the Constitution. n319 The wholly voluntary nature of the current arrangements makes the likelihood of such a challenge succeeding remote. Such voluntary arrangements do not require Congressional approval under the compacts clause. n320 Nevertheless, the compacts clause will limit the enforceability of these relationships, absent federal action. The most serious limitation on enforceable state programs to limit GHG pollution emissions is created by federal preemption of state regulation of mobile source air pollution emissions under two statutes, the federal Clean Air Act and the federal law establishing corporate average fuel economy standards. Preemption arises in two situations. A state law will be preempted where Congress has evidenced an intent to displace state law in an area altogether, either through express preemption or by implication. Preemption also arises upon a showing that there is an actual conflict between the federal standard and the state standard. n321 There would be no actual conflict between state regulatory initiatives to address climate change and federal law, given the requirements of the Framework Convention and the federal failure to implement these requirements. However, there are two sources of express preemption which could seriously impair the states' ability to affect emissions from the transportation sector. Specifically, the Clean Air Act expressly preempts most state regulation of vehicle emissions standards. n322 The federal corporate average fuel economy ("CAFE") act n323 preempts state regulations "related to fuel economy standards or average fuel economy standards for automobiles." n324 These provisions will pose barriers to most states' attempts to regulate emissions from the transportation sector, which represents a major and growing source of GHG emissions. Although [*71] these provisions do not constrain California to the extent other states are constrained, California's attempt to regulate mobile source emissions through regulatory controls has already encountered challenges based upon claims of preemption, and it, like other states, may need to consider implementing a different model for addressing the transportation sector.

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A2: States CP
State law restrictions make uniformity impossible. Fiating through these laws causes rollback. Robert B. McKinstry, Jr., Esq., Maurice K. Goddard Professor of Forestry and Environmental Resources Conservation, The Pennsylvania State University, Penn State Environmental Law Review, Winter 2004
lexis state programs can still run afoul of idiosyncratic state constitutional and statutory restrictions, which would not apply to a federal program. For example, in Pennsylvania, use of a tax to capture mobile sources in a state program would need to comply with the requirements of that state's uniformity clause n336 that all taxes be uniform and a state constitutional limitation on uses of taxes on products used by automobiles. n337 Although a greenhouse gas pollution emission tax can likely be crafted that will be consistent with or avoid these restrictions, one can never predict with confidence how courts will decide an issue of first impression. Moreover, many state laws prohibit state restrictions that are more stringent than federal restrictions, raising questions as to whether, how, and the extent to which these states can address greenhouse gas emissions in the absence of a federal mandate. A federal program with mandatory elements would not be hindered by and would overcome many possible state law restrictions.
Finally,

State-laboratory arguments support federal action now – it’s the only way to guarentee clarity and international solvency. Robert B. McKinstry, Jr., Esq., Maurice K. Goddard Professor of Forestry and Environmental Resources Conservation, The Pennsylvania State University, Penn State Environmental Law Review, Winter 2004
lexis
Perhaps even more importantly, the experiences gained in the state and private laboratories will inform both the states that have already acted and states that have not in crafting state implementation plans and state regulatory responses. These experiences will also assist industry in achieving compliance with the program ultimately implemented by

the federal government, whether through regulatory initiatives under existing regulation or new legislation. Nevertheless, without federal certainty and a federal floor, progressive and multi-national industries, states, and localities alike, are likely to suffer, along with the global environment.

Only strong political leadership can maximize the effectiveness of carbon taxes. Inho Choi, S.J.D., LL.M., The George Washington University Law School, Natural Resources Journal, Fall 2005 lexis
Emissions trading or pollution taxes can work well in the context of global climate change. Sources of CO2 emissions are ubiquitous. Because of significant cost variations, trading between both high- and low-cost sources presents a real opportunity to maximize efficiency gains. Fortunately, there is no significant problem with monitoring carbon emissions because the carbon content of a fossil fuel can be used as a proxy for expensive real-time monitoring. These and other factors clearly indicate that flexibility mechanisms should be employed as a viable policy tool to achieve a carbon reduction goal in a cost-effective manner. The fact that carbon capture and sequestration are not yet commercially viable confirms the need for pursuing sustainable energy development: promoting energy conservation and efficiency, and the development and commercial deployment of cleaner, more efficient energy sources and technologies. Future climate change law will help to achieve these goals in a way that current U.S. environmental and energy law have not. These goals are achievable because effective carbon control policy will raise fuel prices and, thus, increase the economic value of energy efficiency and conservation. As a consequence, entry barriers to clean energy technologies will be cleared and technological innovation will be spurred by the elimination of implicit subsidies for existing dirty sources. The key to success is strong political leadership with the wisdom and courage to tell the truth to and persuade the American public about the need for prompt action on climate change.

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A2: States CP
Carbon tax is a burden-offset charge. Eben Albert-Knopp, Vermont Law Review, “The California Gas Charge and Beyond: Taxes and Fees in a Changing Climate” Fall 2007 p. ln
A further subset of regulatory fees, burden-offset charges, addresses the burdens imposed by individual actors on the whole of society. n59 In many situations, an actor's behavior creates a burden that is shared equally by many people. Climate change is a classic example, where the act of driving a car creates air pollution that is widely dispersed. n60 Economists term these situations "externalities," since the costs of the activity are borne externally by the public at large. n61 While consumers pay for the gasoline they consume, they are not forced to pay for the costs of air pollution to the rest of society. n62 Burden-offset charges are designed to simultaneously reduce the offensive activity and to help offset the costs to society-thereby internalizing the external costs. n63

State burden-offset charges are struck down by the courts. Eben Albert-Knopp, Vermont Law Review, “The California Gas Charge and Beyond: Taxes and Fees in a Changing Climate” Fall 2007 p. ln
Looking beyond California, there is great potential for gasoline charges to be successfully implemented in other states and at the federal level. Unfortunately, the tax-versus-fee discussion in many jurisdictions has devolved into a confusing array of interpretations that threaten to suffocate the simple practicality of Head Money, as modern courts have supplemented the Head Money criteria with a number of other factors. n104 While some of these factors have proven useful in certain contexts, others seem generally puzzling, while still others confuse completely the nature of taxes and fees and the underlying policies of each. Moreover, there appears to be little rhyme or reason in courts' application of the factors. Particularly troublesome is the lack of a developed distinction between the varying types of user fees, as courts often present the binary choice of tax or fee. Consequently, by applying the same requirements to all types of user fees, some courts have struck down certain types of user fees, notably burden-offset charges.

States would be struck down by the user-benefit test. Eben Albert-Knopp, Vermont Law Review, “The California Gas Charge and Beyond: Taxes and Fees in a Changing Climate” Fall 2007 p. ln
Some courts have required that a fee provide a particularized benefit to the fee payer. This is an even more problematic factor. In Bolt v. City of Lansing, the Supreme Court of Michigan considered whether a user charge provided a particularized benefit in the context of a charge on storm water run-off generated by parcels of land. n129 The fee was assessed in order to implement a combined sewer overflow control program, which sought to reduce the discharge of untreated wastewater which had previously occurred during periods of heavy precipitation. n130 The Michigan court noted that "[a] proper fee must reflect the bestowal of a corresponding benefit on the person paying the charge, which benefit is not generally [*236] shared by other members of society." n131 The court concluded that the storm water charge would benefit the public at large and would not provide any specific service to the affected property owners. n132 Thus, the court held: "[T]he lack of correspondence between the charges and the benefit conferred demonstrates that the city has failed to differentiate any particularized benefits to property owners from the general benefits conferred on the public." n133 Admittedly, gasoline charges provide little in the way of a particularized benefit to the fee payer. One tenuous argument for a particularized benefit is that research into alternative fuels and automobile efficiency will ultimately lower the transportation costs for present-day gasoline consumers. However, the group of future consumers who will enjoy this benefit is likely to be both over- and under- inclusive of present-day drivers. Furthermore, the creation of incentives for alternative fuels will benefit only those consumers who use such fuels and not the consumers of standard gasoline on which the fee is levied. On the whole, then, gasoline charges probably would not survive in a court that adheres strictly to the particularized-benefit test.

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A2: Backstopping
No spare capacity - carbon taxes necessary to ease pressure. The Times (London), Carl Mortished, International Business Editor, “Energy crisis cannot be solved by renewables, oil chiefs say” June 25, 2007 lexis
The world is blinding itself to the reality of its energy problems, ignoring the scale of growth in demand from developing countries and placing too much faith in renewable sources of power, according to two leaders of the global energy industry. The chief executive of Royal Dutch Shell Enhanced Coverage Linking Royal Dutch Shell today calls for a "reality check". Writing in The Times, Jeroen van der Veer Enhanced Coverage Linking Jeroen van der Veer takes issue with the widespread public opinion that green energy can replace fossil fuels. Shell's chief gives warning that supplies of conventional oil and gas will struggle to keep pace with rising energy demand and he calls for greater investment in energy efficiency. Instead of a great conversion to wind power and solar power, Mr van der Veer predicts, the world will be forced into greater use of coal and much higher CO2 emissions, "possibly to levels we deem unacceptable". Alternative energy sources, such as renewables, will not fill the gap, says Mr van der Veer, who forecasts that even with major technological breakthroughs, renewables could account for only 30 per cent of energy supply by the middle of the century. "Contrary to public perceptions, renewable energy is not the silver bullet that will soon solve all our problems," he writes. The warning from Royal Dutch Shell Enhanced Coverage Linking Royal Dutch Shell coincides with a critique of public energy policy by Rex Tillerson, Enhanced Coverage Linking Rex Tillerson, the chief executive of ExxonMobil. Enhanced Coverage Linking ExxonMobil. Speaking at the Royal Institute for International Affairs in London, Mr Tillerson pointed to a widespread failure by policymakers to understand the extent to which the aspirations of people in developing countries are fuelling growth in demand for energy. Mr Tillerson said that world energy demand would rise by 45 per cent by 2030, and

fossil fuels -oil, natural gas and coal -were the only energy sources of sufficient size, adaptability and affordability to meet the world's needs. Mr van der Veer casts doubt today on the oil and gas industry's ability to keep up
with accelerating demand. "Just when energy demand is surging, many of the world's conventional oilfields are going into decline," he writes. Although there is no shortage of oil and gas in the ground, Mr van der Veer says, the industry currently lacks the technology to recover even half of that resource. Mr Tillerson, speaking at Chatham House, expressed doubts about the oil

industry's ability to raise its game significantly without access to the oil reserves of the Opec countries of the Middle East. "The supply outlook for non-Opec countries will be modestly up or flat," Mr Tillerson
predicted. He was sceptical about the drive by governments to increase use of biofuels and said that a fifth of America's corn crop was being used to produce four billion gallons of ethanol, compared with targets of 12 billion gallons by 2012. The ExxonMobil

Enhanced Coverage Linking ExxonMobil chief criticised the EU's carbon trading system, calling it an administratively complex system that lacked transparency and failed to deliver a uniform and predictable cost of carbon. "It's all about moving the money around," he said. Mr Tillerson said he would prefer a carbon tax that would enable the cost of carbon to spread through the economy in a uniform way, letting governments use the revenues to mitigate its effect by reducing employment or income taxes.

OPEC will not flood the market. The Globe and Mail (Canada), Shawn McCarthy, global energy reporter, March 7, 2008 lexis
But Adam Sieminski, an energy economist at Deutsche Bank AG in New York, said he is becoming increasingly skeptical of his firm's official forecast that oil will fall to $80 in the spring. "Every one who has tried to bet against this market to the down side - unless they are very nimble - has lost money," he said. The Deutsche Bank analyst said the slowdown in demand is not severe enough to puncture the buoyant mood. At the same time, there is little spare production capacity of light sweet crude and virtually no additional refining capacity. "The markets are horribly vulnerable to anything that goes wrong, anywhere in the system," he said. Should the market weaken, he added, OPEC members appear determined to cut production to defend the price at a much higher level than was previously the case. "OPEC is getting used to higher incomes and would be more willing to defend a much higher price than what we would have thought before," he said.

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A2: Oil prices high
Prices will fall next year. Inside F.E.R.C.'s Gas Market Report, December 28, 2007 lexis
An impending downward correction in the oil market will depress natural gas prices in 2008, OPPENHEIMER analyst Fadel Gheit predicted on December 19. "Oil prices are inflated by excessive speculation about potential supply disruptions in the event of a military action against Iran," Gheit said in a note to clients. "The current oil bubble could burst on weak demand caused by economic slowdown, an end to the stalemate with Iran, and government action to rein in speculation." Gheit, who testified last week in front of a congressional subcommittee looking into excessive speculation in the oil markets, said crude prices "are inflated by more than $40/barrel as the surge in prices in the last six months was not justified by lack of supplies or surprising increase in demand." Assuming oil prices retreat and gas storage levels remain at historical highs, Gheit said gas prices should fall next year, though he didn't make any specific projections. "If it were not for the record oil prices, gas prices would be well below their current levels," he wrote.

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A2: Economy DA
Business prefer national preemption to guarentee regulatory certainty. Business Week, “Climate Wars: Episode Two” April 23, 2007
http://www.businessweek.com/magazine/content/07_17/b4031094.htm Companies find it's no longer worth arguing this point. They're coming to the bargaining table for many reasons beyond the
science. On Apr. 2 the U.S. Supreme Court ruled that the Environmental Protection Agency can regulate CO2 as a pollutant. That could bring legal challenges and EPA-imposed mandatory curbs. "The fear that the next Administration's EPA would

have its hand on the lever is a great motivator," says Natural Resources Defense Council attorney David D. Doniger. Plus, a growing patchwork of state carbon-emissions limits has prompted industries to push for a preemptive national law. And as energy executives face decisions, such as what kind of power plants to build for the next 40 years, they want regulatory certainty. Despite the tough road ahead, proponents of action inside companies are thrilled that the policy fight has finally begun. "We are long past debating the science," said Entergy CEO J. Wayne Leonard in a recent speech. Waiting for stronger evidence is "the equivalent of bleeding out of every orifice of your body and hearing your doctor say: 'Before we rush to judgment, let's wait until all the facts are in'--meaning your autopsy."

Carbon taxes key to the economy. Juliet Eilperin and Steven Mufson, Washington Post, “Tax on Carbon Emissions Gains Support” April 1, 2007
"We want to do the least damage to the growth of GDP," said Michael Canes, a private consultant and former chief economist for the American Petroleum Institute, who led a Capitol Hill briefing on the subject in late February sponsored by the conservative George C. Marshall Institute. Between a cap system and a carbon tax, "a carbon tax will be the much more cost-effective way to go," he said, though he added that there are other ways to reduce emissions. Robert J. Shapiro, a private consultant who was a Commerce Department official in the Clinton administration, agrees. A cap-and-trade system -- involving plant-by plant-measurements -- would be difficult to administer, he said, and would provide "incentives for cheating and evasion." And the revenue from a carbon tax could be used to reduce the deficit or finance offsetting cuts in payroll taxes or the alternative minimum tax. A carbon tax offers certainty about the price of polluting, which appeals to many economists and businesses. William A. Pizer, a senior fellow at the centrist think tank Resources for the Future and a former senior economist for President Bush's Council of Economic Advisers, estimates that the benefit-to-cost ratio of a tax-based system would be five times that of a cap-and-trade system.

Revenues would mitigate the economic costs. Kenneth P. Green, resident scholar, Steven F. Hayward, F. K. Weyerhaeuser Fellow, and Kevin A. Hassett, senior fellow and director of economic policy studies at AEI, American Enterprise Institute, "Climate Change: Caps vs. Taxes" June 2007
* Mitigation of General Economic Damages. As energy is one of the three most important variable inputs to economic production (along with labor and capital), raising the cost of energy would undoubtedly result in significant economic harm. Using the revenues generated from a carbon tax to reduce other taxes on productivity (taxes on labor or capital) could mitigate the economic damage that would be produced by raising energy prices. The most likely candidates for a carbon tax tradeoff would be the corporate income tax (the U.S. rate is currently among the highest in the industrialized world) and payroll taxes, the latter of which would lower the cost of employment and help offset the possibly regressive effects of higher energy prices on lower-income households. But across-the-board income tax rate cuts and further cuts in the capital gains tax could also be considered. Few other approaches offer this potential. Regulatory approaches such as increasing vehicle efficiency standards do not because they mandate more expensive technologies and allow the costs to be passed on to consumers without offsets (unless they are subsidized), in which case it is the general taxpayer whose wallet shrinks. Emissions-trading would allow for this if one auctioned all initial permits and used the revenue to offset other taxes. The vast majority of trading systems, however, begin with the governing entity distributing free emission credits to companies based on historical emission patterns rather than having an open auction for permits that would produce such revenue streams. Without an auction, the revenues in a trading scheme accrue only to private companies that trade in carbon permits, while the companies buying permits would pass the cost on to consumers. International emissions-trading approaches such as Kyoto's clean development mechanism are worse still: the beneficiaries of the scheme are likely to be foreign governments or private entities that can reduce (or pretend to reduce) carbon emissions more efficiently, leaving Americans with higher energy prices and no revenue stream to offset the negative impacts on productivity.

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Carbon tax stabilizes the structural threat from the budget deficit Richard J. Pierce, Jr (Professor of Law, George Washington University) Summer 2007 "ENERGY
INDEPENDENCE AND GLOBAL WARMING' Environmental Law (Lexis-Nexis) Nordhaus also points out a globally-coordinated carbon tax has the additional advantage of responding to each nation's fiscal needs. n38 This is a particularly important advantage to the United States. The Federal Reserve Board has identified our present large structural budget deficit as our most serious long-term economic problem. n39 No one knows how much longer we can sustain our present level of deficit spending, but everyone agrees we must reduce the deficit soon. That can be accomplished only through some combination of increased taxes and reduced spending. A large carbon tax would allow us to get our fiscal house in order without having to make the politically and economically painful decisions to increase income taxes or reduce spending. Many politicians and business leaders prefer a cap and trade system to a carbon tax, but those preferences are based on dubious reasoning. Many politicians prefer cap and trade because it allows them to avoid the dreaded "t" word. They either do not realize, or prefer to ignore, the reality that cap and trade imposes a "tax" that is functionally identical to a carbon tax. Either mechanism can be effective only by increasing the price of carbon-dioxide emitting activities by the same large amount. The difference lies in the identity of the entities receiving the increased revenues attributable to that price increase. In the case of a carbon tax, governments receive those revenues. In the case of a cap and trade system, the holders of the emissions permits receive the added revenues. n40 That, of course, is why many business leaders favor cap and trade. They hope to obtain massive additional revenues attributable to the emissions permits the government allocates to them. By now, the extreme difficulty of the political task of persuading citizens and politicians all over the world to agree to take the actions needed to respond effectively to global warming is clear. When President Clinton attempted to persuade Congress to enact a Btu tax that would have added only a few pennies to the cost of hydrocarbons, his proposal was pronounced dead on arrival in the Senate. n41 It is hard to imagine what it would take to persuade Congress and the public to accept a carbon tax that would have to [*602] be at least twenty times the magnitude of the Clinton proposal to be effective. And, a carbon tax is the least expensive means of responding effectively to global warming. A cap and trade system would be more expensive, and a command and control system would be much more expensive.

Taxes good for economy: 4 reasons Barrett and Hoerner (James and J. Andrew, economists for the Economic Policy Institute and the Center for a Sustainable Economy, “Clean Energy and Jobs”, Feb 02, online:
http://www.epi.org/studies/cleanenergyandjobs.pdf, acc: 06/24/08) Overall, the results suggest four conclusions. First, the economic costs and benefits of a climate and energy policy depend critically on elements of the policy design. Specifically, costs are reduced and benefits enhanced by returning the revenue from carbon/energy charges through cuts in other taxes, and through more rapid introduction of new energy technologies; these two policies together can yield a net economic benefit. Second, the combination of technology promotion and well-designed policies to offset competitive burdens can reduce the harm to most energy-intensive industries to low or negative levels. Third, consumers and income distribution need not be harmed and can even benefit. Finally, substantial compensation can be provided to affected workers and industries without negating the general economic benefit.

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Carbox taxes cut emissions without economic harm
Gwladys Fouché 4/29/2008 “Sweden's carbon-tax solution to climate change puts it top of the green list” http://www.guardian.co.uk/environment/2008/apr/29/climatechange.carbonemissions Date Accessed: 6/23/2008 If there's a paradise for environmentalists, this Nordic nation of 9.2 million people must be it. In 2007 Sweden topped the list of countries that did the most to save the planet - for the second year running according to German environmental group, Germanwatch. Between 1990 and 2006 Sweden cut its carbon emissions by 9%, largely exceeding the target set by the Kyoto Protocol, while enjoying economic growth of 44% in fixed prices. Under Kyoto, Sweden was even told it could increase its emissions by 4% given the progress it had already made. But "this was not considered ambitious enough," explains Emma Lindberg, a climate change expert at the Swedish Society for Nature Conservation. "So parliament decided to cut emissions by another 4% [below 1990 levels]. The mindset was 'we need to do what's good for the environment because it's good for Sweden and its economy'." The main reason for this success, say experts, is the introduction of a carbon tax in 1991. Swedes today pay an extra 2.34 kronor (20p) per litre when they fill the tank (although many key industries receive tax relief or are exempted). "Our carbon emissions would have been 20% higher without the carbon tax," says the Swedish environment minister, Andreas Carlgren. "It was the one major reason that steered society towards climate-friendly solutions," reckons Lindberg. "It made polluting more expensive and focused people on finding energyefficient solutions." "It increased the use of bioenergy," concurs Professor Thomas B Johansson from the University of Lund, a former director of energy and climate at the UN Development Programme. "It had a major impact in particular on heating. Every city in Sweden uses district heating [where steam and hot water are piped to a building in a particular area]. Before, coal or oil were used for district heating. Now biomass is used, usually waste from forests and forest industries." Another reason is that, paradoxically, energy consumption remained relatively stable at a time of high economic growth. "Non-energy-intensive industries, such as the service sector, grew more in Sweden, compared to energy-intensive industries, such as paper mills," states Johansson. Sweden also became conscious of its dependency on fossil fuels early on, after the oil shocks of the 70s. "The country switched in the 80s to direct electric heating and in recent years increasingly uses heat pumps, which uses two-thirds less electricity to heat. People were also helped with subsidies to substitute," says Johansson. And Swedes were perhaps environmentally aware at an earlier time than most. "The general public concern in terms of climate change really arose in the mid80s. The authorities were very active in the creation of the Intergovernmental Panel on Climate Change in 1988," reckons Johansson. "There was a real wish to turn Sweden into a leading environmental country," agrees Lindberg. "And Swedes are proud that their country is leading on environmental issues." Today, environmental measures are common throughout the country. Take Linköping, Sweden's fifth biggest city, which is running its fleet of buses and rubbish lorries, a train line and some private taxis on biogas, from methane produced from the entrails of slaughtered cows. Similarly, Stockholm's central station is planning to harness the body warmth of 250,000 daily commuters to produce heating for a nearby office block. The body heat would warm up water that would in turn be pumped through pipes over to a new office block. And King Carl Gustaf XVI last month had all the lights at royal castles turned off for an hour to back an energy efficiency campaign. But not all is fine and dandy. Swedes are in love with their gas-guzzling estate cars, and are among the worst vehicle polluters in the EU. Environmentalists are also concerned that the authorities' green enthusiasm is waning. "[Swedish PM] Fredrik Reinfeldt is pushing within the EU for more emphasis on flexibility, ie that a larger proportion of carbon cuts should be done outside of the EU than inside," says Lindberg which, she argues will not help the EU decrease its emissions enough to meet the target of limiting the Earth's temperature to less than two degrees Celsius. The environment minister dismisses the claim, arguing that flexibility is the most-efficient way to reduce emissions at the European level and that it will help technology transfers to developing countries. More broadly, is there anything Britain could learn from Sweden? "Homes have virtually no insulation in Britain. You could do a lot just by doing more of that," says Johansson. "When a building is renovated in Sweden, it can be properly insulated and renovated, cutting energy consumption by at least half." "Impose a carbon tax," suggests Lindberg. "You would make it more attractive financially to go for green solutions than for carbon options." "A carbon tax is the most cost-effective way to make carbon cuts and it does not prevent strong economic growth," adds Carlgren.

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Taxes better than picking a technology Pearce (David, writer for The Economic Journal, Jul 91, “The Role of Carbon Taxes in Adjusting to
Global Warming”, online: http://www.jstor.org/stable/2233865?seq=2, acc: 6/23/08) Carbon taxes act as a continuous incentive to adopt ever cleaner technology and energy conservation. Standards tend to be 'technology-based', and therefore encourage technology switches up to the point judged by the regulator to be the 'best available'. But, unless standards are continually revised and set slightly above the best available technology, there is no incentive for the polluter to go beyond the standard. A tax, on the other hand, is always present as long as carbon-based fuels are used. There is some evidence to suggest that this dynamic efficiency aspect of environmental taxes is important (Tietenberg, I990). In the CO2 context, dynamic efficiency takes on an extra dimension because, unlike, say, sulphur, CO2 is difficult to dispose of even if it is removed from stack gases. Proposals include injecting the 'captured' CO2 in gas or oil fields, or to the deep ocean. Incentives to develop disposal technologies are therefore of particular relevance.

Carbon tax is vital to make smaller incentives work Carbontax.org, May 23, 2008; http://www.carbontax.org/introduction/#cap-and-trade 6/24/08
A carbon tax must be the central mechanism for reducing carbon emissions. Currently, the prices of gasoline, electricity and fuels in general include none of the costs associated with devastating climate change. This omission suppresses incentives to develop and deploy carbon-reducing measures such as energy efficiency (e.g., high-mileage cars and high-efficiency heaters and air conditioners), renewable energy (e.g., wind turbines, solar panels), low-carbon fuels (e.g., biofuels from high-cellulose plants), and conservation-based behavior such as bicycling, recycling and overall mindfulness toward energy consumption. Conversely, taxing fuels according to their carbon content will infuse these incentives at every chain of decision and action — from individuals’ choices and uses of vehicles, appliances, and housing, to businesses’ choices of new product design, capital investment and facilities location, and governments’ choices in regulatory policy, land use and taxation. A carbon tax won’t stop global climate change by itself — other, synergistic actions are required as well. But without a carbon tax, even the most aggressive regulatory regime (e.g., high-mileage cars) and “enlightened” subsidies (e.g., tax credits for efficiency and renewables) will fall woefully short of the necessary reductions in carbon burning and emissions.

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Carbon Tax is key to market based environmental choices. by Clive Crook, editor, 06/22/08, http://www.ft.com/cms/s/0/5f9f9f96-4060-11dd-bd480000779fd2ac,s01=1.html, 06/23/08 The US constitution makes it difficult for politicians to do much (except fight wars) and this avoids a lot of damage that would otherwise result. But now and then some intelligent policymaking is needed, and energy is again a case in point. Nowadays most Americans want to see action on global warming. Sensing the mood, both presidential candidates advocate a cap-and-trade approach to reducing carbon emissions. However, a carbon tax is needed. So the candidates must cater to that appetite as well. The US does not know whether to tax energy or subsidies it, promote domestic oil production or forbid it, treat ExxonMobil and Chevron as champions or pariahs. So it does all of the above. Instead, it should eradicate these costly actions by simply using a carbon tax. What it knows for sure is that it wants energy security, energy independence and clean air. Mr Obama has lately been pandering to the anti-business sentiment that blames $4-a-gallon petrol on Big Oil and oil-market speculators. It is true, of course, that oil companies are enjoying a profit windfall from the oil price spike. It is also true, or plausible, that futures trading has driven spot prices above their market equilibrium. But these are not the main drivers of the oil price – nor for that matter is the high price of oil a bad thing, if you care about climate change. Done right, a surtax on oil company windfall profits is defensible – as long as one admits it would deter future investment and that working out what “reasonable profit” means would open a can of worms better left closed. The main thing, though, is that it would do less than nothing to cut the price of petrol. It is a sideshow. Like Obama, McCain has a point. The present ban on offshore drilling is a mistake – just as it would have been a mistake for Britain to ban production in the North Sea. If oil can be extracted profitably and with appropriately strict environmental safeguards from offshore wells (or, for that matter, from the Arctic National Wildlife Refuge, which Mr McCain still wants to protect), well and good. The only reason to extract oil is because it is a valuable resource that would otherwise be wasted and that diversifying US oil supplies has some benefit, not that it would lower the price of petrol. New oil would take years or even decades to come on stream. So the amount is decreasing anyway. When the new supplies arrive, they will most likely have no more than a marginal effect on the world market price. The US has a compelling economic and geopolitical interest in curbing both its use of oil, especially oil imported from unstable suppliers, and its emissions of greenhouse gases. The right thing is to pursue in a carbon tax. If ever there were a case for the maxim, get prices right, this is it. The way to curb carbon emissions is to add the environmental cost of carbon to the price of energy. The current oil price offers a good opportunity: when it falls (as it probably will) a carbon tax could be used to set a floor, making the transition to correctly priced energy much easier. Once the price of energy is right, other decisions become simpler, or can be left mainly to the market. There is no need to legislate fuel economy standards or subsidise conservation and low-carbon forms of energy; no need for an emissions trading regime, with all the waste and complexity and gaming that that entails (witness Europe’s experience); no need to scapegoat oil companies or environmentalists; no need to mislead or pander. For sure, the politics is a challenge – but not, I am willing to bet, as hard as conventional wisdom insists. Carbon is bad: tax it and use the money to cut other taxes. A new kind of politician could do something with that.

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