I believe that all of the leading Democratic candidates for president have endorsed a carbon tax. Joe Biden and Elizabeth Warren did so during CNN’s town hall on climate change last week. Down a tier or two, Kamala Harris and Pete Buttigieg endorsed it, as well. Bernie Sanders has endorsed a carbon tax in the past.
The carbon tax was a bridge too far for Hillary Clinton during the 2016 campaign. She did not endorse the idea. Nor did President Obama.
First, the cost of the carbon tax would be passed on to consumers:
While oil, natural gas, and coal companies would be responsible for paying the fee, they would likely pass a significant share of the associated cost on to their customers.
Second, a carbon tax would have a disproportionate impact on low-income households:
As with the increase in energy costs, the increase in the cost of nonenergy goods and services would disproportionately impact low-income households.
The memo quantifies the effect of the tax on gas and electricity prices:
In our analysis, for example, a $42/ton GHG fee increases gasoline prices by roughly 40 cents per gallon on average between 2020 and 2030 and residential electricity prices by 2.6 cents per kWh, 12% and 21% above levels projected in the EIA’s 2014 Annual Energy Outlook respectively.
It does the same for household energy bills:
Average household energy costs would increase by roughly $480 per year, or 10% relative to the levels projected in EIA’s 2014 Outlook.
The Hillary memo states that a carbon tax would increase the cost of household goods and services: “The cost of other household goods and services would increase as well as companies pass forward the higher energy costs paid to produce those goods and services on to consumers.
Not surprisingly, the carbon tax is unpopular with voters. Indeed, Americans for Tax Reform notes that carbon tax advocates haven’t been able to get a carbon tax passed in a single blue state.
No wonder. Ramesh Ponnuru points to a poll that found 68 percent of Americans opposed to paying even $10 extra in their monthly utility bills to address climate change, even though most Americans believe it’s occurring and that human activity is responsible.
Yet, in their quest to satisfy the Democratic left, the leading Dem contenders all seem to favor a carbon tax.
Whichever one of these luminaries wins the nomination will be saddled with that position. He or she will have some explaining to do.