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Carbon excise fee would create jobs, save lives

Date published: 6/24/2014

Recent reports on the impact of global warming and subsequent climate change underscore the need to reduce greenhouse gas emissions.

A new comprehensive study finds that an excise fee on carbon can reduce those emissions while also adding jobs to the economy--if the revenues are returned to households.

The study, conducted by Regional Economic Models Inc., examined application of an excise fee on the carbon dioxide content of fossil fuels. The fee would start at $10 per ton, increasing at $10 per ton each year.

Revenue from the fee would be returned to households in equal shares as direct payments. Under this approach, recycling the revenue back into the economy would add 2.2 million jobs over 10 years.

Improvements in air quality would save 13,000 lives a year. Emissions would decline by 33 percent.

What this study illustrates is that by giving the revenue back to the people, a carbon excise fee will actually stimulate the economy.

The big objection to a carbon tax has been that it would kill jobs. That assumption is now shown to be false if the revenues are returned to households and not used for governmental purposes. The REMI study provides detailed annual output data by region and by sector of the economy supporting the conclusions.

For those opposed to more government regulations like those issued recently by EPA, the best recourse is to apply a revenue-neutral carbon excise fee. This is supported by conservatives from George Shultz to Greg Mankiw.

With the REMI study showing a carbon fee that returns revenue to households and will add millions of jobs, this is the option everyone can embrace as a real free-market solution.

Readers should contact Rep. Wittman and request that he support this conservative alternative to government regulations.

Gregory T. Haugan