Spreadsheet and updates

More later, but for now: Here's a draft spreadsheet based on the work that Bruce and I have been doing. It should be reasonably understandable, so let us know what you think!

PS. Here's an interesting news article. Unfortunately he doesn't clarify (in the last paragraph) if he wants a tax of $20 per ton of C or per ton of CO2.

ExxonMobil CEO Urges CO2 Tax, Not Cap-And-Trade Law
January 08, 2009: 03:11 PM ET
By Ian Talley of DOW JONES NEWSWIRES

WASHINGTON -(Dow Jones)- ExxonMobil (XOM) Chief Executive Rex Tillerson on Thursday urged federal lawmakers to consider a "carbon tax" to reduce greenhouse gas emissions instead of a cap-and-trade law such as the one Congress is drafting.

Marking a major milestone in the evolution of the oil firm's stance on the climate change issue, Tillerson's policy call comes as Democratic leaders prepare to move toward creating stringent cap-and-trade legislation.

"My greatest concern is that policy makers will attempt to mandate or ordain solutions that are doomed to fail," such as a cap-and-trade system, Tillerson said in a speech at the Woodrow Wilson Center here.

"A carbon tax would be a more direct, transparent and more effective approach, " he said.

A carbon tax is a straight fee for emissions while a cap-and-trade system establishes economy-wide emission limits and a market for firms to buy and sell pollution allowances based on whether they were above or below their cap.

Only a few years ago, Exxon was a major financial supporter of climate change skeptics, though recently the firm's position had begun to recognize the political reality in Washington as Democrats' power rose, and the company started calling a carbon tax a more "reasonable" solution to cut emissions in the economy. Tillerson's comments represent the first clear call by the CEO for a price on carbon.

Exxon's public stance on a carbon tax comes as U.S. Rep. Ed Markey, D-Mass., one of the strongest advocates for stringent climate change legislation and clean energy legislation in Congress, is expected to be named chairman of the House subcommittee responsible for drafting greenhouse gas laws.

The move - if ratified as expected later Thursday - will likely mean tougher greenhouse gas and clean energy policies out of the Energy and Commerce Committee than industry had forecast before a major shake-up in the panel late last year. Markey's play follows the successful November coup by Rep. Henry Waxman, D-Calif., for the chairmanship of the full Energy and Commerce Committee from more moderate Rep. John Dingell, D-Mich. It is widely believed to have been approved by House Speaker Nancy Pelosi, D-Calif., who also backs tough cap-and- trade legislation.

Analysts say Markey in the post will help Waxman to more easily pass tough new cap-and-trade legislation that would cut greenhouse gases sooner, faster and across a wider spectrum of the economy than Dingell or Boucher would have preferred. At one time, Dingell had proposed a carbon tax. By forcing lawmakers and the public to quantify the economic impact of cutting greenhouse gases, analysts said the veteran automaker advocate attempted to make it less politically tenable to support stringent emissions reductions.

Tillerson said cap-and-trade systems "inevitably introduce unnecessary costs and complexity that undercut their effectiveness," calling it ultimately a " stealth tax." Taking advantage of the current economic crisis caused by a systemic problem failure in the financial houses, the Exxon CEO also raised the specter of more economic toil precipitated by a cap and trade. "This new Wall Street of emission brokers will take the emphasis away from the goal of reducing carbon emission and focus it's attention on price volatility," he said.

Tillerson said reductions and changes to other taxes, such as income or excise policies, could offset the carbon tax on the economy.

Although widely encouraged by economists - including within the Congressional Budget Office - who say it's a more efficient and direct approach to cutting emissions, the carbon tax has been largely shunned by most lawmakers as it's seen as politically unfeasible to pass. That may be why Exxon has joined the ranks of other heavy carbon emitters calling for a carbon tax, as it would reveal more transparently of the actual costs to the economy of putting a premium on greenhouse gas emissions.

Rising energy prices and a stumbling economy are thought to have played the biggest role in the embarrassing defeat of a climate change bill in the Senate last year. Majority Leader Harry Reid, D-Nev., withdrew Sen. Barbara Boxer's bill from floor consideration after it was clear that a majority of Senators weren't going to support the estimated $7 trillion measure.

And the failing economy - along with a massive fight over how the income from auctioning emission allowances will be re-distributed between industries - is why many lawmakers have said final passage of climate change bill isn't likely this year.

Pressed by reporters to say what price level Tillerson thought carbon would need to be taxed to activate emission cuts, the oil chief said it would take at least $20 a ton. "It's a question of how much you think the economy is willing to take and how aggressive you want to be," he said.

-By Ian Talley, Dow Jones Newswires

Updates and Thursday Jan 8 meeting downtown

Happy New Year, everyone! Our next meeting is this Thursday, Jan 8, 12-1pm in the 5th floor conference room at 1402 3rd Ave. Sorry for the late notice.

Agenda
* 12:00-12:05: Updates (see also below) and introductions
* 12:05-12:40: Detailed discussion of the spreadsheet that Bruce drafted: BruceF.xls. Based on his prior work and a spreadsheet I posted last time, this spreadsheet should be a good focal point for continued discussions about tax rates, low-income rebate, spending options, and other policy issues.
* 12:40-12:55: Strategy for 2009: What are our goals and what are next steps? (For example, when would be a good time to start submitting op-ed pieces?)
* FYI, our next meeting downtown is Th Feb 5, 12-1pm.

Updates
* One recent article of interest is conservative columnist Charles Krauthammer's call for a revenue-neutral $1/gallon gas tax in this Weekly Standard cover story (he says he's an "agnostic" on anthropogenic climate change and mostly talks about how the gas tax would be good for national security reasons and to avoid more heavy-handed government policies like tighter CAFE fuel-economy standards). In advocating a policy in this direction, Krauthammer joins a fine group of conservatives that also includes speechwriter David Frum, Harvard economist Greg Mankiw, and local Todd Myers from the Washington Policy Center.
* Another interesting read is this NY Times article ("In Obama's team, two camps on climate", Jan 2). The Obama camp's supposed opposition to carbon taxes should be a huge warning sign that he may not be all that keen on cap-and-trade either---remember that both policies will raise energy prices.
* Finally, yesterday's P-I article ("Eyman launches campaign for a tax-capping initiative", Jan 6) emphasizes the continued political attractiveness of targeting property taxes. The initiative Eyman filed is the "Lower Property Taxes Initiative" and it was only one of two initiatives that were filed to reduce property taxes.
* Oh, and one more: An article in the Seattle Times ("Governor favors mostly free permits for polluters", Dec 13). The title of the article pretty much says it all, but this is very bad news for anybody who wants sensible climate policy.