I recently attended the Velo-city Global 2012 international cycling conference in Vancouver. It's a week-long celebration of all things related to the bicycle. I gave a presentation there on Madison's pro-bike efforts, as we're recognized as a leading bicycling city in North America.
Vancouver lives up to its reputation as a beautiful and progressive city, but it wasn't until after I got back home that I read about British Columbia's carbon tax. This is great public policy that should be enacted here in Wisconsin or the United States if possible.
Under the British Columbia system, all carbon fuels (gasoline, natural gas, coal, etc.) are taxed at various rates. The system started in 2008, and the taxes have been gradually raised (PDF) so that residents could adjust their carbon fuel use over time. The system is also revenue neutral, so that every dollar raised through the tax is returned to taxpayers through cuts in other taxes.
The idea is to get people to move away from carbon fuels while avoiding an increase in their overall tax rates. This approach has some unlikely supporters. Even a conservative economist like Arthur Laffer (of the Reagan-era "Laffer Curve") supports the idea, because it essentially uses a free market approach to attacking climate change. You're free to buy all the fossil fuels you want -- you just have to pay more if that's your choice.
Even though the tax has only been in effect for four years, greenhouse gas emissions are down 4.5%, even while the B.C. population and economy continues to grow, debunking arguments that a carbon tax would hurt economic growth. Meanwhile, gasoline consumption in B.C. is down 2% while it's up 5% in the rest of Canada, which does not have a carbon tax.
A carbon tax was proposed in the U.S. Congress as recently as 2009. It's hard to believe in today's extremely conservative environment where the fossil fuel industry dominates the debate, but in 1993, President Bill Clinton proposed a carbon tax as part of his budget and it was taken very seriously, though it was ultimately abandoned for lack of support in Congress.
I know. Proposing anything that makes this much sense in the current political environment seems like madness. A policy that seems to be among the most effective and simple strategies to attack the most serious current threat to the planet while providing more tax fairness can't even be mentioned among politicians who want to be taken seriously. We live in mad times.
But we can't just play defense all the time. We need to continue to propose bold and smart ideas, because over time, this will move the debate toward more rational policies.