Majority of US Supports a Carbon Tax and Wants to Spend the Money on Renewable Energy

The majority of Americans support implementing a carbon tax as a way to curb fossil fuel emissions, according to a new study from Yale University published today in Environmental Research Letters. Moreover, if a carbon tax were implemented, 80 percent of respondents said they would favor using the revenue from this tax to develop clean energy and improve US infrastructure, such as roads and bridges.

As its name suggests, a carbon tax is a fee levied on the use of fuels that release carbon dioxide into the atmosphere. It has long been the policy program of choice for many top climate scientists, such as James Hansen. The thinking is that if you require people to pay a tax proportionate to the amount of greenhouse gasses they are producing, this will incentivize the adoption of clean, renewable energy. Still, the idea of a carbon tax has historically been seen as a large political risk—no matter how you feel about climate change, nobody likes more taxes.

Despite the generally anti-climate science stance of the conservative establishment (and the current presidential administration in particular), the push for a carbon tax recently curried favor among various members of the GOP. Earlier this year, a group of arch conservatives including former secretaries of state James Baker and George Shultz formed the Climate Leadership Council to pitch the idea of a carbon tax to the Trump administration. The plan garnered support from major oil companies like Exxon Mobil, BP, and Shell as a free-market solution to our climate woes.

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Under the Republican scheme, the tax would initially charge $40 per ton of carbon dioxide produced, resulting in an estimated $200 billion per year in revenue, and the amount would go up over time. This would in turn be paid out in tax-free dividends to US families, amounting to about $2000 annually for a family of four.

The Yale researchers wanted to see if Americans would be in favor of using that tax to further combat climate change instead.

"What we aimed to find out was whether there was support among the American public for a carbon tax to address climate change," Matthew Kotchen, a professor of economics at Yale, said in a statement. "Specifically, we also wanted to discover how much they were willing to pay, and how they would prefer the revenue from the tax to be used."

In a nationally representative survey of 1,226 American adults, Kotchen and his colleagues gave respondents ten different ways to spend the revenue from a carbon tax and asked whether or not they would support each of these expenditures.

According to the results, most respondents (nearly 80 percent) were in favor of using the carbon tax revenue for developing renewable energy, or fixing America's infrastructure, like roads and bridges. Moreover, the average American household was willing to pay around $177 per year in a carbon tax on its energy bills, which by itself would amount to $22 billion in revenue annually.

"Interestingly, our analysis indicates strong public support—more than 70 percent—for using some portion of the carbon-tax revenue to compensate coal miners whose jobs are affected by a reduction in the use of fossil fuels," Kotchen said. "By our calculations, there would be enough revenue from this tax to compensate all coal miners with nearly $146,000 upon the passage of the tax."

The Trump administration continues to campaign on a platform of creating new jobs for coal workers by ramping up energy production in that sector. Last month, the administration reversed an Obama-era temporary ban on new coal mining projects on federal land in the hopes that it would help revive the coal industry, which has seen major coal companies shutter their doors in the last few months and thousands of coal workers laid off. Providing a relief to the workers affected by the downturn in this fossil fuel industry in the form of a carbon tax could preclude the need to open new mines in addition to helping curb fossil fuel emissions.

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Still, the authors of the new study acknowledge its limitations. In particular, the amount Americans were willing to pay in a carbon tax on their energy bills ($177 on average) was significantly less than the amount advocated in the conservative plan pitched to Trump earlier this year, which would see American citizens and businesses pay $40 per ton of carbon produced. The average American produces around 16 tons of carbon per year.

But according to Kotchen, the reality of the situation is more nuanced, and this isn't necessarily an argument against a carbon tax.

"It's worth keeping in mind that [the Republican proposal] is for a wider ranging carbon tax on all goods and services, so a direct comparison is more difficult," Kotchen said. "Our study specifically asked about a tax on energy bills, and the response we received showed a minority of support for any form of dividend to be paid out. We believe that our findings may have significant policy implications."

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