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Comment 83 for Design Comments for the GHG Scoping Plan (sp-design-ws) - 1st Workshop.


First Name: David
Last Name: Schonbrunn
Email Address: David@Schonbrunn.org
Affiliation:

Subject: Carbon Tax
Comment:
While I am not an economist, I have been very struck by the
website, carbontax.org which contains the writings of Charles
Komanoff.  Rather than offering a series of links to articles and
publications there, I urge CARB to thoroughly explore the site.  

I see several very large advantages to carbon taxes, as compared
to cap and trade programs:

Cap and trade will require the creation of new institutions and
expertise, which will be very costly.  The thousands of lawyers
and investment bankers that will be needed to make it work will
add tremendous cost to the emissions reduction process. 
Conferences currently being offered on the business opportunities
that will be created by cap and trade suggest that vast sums that
otherwise could go back to the public, or into emissions reduction
projects will be siphoned off by entrepreneurs.  A carbon tax will
be simple and inexpensive to administer and will not require an
army of lawyers.  The proceeds of the tax could be used to create
cost-effective transit systems, as well as other low-carbon
mitigations.  Another possibility is to return the entire proceeds
to taxpayers, to offset the increased cost of consumer goods.

Another tremendous problem with cap and trade is the potential for
sophisticated gaming.  (Think of how Enron manipulated the
California energy market.)  A carbon market would appear quite
opaque and arcane to the public.  A carbon tax, on the other hand,
is very straightforward.  It should be easy to catch bad actors.  

The chief benefit cited for cap and trade is the certainty that
the target will be achieved.  This is dubious:  if the system is
itself flawed, as was Europe’s, or if it is gamed, it won’t
achieve its goal.  On the other hand, a carbon tax can be adjusted
in response to observations of energy consumption levels.  This
isn’t rocket science!

I urge CARB to conduct a full public evaluation of the potential
benefits of a carbon tax before being stampeded by the business
community into adopting cap and trade.  The very popularity of cap
and trade with the business community should be enough to cause
CARB to stop and evaluate whether implementing it would truly be
in the public interest.

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Date and Time Comment Was Submitted: 2008-08-01 18:50:24



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