Daniel Esty and Michael Porter:
The best way to drive energy innovation would be an emissions charge of $5 per ton of greenhouse gases beginning in 2012, rising to $100 per ton by 2032. The low initial charge, starting next year, would make the short-term burden on consumers and businesses almost negligible. ...
Our proposal would apply to all greenhouse gas emissions, so that everybody, and every fossil-fuel-dependent form of energy, would be included. Coal-burning power plants would pay based on the emissions measured at their smokestacks. Oil companies would pay for every gallon of gas or oil delivered. Yes, these costs would be passed on to consumers, but this is what motivates changes in behavior and technological investments.
Some will say that even the modest emissions charge we propose is politically impossible, given the death of the cap-and-trade bill that the House passed in 2009. But the ballooning federal deficit has created a new political imperative. A modest emissions charge will look attractive compared with raising individual income taxes or burdening the economy with new corporate or payroll taxes.
via www.nytimes.com
It is a little tough to say that a $5 carbon tax would drive energy innovation at the same time the short-term burden on consumers would be small. Also, the revenue effects look small too. If there are about 6 billion metric tons of greenhouse gases emitted, a $5 tax per ton would generate $30 billion. That is only 3% of a $1 trillion budget deficit. So, a $5 tax per ton doesn't do much at all in the short-term. The idea, I guess, is to get it on the books and crank it up so that something might happen 10-20 years from now.
Note: As always, I'm not sure of my numbers ... corrections welcome.
