con case 2/8/16 - file · web viewat this moment with our u.s. economy and worldwide...

Con Case 2/8/16 Both teams wish to save the environment. At this moment in time, the U.S. is not ready for a CT which would make working class Americans pay for insignificant emissions reductions. It is for this reason we oppose Resolved: The United States federal government should adopt a carbon tax.

Instead, choose our FRAMEWORK: the team which makes sense of the best short term solution that will CONTINUE into the long term to cut pollution, save lives, and save the economy is the logical way to vote.

At this moment with our U.S. economy and worldwide regulation where it is today, only the mutually exclusive policy of INCENTIVE FOR INNOVATION for renewables, where we can leap frog ahead to deep and CONTINUING emissions reductions must preceed the ultimately insufficient and economy-dragging Carbon Taxes.

Contention One: Carbon taxes don’t impact the environmentIf the cost-benefit ratio of the pure tax-to-carbon interchange was even, there might be an argument for a carbon tax. As Megan McArdle of the Atlantic explains, however, it’s not even close: It is a staggering 10

A. A 1% increase in price leads to less than a 0.1% decrease in consumption over the long term. And that's the best- case; in the short term, and in poorer countries, it's even less. Meanwhile, income elasticity (how demand changes with rising or falling incomes or oil prices) means demand will also grow unless the price changes are very, very large.

The problem is, to get the big results would mean massive price increase (essentially a high tax rate), which would simply be an even more huge, unfair regressive tax on the working poor.

B. It may be working in other countries, but the effects will flatline without achieving the target scientists scream for. –Unless viable renewables and clean transportation become practical and affordable.

C. Also, CT will not decrease emissions due to carbon leakage.D. Also, if the U.S. acts unilaterally, reduction will not meet the target since will not be enough

because the U.S. acting unilaterally, without India or China on board.

Contention Two: Carbon taxes starve the economy We’ve just shown you that the CT is ultimately ineffective for the solutions we so desperately need. In case you think it wouldn’t hurt to cut a little emissions, think again. This tax or economic penalty carries nasty side effects regressive pricing and economic shrinkage, It continues to mask the real offenders: big oil money.

A. Though many countries and literature deem a Carbon Tax as a necessary solution, this is not the time. Terry Dinan of the Congressional Budget Office explains this in more detail:

The higher prices it caused would diminish the purchasing power of people’s earnings, effectively reducing their real (inflation-adjusted) wages. The costs of a carbon tax would not be evenly distributed among U.S. households. For example, the additional costs from higher prices would consume a greater share of income for low-income households than for higher-income households, because low income households generally spend a larger percentage of their income on emission intensive goods

The issue isn’t simply that the American people are asked to pay for a piece of environmental legislation: it’s that a) the poorest Americans are asked to pay, proportionally, the most, and b) the legislation comes with the nasty side effect of economic stagnation at a time when the economy is in a vulnerable stage of growth.

B. It masks a real longterm solution and opportunity for investment for RENEWABLES> Even if the other team says it is revenue neutral, with money put back in American’s pockets through homeowner heating rebates and more, then where is there money left for the claims that the deficit will be cut? Or, and this is crucial, for true development of the ultimate solution: energy renewables and clean transport?!?

Yet a Ct also ruins American competitiveness.

Contention Three: A CT is worst of mutually exclusive optionsLet’s discuss opportunity costs for a moment. The principle is essentially that if one action is taken instead of another better action, that action is harmful. It is essentially a harm on top of the iffy benefit you go for Well, the opportunity costs for carbon taxes are massive.

Now some may say this is not topical, but if we know there are other effective policies that will gain what CT wishes and MORE, we are morally obligated to warn everyone. Further, these other options can’t be done ALONG WITH CT.

Here’s the problem with limiting carbon emissions: realistically, under the modern paradigm, there are no alternatives. Craig Pirrong of the University of Houston elaborates further: “With respect to electricity generation, the major renewables (wind and solar) are both intermittent and diffuse. These are obstacles inherent in the source of the energy that will be difficult to surmount.” As for transportation technology, “With respect to transportation fuels, the outlook is even more problematic. Battery technology has proved a major constraint on the ability to turn electricity (including electricity generated from renewable sources) into an efficient transportation fuel.” If the United States had viable alternatives ready to go for fossil fuels, then a carbon tax policy could have merit as a means to “push” a greener future. A greener future does not yet exist. Rather than shooting itself in the foot economically and creating negligible gains environmentally, the U.S. should aim heavy investment in R&D.

One way is a cap-and-trade system, whereby instead of putting a price on carbon, carbon allowances are disbursed whereby efficient enterprises can “sell” emissions to dirtier ones. Theoretically, total emissions get reduced. If the end goal of environmental policy truly is to limit total emissions, cap-and-trade is a far more direct way to do so. The United States would also ensure internationally compatibility on a grander environmental framework, since cap-and-trade is more popular internationally. But both CT and Carbon Trading can’t co-exist.

Better still, if your wish is to cut off carbon emissions quickly without harming the economy or saddling the working class with economic burdens, then intensive research and development to make revewable energy and clean transport affordable and viable (solar, hybrid cars etc.) must be the focus, which CT would only hinder and distract. ________

Some may feel the government tried to subsidize solar development and green jobs and failed…but…

While Public Forum Debate does not include laying out a policy, we need to just show you that other competing policies exist, and their ability to solve sooner and greater AND continually over the long term ---AND with no nasty price to pay with unfair regressive pricing or inadequate focus on green technology solutions make us plead for you to see with we have little time to waste on CT, and must beg for other policies the link green technology development to conservation!

Why opt for a plan that will only limit U.S. carbon emissions insufficiently for a global plan, and mostly in the short term, when the fallout will also mean economic contraction and environmental stasis.

Instead of standing on the backs of American consumers—particularly the poorest ones—the United States government can use its economic leadership to drive investment and ride this country’s scientific and cultural prowess into a clean, economically sound future. A carbon tax isn’t progress; it’s a roadblock to it.

Foundation BriefsFebruary 2016 Brief

Resolved: The United States federal government should adopt a carbon tax.

February 2016 Table of Contents

Table of ContentsTable of Contents.....................................................................................................................................................1

Definitions.............................................................................................................................................................10

The difference between a carbon tax and cap and trade. ABH.................................................................10

There is a difference between cap and trade and a carbon tax. LWZ........................................................11

A carbon tax approaches the problem differently than cap-and-trade. LWZ............................................11

Explaining the economic fundamentals of a carbon tax. DAT..................................................................12

Definition of cap and trade. ABH..............................................................................................................13

Example of Australia’s implementation. ABH..........................................................................................14

Topic Analysis One...............................................................................................................................................15

Topic Analysis Two...............................................................................................................................................24

Pro Evidence..........................................................................................................................................................28

Inevitable...........................................................................................................................................................29

There is no real alternative to a carbon tax. LWZ.....................................................................................29

The alternative to a carbon tax would be command-and-control and expensive. LWZ............................29

The EPA will inevitably have the ability to regulate carbon emissions. LWZ.........................................30

Failure to adopt a carbon tax would result in even harsher impositions. LWZ.........................................31

Command-and-control regulation is worse than a carbon tax. LWZ........................................................32

A market based approach is better than the other approaches the government might adopt. LWZ..........33

A Carbon Tax Would Strengthen The Economy...............................................................................................34

The tax increases government revenue. ABH...........................................................................................34

Increased government revenue can stimulate the economy. ABH............................................................35

A Carbon tax increases overall economic efficiency in various ways. ABH............................................36

Carbon taxes correct the market failure of pollution. ABH.......................................................................36

A carbon tax would contribute to massive deficit reduction. ABH...........................................................37

A survey of revenues projected by academic studies. DAT......................................................................38

A carbon tax makes sense as oil prices are falling. LWZ..........................................................................39

foundationbriefs.com Page 1 of 161

February 2016 Table of ContentsA carbon tax makes sense economically. LWZ.........................................................................................39

Oil companies want a carbon tax. LWZ....................................................................................................40

Oil companies see the carbon tax as a business opportunity. LWZ..........................................................40

Businesses want a carbon tax. LWZ..........................................................................................................41

Businesses know that restrictions are inevitable so a carbon price would be the best option. LWZ........41

Companies maintain economic growth by shifting energy focus. LWZ...................................................42

While carbon pricing won’t fix all problems, it is a good first step. LWZ...............................................42

Companies want carbon pricing to maintain stability. LWZ.....................................................................43

Fossil fuels aren’t taxed equally, so companies want a carbon tax for their own benefit. LWZ...............43

A carbon tax would make energy companies more competitive in the market place. LWZ.....................44

A carbon tax may improve taxes. LWZ.....................................................................................................45

Morris’s plan has conservative support and is economically viable. LWZ...............................................46

With a few modifications, Morris’s plan should satisfy most conservative complaints. LWZ.................47

The Coexistence of Carbon Taxes and a Thriving Free Market....................................................................48

Applying carbon taxes is the recommended action based on fundamental economics. DAT...................48

Carbon taxes are sound fiscal legislation. DAT........................................................................................49

Revenue-neutral carbon taxes are a high-upside, bipartisan solution. DAT.............................................50

Carbon taxes raise revenue without permanently altering the economy. DAT.........................................51

Tax Reform........................................................................................................................................................52

A carbon tax would be an important part of tax reform. LWZ..................................................................52

Even without agreeing on climate change, a carbon tax would greatly improve our tax system. LWZ ..

53 Carbon taxes will help balance the budget equitably. DAT

...................................................................................................................................................................

54

Carbon Emissions Are Harmful.........................................................................................................................55

Carbon emissions cause a variety of health and economic damage. ABH................................................55

Carbon emissions are the main cause of climate change. ABH................................................................55

Warming............................................................................................................................................................56

Warming is real and even skeptics can’t deny that it is at least partially real. LWZ................................56

We should be risk averse when it comes to warming. LWZ.....................................................................57

Even though climate change may be “low-risk”, we should adopt policies to counter it. LWZ...............58


February 2016 Table of ContentsWarming is very real. ABH.......................................................................................................................59

The impacts of climate change are seen all over the U.S. ABH................................................................60

Alaska has been devastated by climate change. ABH...............................................................................61

A Carbon Tax Would Reduce Emissions..........................................................................................................62

Several estimations indicate that taxing carbon will likely reduce emissions. ABH................................62

The increasing cost of carbon will decrease demand. ABH......................................................................63

Price increases result in the decreased usage of gasoline and crude oil. ABH..........................................64

Non-CO2 Emissions decrease as well. ABH.............................................................................................65

Carbon taxes discourage misguided policymaking, e.g. ethanol mandates. DAT....................................66

A survey of academic studies of environmental impacts. DAT................................................................66

Carbon pricing would help innovation. LWZ............................................................................................67

Even accounting for uncertainty, the outcomes are positive. DAT...........................................................68

A carbon tax would make U.S. global leader in carbon reductions. ABH................................................69

A carbon tax would encourage clean energy innovation. ABH................................................................70

Carbon Taxes as Vehicles for International Climate Cooperation................................................................71

Carbon taxes are the best gateway to international environmental cooperation. DAT.............................71

Domestic carbon taxes can coexist with cap-and-trade abroad: an advocacy. DAT.................................72

Domestic-focused policies are actually better drivers of international action. DAT................................72

A carbon tax has far better international prospects than cap-and-trade. DAT..........................................73

International cooperation on carbon taxes is easily enforceable: an advocacy. DAT...............................74

International frameworks around carbon taxes are more robust. DAT.....................................................74

Carbon Taxes Have Been Effective In Other Countries....................................................................................75

Carbon taxes have reduced emissions in other nations. ABH...................................................................75

Case study: British Columbia. DAT..........................................................................................................76

Carbon Taxes Increase Energy Firms’ Competitiveness...................................................................................77

Carbon taxes would drive traditional energy companies into competition with coal. DAT.....................77

Oil companies are typically not hard-hit by carbon taxes. DAT...............................................................78

Con Evidence.........................................................................................................................................................79

A Carbon Tax Hurts The Economy...................................................................................................................80


February 2016 Table of ContentsThe tax decreases purchasing power, especially for low-income households. ABH................................80

Carbon tax would hurt the economy. LWZ...............................................................................................80

A carbon tax would kill the economy. LWZ.............................................................................................81

It wouldn’t be rebated to consumers. LWZ...............................................................................................81

A carbon tax would hurt manufacturing. LWZ.........................................................................................82

It would cost many jobs. LWZ..................................................................................................................82

The tax would hurt manufacturing and coal. LWZ...................................................................................83

It hurts competitiveness. LWZ..................................................................................................................83

Fossil fuels are great for the economy. LWZ............................................................................................84

Revenue-neutral just isn’t true in the context of a carbon tax. LWZ........................................................84

Taylor’s study just ignores the details – a carbon tax would not be revenue-neutral. LWZ.....................85

There is no way a revenue-neutral carbon tax could benefit the economy. LWZ.....................................85

A carbon tax is not a market solution. LWZ.............................................................................................86

A carbon tax would not satisfy progressives since it wouldn’t be sufficient to reduce global termperatures. LWZ...................................................................................................................................................................86

Australia demonstrates that a carbon tax hurts the economy. LWZ..........................................................87

Australia demonstrates that a carbon tax is not pro-growth. LWZ............................................................87

Australia proves that a carbon tax does not provide price predictability. LWZ........................................87

The Opportunity Cost of Carbon Taxes.............................................................................................................88

Cap-and-trade has the political expediency and enforcement mechanisms taxation lacks. DAT.............88

Tax gas, not carbon. DAT..........................................................................................................................89

The Environmental Impact is Negligible...........................................................................................................90

Big price increases yield small environmental benefits. DAT..................................................................90

Carbon taxes “buy time” that isn’t needed. DAT......................................................................................91

A carbon tax fails to satisfy any policy goals. DAT..................................................................................91

A US only carbon tax can’t solve. LWZ...................................................................................................92

Most emissions come from the developing world so wouldn’t affect the US. LWZ................................92

We’ve already made great gains in reducing emissions. LWZ.................................................................93

Advances in technology will reduce emissions. LWZ..............................................................................93

Unilateral action would fail. LWZ.............................................................................................................94


February 2016 Table of ContentsCarbon pricing has historically been the go-to solution for all things. LWZ............................................94

It takes too high of a price to work. LWZ.................................................................................................95

Carbon taxes don’t change the cost of alternatives. LWZ.........................................................................95

Unilateral action would increase emissions. LWZ....................................................................................96

The social cost of carbon is arbitrary. LWZ..............................................................................................96

The UN’s own report shows that a carbon tax would probably cause more harm than good. LWZ........96

A carbon tax would not be revenue-neutral and hurt the economy. LWZ................................................97

Empirical evidence shows that a carbon tax fails and hurts the economy. LWZ......................................97

The SCC takes into account the whole world which would make the US responsible for emissions it didn’t produce. LWZ...................................................................................................................................................................98

A carbon tax would not benefit the US as much as supporters claim. LWZ.............................................98

The model to estimate SCC has many flaws. LWZ...................................................................................99

New literature shows that we have a lower climate sensitivity than many suggest. LWZ........................99

SCC as a policy tool in inherently subjective. LWZ...............................................................................100

These bad assumptions lead to bad policy. LWZ....................................................................................100

The climate models that are used are flawed. LWZ................................................................................101

SCC doesn’t take into account leakage. LWZ.........................................................................................101

Leakage has important implications for climate change. LWZ...............................................................102

The US reducing emissions to zero would have almost no impact on global temperatures. LWZ.........102

The UN can’t actually justify the goal of the 2 degree limit. LWZ.........................................................103

To limit warming to 2 degrees would not make sense under cost-benefit analysis. LWZ......................104

The approach we take to preventing warming makes no sense. LWZ....................................................104

Regressive Tax.................................................................................................................................................106

Even liberal think tanks agree that it would hurt the poor the most. LWZ.............................................106

There is no arrangement that would help all income groups. LWZ........................................................106

A carbon tax would hurt the poor the most. LWZ...................................................................................107

The poor would be hurt because they spend a larger percent of their money on energy. LWZ..............107

Carbon tax unfairly burdens the poor. LWZ...........................................................................................108

Carbon Lacks Alternatives..............................................................................................................................110

Wind and solar energy generation are not viable. DAT..........................................................................110


February 2016 Table of ContentsTransportation will not shift away from carbon. DAT............................................................................111

Carbon Taxes’ Flexibility Creates Distinct Harms..........................................................................................112

Why climate certainty is important. DAT...............................................................................................112

Carbon taxes create carbon uncertainty. DAT.........................................................................................113

Carbon taxes will delay adaptation and mitigation, creating irreversible harms. DAT..........................114

Pro Counters........................................................................................................................................................115

Evading Carbon Taxes Is Very Difficult.........................................................................................................116

Carbon taxes are some of the most efficient forms of taxation. ABH.....................................................116

Carbon Taxes Are Better Than Cap And Trade..............................................................................................117

The volatility of energy prices makes taxes preferable to cap and trade. ABH......................................117

Carbon Taxes better recycle revenue than cap and trade. ABH..............................................................117

A carbon tax would reduce the budget deficit. ABH...............................................................................118

Cap and trade has many administrative problems. ABH.........................................................................118

Cap and trade is logistically and economically unreliable. DAT............................................................119

Cap-and-trade has had negligible environmental impacts. DAT.............................................................120

Cap and trade is more flexible. DAT.......................................................................................................121

Carbon Taxes Do Not Hurt The Economy......................................................................................................122

The revenues from a carbon tax offset any potential economic harm. ABH..........................................122

Carbon taxes are economically sound regardless of implementation. DAT...........................................122

Taxing carbon is a market correction, not an intrusion. DAT.................................................................123

Manufacturing is not hurt by carbon taxes. ABH....................................................................................124

Carbon Taxes Are Not Necessarily Regressive...........................................................................................125

Carbon taxes are not wholly regressive. DAT.........................................................................................125

An advocacy for making regressive policies progressive. DAT.............................................................126

A Carbon Tax Won’t Hurt International Competiveness................................................................................127

Other countries won’t implement a carbon tax unless the U.S. does. ABH............................................127

Lower U.S. emissions won’t be set back by increases abroad. DAT......................................................128

The economic impacts on global competitiveness are small. DAT.........................................................129

Climate change itself is regressive. LWZ................................................................................................130


February 2016 Table of ContentsA carbon tax doesn’t have to be regressive. LWZ...................................................................................130

A cut on the corporate tax would hurt low-income households but it doesn’t have to be that way. LWZ................................................................................................................................................................. 131

A lump sum rebate would prevent the carbon tax from being regressive. LWZ.....................................131

A carbon tax isn’t necessarily regressive. LWZ......................................................................................132

The alternative is even more regressive. LWZ........................................................................................132

AT: Leakage....................................................................................................................................................133

The leakage argument has little weight. LWZ.........................................................................................133

US action will spur other nations to adopt anti-warming measures. LWZ.............................................133

Independently, it will produce nonclimate benefits. LWZ......................................................................134

We are ethically obligated to adopt a carbon tax. LWZ..........................................................................134

The US is already acting unilaterally anyways. LWZ.............................................................................134

AT: Increases Government..............................................................................................................................135

Carbon taxes will not increase the size of the government. LWZ...........................................................135

It would actually decrease the size of the government. LWZ.................................................................135

This would be a justified instance of government growth. LWZ............................................................135

AT: Mitigation Suboptimal..............................................................................................................................136

A carbon tax still requires those who pollute to pay. LWZ.....................................................................136

Adaptation will be inadequate. LWZ.......................................................................................................136

AT: Pretense of Knowledge.............................................................................................................................137

This argument is a slippery slope. LWZ..................................................................................................137

AT: Government Manipulation.......................................................................................................................138

Empirics show that government manipulation is overstated. LWZ........................................................138

Regulation is a worse. LWZ....................................................................................................................138

Rent seeking isn’t an issue if a carbon tax is done properly. LWZ.........................................................139

The slippery slope objection doesn’t make much sense. LWZ...............................................................139

Libertarians should be in favor of a carbon tax. LWZ............................................................................140

Con Counters.......................................................................................................................................................141

Unilateral Action Fails.....................................................................................................................................142

A carbon tax is useless if China and India don’t implement one as well. ABH......................................142


February 2016 Table of ContentsCarbon Taxes Can’t—And Shouldn’t—Be Global.........................................................................................143

A global carbon tax is bad economic and environmental policy. DAT...................................................143

Carbon taxation is regressive on an international level. DAT.................................................................144

Carbon Taxes Are Not Simple or Transparent................................................................................................145

Carbon taxes carry the same complexities and implementation problems as caps. DAT.......................145

AT: Innovation.................................................................................................................................................146

We should focus on innovation, not carbon taxes. LWZ........................................................................146

Focus on carbon taxes won’t help the climate. LWZ..............................................................................146

Empirics prove – a carbon tax doesn’t stimulate innovation. LWZ........................................................147

A carbon tax would not promote innovation. LWZ................................................................................148

AT: Warming...................................................................................................................................................149

The latest NASA data confirms that there are no melting ice caps. LWZ..............................................149

Global warming won’t cause extinction. LWZ.......................................................................................150

AT: Oil Dependency........................................................................................................................................151

We are already lowering our dependence on oil. LWZ...........................................................................151

People’s dependence is fixed so carbon pricing wouldn’t reduce dependence. LWZ............................152

Increases dependence. LWZ....................................................................................................................153

We don’t need a carbon tax to solve oil dependency. LWZ....................................................................153

Renewable energy and tech diversification solve. LWZ.........................................................................154

Carbon Taxes Are a Red Herring....................................................................................................................155

A carbon tax fails to cover many emissions sources. DAT.....................................................................155

Cases....................................................................................................................................................................156

Pro Case...........................................................................................................................................................157

Introduction:................................................................................................................................................157

Contention One: Carbon taxes mitigate climate change..............................................................................157

Contention Two: Carbon taxes are an economic salve................................................................................158

Contention Three: The United States can bolster soft power and win the climate fight on an international level.....................................................................................................................................................................158

Con Case..........................................................................................................................................................159

Introduction:................................................................................................................................................159


February 2016 Table of ContentsContention One: Carbon taxes starve the economy.....................................................................................159

Contention Two: Carbon taxes don’t impact the environment....................................................................160

Contention Three: A carbon tax is the worst of mutually exclusive options...............................................160

February 2016 Definitions

DefinitionsThe difference between a carbon tax and cap and trade. ABH

Taschini, Luca. [Senior Dahrendorf Research Fellow at the Grantham Research Institute on Climate Change and the Environment] “Carbon Tax V Cap-and-Trade: Which is better?” The Guardian. 2013. Web. Accessed January 3, 2016. http://www.theguardian.com/environment/2013/jan/31/carbon-tax-cap-and-trade

A carbon tax imposes a tax on each unit of greenhouse gas emissions and gives firms (and households, depending on the scope) an incentive to reduce pollution whenever doing so would cost less than paying the tax. As such, the quantity of pollution reduced depends on the chosen level of the tax. The tax is set by assessing the cost or damage associated with each unit of pollution and the costs associated with controlling that pollution. Getting the tax level right is key: too low and firms and households are likely to opt for paying the tax and continuing to pollute, over and above what is optimal for society. Too high and the costs will rise higher than necessary to reduce emissions, impacting on profits, jobs and end consumers.

By contrast, a cap-and-trade system sets a maximum level of pollution, a cap, and distributes emissions permits among firms that produce emissions. Companies must have a permit to cover each unit of pollution they produce, and they can obtain these permits either through an initial allocation or auction, or through trading with other firms. Since some firms inevitably find it easier or cheaper to reduce pollution than others, trading takes place. Whilst the maximum pollution quantity is set in advance, the trading price of permits fluctuates, becoming more expensive when demand is high relative to supply (for example when the economy is growing) and cheaper when demand is lower (for example in a recession). A price on pollution is therefore created as a result of setting a ceiling on the overall quantity of emissions.

The key difference between a carbon tax and cap and trade, is that a tax relies on market forces (supply and demand) to decrease emissions, while cap and trade sets a defined limit for the total amount of emissions firms can produce.


February 2016 DefinitionsThere is a difference between cap and trade and a carbon tax. LWZ

Derrick Morgan [vice president for domestic and economic policy at The Heritage Foundation] A Carbon Tax Would Harm U.S. Competitiveness and Low-Income Americans Without Helping the Environment. Heritage Foundation. August 21, 2012. http://www.heritage.org/research/reports/2012/08/a-carbon-tax-would-harm- us-competitiveness-and-low-income-americans-without-helping-the-environment

Cap-and-trade and a carbon tax are two ways to limit greenhouse gas emissions. If planners knew the market’s behavior perfectly, then a cap-and-trade system and carbon tax could put the same price on emissions, achieving exactly the same effect—reduced emissions and higher prices for fossil fuel–powered energy and products.Planners cannot know such information, so the proposals look to achieve different goals: A cap-and-trade system includes a strict limit on the amount of GHGs emitted but unclear costs, while a carbon tax imposes higher known costs but unclear emissions reductions. Under a cap-and-trade system, those who wish to emit must purchase an allowance by auction or from others who have allowances to sell. In the Waxman–Markey bill,[12] for example, allowances would be distributed to utilities (to soften the increase in rates), manufacturers (to protect domestic industry), and others, including environmental groups that theoretically would use the proceeds to improve the environment. Other allowances were to be auctioned to the highest bidder, thus revealing, in theory, how much the “right to emit” costs.

A carbon tax approaches the problem differently than cap-and-trade. LWZDerrick Morgan [vice president for domestic and economic policy at The Heritage

Foundation] A Carbon Tax Would Harm U.S. Competitiveness and Low-Income Americans Without Helping the Environment. Heritage Foundation. August 21, 2012. http://www.heritage.org/research/reports/2012/08/a-carbon-tax-would-harm- us-competitiveness-and-low-income-americans-without-helping-the-environment

A carbon tax approaches the issues from a different perspective. In that system, the “right to emit” is not limited by capping the amount of GHGs that are emitted. Instead, anyone who wishes to emit must pay a tax. Since it will be more expensive to emit than before, GHGs will decline, albeit by an unknown amount: The higher the tax, the more the emissions will decline. Many environmentalists prefer the cap-and-trade system because the cap ensures that the environmental purposes of the act are met.

February 2016 DefinitionsExplaining the economic fundamentals of a carbon tax. DAT

“Options and Considerations for a Federal Carbon Tax.” Center for Climate and Energy Solutions [Successor to Pew Center on Global Climate Change]. February 2013.Web. 12 January 2016. http://www.c2es.org/publications/options-considerations- federal-carbon-tax

The figure below depicts the market for a good which uses fossil fuel in its production, such as electricity. Consumers determine their demand for electricity in part based on the market price, which reflects the private cost of production—including extraction, processing, and distribution costs that transform fuels like coal and natural gas into electricity—and purchase the amount QP. The market price, however, does not account for the social cost of the environmental damage associated with climate change induced by burning these fuels. A carbon tax would attempt to correct for this divergence between private and social cost by imposing a carbon tax on each unit of fossil fuel sold. For example, a carbon tax applied to coal would require consumers of electricity (and consumers of coal) to pay a price closer to the full social cost. This could cause them to lower their consumption to the amount QS (and their consumption of coal). Another possible response is they might use carbon capture and storage. Either way, they would reduce total greenhouse gas emissions to a level more in line with the socially desirable level.


February 2016 DefinitionsNote that the diagram above is the economic ideal of a carbon tax, rather than a necessary functional reality of one. Still, this nicely ties together the two big concepts that intertwine with the economics of a carbon tax: social cost and private cost. Teams, particularly the Pro, should refrain from assuming that this is the end of the line as far as cash flow in carbon-taxed economies goes—in particular, revenue- neutral carbon tax schemes (e.g. British Columbia’s system) provide a solid template for the likely economic reality of a U.S. carbon tax.

Definition of cap and trade. ABHKeohane, Nathaniel. [Vice President Environmental Defense Fund] “Cap and Trade,

Rehabilitated: Using Tradable Permits to Control U.S. Greenhouse Gases.” Review of Environmental Economics and Policy. 2009. Web. Accessed January 14, 2016.

The basic structure of cap and trade is simple. Total allowable emissions are limited (the “cap”), and an equivalent number of allowances are created, which may be bought or sold on a market (the “trade”). Each facility’s emissions are monitored and recorded; at the end of a compliance period, each facility must hand over an equivalent number of allowances to the government. A firm seeking to minimize its cost of complying with the program will abate pollution until its marginal cost equals the market price of an allowance. As a result, in theory, cap and trade programs are cost-effective: they achieve the required amount of emissions reduction at the lowest possible total abatement cost.1 In addition, a cap and trade program for GHGs would allow firms to bank allowances (i.e., use them after the year in which they were allocated) or even borrow them from future periods. Such intertemporal flexibility will equate the marginal costs of abatement across time. As will become clear below, this feature is crucial, since the damages from climate change are driven by cumulative emissions of GHGs over long periods of time. Allowances may be freely distributed, sold at auction, or some combination of the two. Regardless of how they are initially allocated, under standard assumptions, trading will give rise to an equilibrium price equal to the emissions tax that would achieve the same expected abatement (Montgomery 1972); indeed, in the absence of significant transactions costs, the equilibrium allocation of abatement will be identical under both cap and trade and a carbon tax (Coase 1960; Stavins 1995).

Cap and trade will probably be discussed a lot as an alternative to a carbon tax, so it is very important for both sides to have a firm understanding of it.


February 2016 DefinitionsExample of Australia’s implementation. ABH

Siriwardana, Mahinda [Professor at the University of New England] “The Impact of a Carbon Tax on the Australian Economy: Results from a CGE Model.” Business, Economics and Public Policy Working Papers. 2011. Web. Accessed January 14, 2016.

The Australian government has announced that it will price carbon by introducing a carbon tax from July 1st 2012 with a view to transforming the policy to a market-based emissions trading scheme in three to five years time from its introduction (Gillard, 2010). The tax will begin as a fixed price of $23 per tonne of CO2-e (CO2 equivalent).The government also has its plan to reduce Australia’s emissions to 5 per cent below 2000 levels by 2020 as the voluntary target in the absence of a coherent international agreement on the level of carbon emission reduction. Any policy for reducing carbon pollution, whether it is a carbon tax or tradable emission permits, will increase the price of energy. The tax is likely to have an economy-wide impact affecting Australia’s GDP, industrial structure and trade. The policy to cut emissions is regressive and the tax burden will be unequally distributed among different household groups with low-income households carrying a relatively higher burden.

This is a good example for either side to use to show how carbon taxes were actually implemented in another country.


February 2016 Topic Analysis

Topic Analysis OneWelcome to 2016! We’re excited to keep you briefed this year, and hopefully you’re excited to keep trucking toward your goals in debate and beyond. As far as resolutions go, this one is another case of “huh, that’s a big deal but I never really thought about it too hard.” While this resolution itself is simple enough, it encompasses two of the supposed biggest roadblocks in United States policy (both domestic and foreign) over the next 50 years: climate change and fiscal policy. So it’s no laughing matter.

I realized that, in the process of doing preliminary research on this case, I had made it through five or so general news articles concerning the merits of a carbon tax before realizing I didn’t actually know what a carbon tax entailed. Chances are, you may do the same thing, or already may have.

The resolution is sneaky. It’s dead-simple and straightforward as far as setting the scope of debate: should we or should we not adopt carbon taxes? The issue is compounded by the ostensibly simple terminology used: you might see “carbon tax” and not think much of it. You could probably get away in rounds with not knowing what a carbon tax truly is in practice. Your opponents might think so as well.

Here’s the problem: a carbon tax can mean multiple different things as a matter of policy. As a Pro team looking to commandeer the resolution and present the advocacy, you’ll need to get some familiarity with carbon taxes. And as a Con team, you’ll need to be ready to deal with Pro teams presenting advocacies based on one “version” of a carbon tax; depending on which path your opponents pick, your potential contentions and rebuttals change in relevance and impact.

A definitional primer

Let’s start with some definitions. I’ll go over the major concepts you’re going to see as you wade through the evidence in preparation for this resolution

Upstream/midstream/downstream

This terminology always refers to a location within a system. For instance, when we look at the production of oil, there are generally two stages, or areas, in its production: upstream and downstream. Upstream refers to the original procurement of the material: exploration, drilling, and procurement of oil. The raw material then essentially “floats” downstream. The downstream component of fuel production is refinement: oil is separated and worked chemically to produce the functional outputs: jet fuel, gasoline, polymers, etc.

The same terminology applies to the entire “carbon” chain as a whole. Upstream, you have the original production of carbon-generating commodities: coal suppliers, natural gas processors, and oil refineries. In the case of oil, there is no midstream: after refinement, the end products of that oil are either going straight into industrial processes (e.g. the production of plastics) or to end users (as fuel for transportation). Those final destinations for the main carbon-producing fuels—everything from gas pumps to industrial factories—are considered “downstream” in the scope of the carbon tax discussion. Midstream, as the name implies, refers to middlemen. By and large the main instance of this is utility companies—entities turning a ready fossil fuel (coal or natural gas, for the most part. I’ll keep renewables and nuclear out of the scope of discussion) into electricity,


February 2016 Topic Analysiswhich is then billed to end users. You’ll find two halves of a pie chart breaking down greenhouse gas emissions by sector and usage across this page and the next one1.

As I stated above, the idea of a carbon tax seems pretty intuitive: put a tax on the emission of carbon and call it a day. Here’s where some nuance comes in: there’s no such thing as taxing carbon. In reality, from a legislative perspective, there has to be a human or business entity to actually tax. Here’s why it’s important to understand the functional reality of a carbon tax: the recipient of the tax determines its impact. If we look at the “right” half of the greenhouse gas breakdown, we can see a clear conclusion: half of the United States’ greenhouse gas emissions are coming from one of two sources: electricity generation, and other people’s vehicles.

The former is midstream, and latter is downstream. In terms of classical economic thinking, there shouldn’t be a difference between the two in terms of how a tax is applied. Regardless of which “stream” a carbon tax wades into, the endgame should be higher consumer price, as all price increases eventually work their way downstream. This is potentially not the case.


February 2016 Topic AnalysisSocial cost

Let’s consider some other tax policies which are some combination of less contentious and less impactful than the carbon tax: these include tobacco taxes, alcohol taxes, and soda taxes. In a sense, these are similar to a carbon tax—they’re taxes which aim to impose a social cost.

The premise of such taxation is that some activities are harmful not just to the individuals procuring them, but for society at large. In the three instances I listed above, the social cost is the larger price of healthcare driven by having less healthy individuals in a population. That cost is shared by everyone, since everyone sees the cost of health insurance, hospital visits, etc. rise. Part of the social cost includes more immediate impacts: if someone is smoking tobacco in your general vicinity, you’re getting hit by secondhand smoke and the associated harms that come with it.

February 2016 Topic AnalysisNaturally, the social cost of carbon is arguably huge: climate change associated with greenhouse gas emissions has the potential to alter human life and lifestyles in unforeseen and terrifying ways. Just as smokers are essentially asked to pay as a means of covering the cost of the social damage they’re doing, so too would a carbon tax demand that people pay the price of the social damage they’re doing by emitting it.

Ever enjoyed being indoors while it’s cold outside? How about a cross-country flight? Driving to a friend’s house? Eating? Those are slices on the right “half” of the greenhouse gas emissions breakdown shown on the previous page. That means each of those activities listed has a social cost. Take a look through all the categories and it becomes evident that every element of life in a developed country is likely carbon-dependent in some form. This means that every element of a modern lifestyle has a hidden social coast

Progressive/regressive taxation

Whenever you’re dealing with any kind of tax policy, one of the first questions you should be asking is “regressive or progressive?” The meaning of these two terms is probably the most important and impactful raw information I learned in my debate career. If you haven’t come across these terms before, or have and don’t know what they mean, do yourself a favor and look it up ASAP. Don’t worry, I’ll wait.

As a quick and dirty explanation: a regressive tax imposes a penalty in reverse of an individual’s ability to pay it. A progressive tax, conversely, scales up with the ability to pay that tax. Most consumption taxes are inherently regressive. Take the sales tax, for instance. Statistically, the proportion of an individual’s income spent on consumption is inversely proportional to the level of income itself. In real English, that means wealthier people tend not to buy as much “stuff,” proportionally.

This makes sense. When people make enough money to afford more than what is needed, the surplus income is typically rammed into investments—stocks, bonds, savings accounts, retirement accounts, etc. As income decreases, individuals have less leverage over where income goes. Necessarily, the money is spent on consumption—food, gas, housing, etc.

Again, a consumption tax will typically be regressive. If an individual has a lower income (lower ability to pay taxes), a consumption tax is effectively a tax on most of their spending and, inherently, most of their income.

As you’ll see it in most discussions, and in the context of this brief, progressive taxation systems (income taxes are one of the most accessible examples of progressive taxes) are a policy objective, while regressive taxation is a harm, as the implied impacts are greater levels of poverty and inequality (the poorest are hit the hardest).

Take a look back at the pie chart occupying the two pages above. Hopefully you see why carbon taxes themselves are typically considered regressive. Carbon is, in a sense, a consumable. Carbon originates from the consumption of goods across every facet of American life—if you use transportation or electricity, you’ve accounted for some chunk of the 2/3 of the greenhouse gas emissions pie chart on the previous page. And the rest of those emissions somehow wind their way into consumables—agriculture, industrial production processes, building heating, etc.

So this resolution is really a proposal for a consumption tax—a regressive tax to account for the social cost of carbon emissions.



Implementation

There are three options for instituting a carbon tax: upstream, midstream, or downstream. As implied in the analysis above, because costs trickle down to consumers, the location should theoretically all result in the same impact: higher prices for consumers.

The endgame of a carbon tax, or any other piece of carbon legislation, is to reduce the taxed consumption. The fundamental goal is to increase the cost of carbon to the point where emissions go down. Especially given the commitments made at the Paris climate talks, reducing carbon emissions figures to be a big part of future United States domestic energy and economic policy.

From at least a scientific perspective, this makes sense: most of what we consider “greenhouse gases” is actually carbon. The elephant in the room is methane, especially since 4.3 million equivalent cars’ worth of methane began spewing from California last year. However, methane accounts for still a minority of emissions, and methane lasts much more temporarily in the atmosphere than carbon dioxide. As far as permanent climate change mitigation goes, carbon has been the main focus of scrutiny, and rightly so. While you may see teams challenging the effectiveness of taxing carbon rather than greenhouse gases as a whole, and we even provide some evidence to that effect, this shouldn’t be a major focus of preparation, and with sufficient evidence at the start of your first speech, you should be able to sidestep the issue and treat carbon mitigation like a general equivalent to greenhouse gas emission mitigation.

As far as implementation goes, teams should (as a general rule) stray away from dealing with counterfactuals. Pro teams hunting for compelling advocacies should look abroad, where a multitude of options have been given room to spread their wings.

The first place to look is Scandinavia: Finland, Sweden, and Norway were the original carbon tax leaders, enacting legislation in the early 1990s. The current debate over the logistics of a carbon tax, outside the political feasibility of such legislation, is over the pricing of carbon.

The standard for carbon taxes, as has been since their initial implementations in 1990, is to price emissions by the ton of carbon dioxide. It’s an effort to legislatively mimic commodity pricing. This is the reason you’ll quickly find articles attesting to near economic consensus on the desirability of carbon taxes: by pricing carbon like any other commodity, carbon taxation is the closest thing to a free market solution a government could probably legislate.

Carbon is not a commodity in and of itself, given that it exists as a byproduct of other production processes. As such, despite being a “market solution” (this is the kind of phrases you’ll see attributed to carbon taxes by economists as you go about preparing for this resolution), a carbon tax does not create a market. It merely alters the free market by adding an additional price constraint to the production and consumption of goods.

This will be covered more in-depth in the next section of the analysis, but the market aspect is a key difference between carbon taxes and cap-and-trade: carbon taxes alter markets, while cap-and-trade creates them.


February 2016 Topic AnalysisFor teams looking for affirmative advocacies, the implementation of a carbon tax has three distinct elements: target, rate, and application. These are just terms I’ve ascribed to make the analysis easier to divide and understand.

The target concerns the location of carbon production—upstream, downstream, or midstream. Given the relatively low difference in potential impacts between the three options (although there is literature that happily goes into the minutiae of the matter), this topic is better suited for policy debate, not PF.

Rate is simply the pricing of carbon. Finland’s original carbon tax levied a roughly $8-per-ton tax on carbon. Contrast this with Norway, whose 2013 carbon tax was $74 per metric ton. Most estimates of a potential carbon tax in the United States place the potential rate at around $15-$30 per ton. This is theoretically enough to tangibly increase the price of goods, particularly gasoline, without exacting substantial economic harms. The result is theoretically higher prices and reduced emissions.

Application is really where a Pro advocacy can get juicy. I use application to define where the money goes— what the revenue is used to cover. Again, this is a topic where looking abroad should generate some great ideas on where to run with the argument. Finland, for instance used its carbon tax revenue to slash income taxes and help balance the government budget.

Most countries which have since implemented carbon taxes have used the revenue in the same way as Finland. Norway, Sweden, and Ireland used the carbon tax simply as another source of government revenue, creating greater government budget flexibility. If the government is taking in revenue, it has money to spend, and sound economic theory and evidence backs the notion that government investment is a powerful economic tool for national prosperity. Advocating such an allocation of revenue can thus be used to address Con qualms with respect to the economics of carbon taxes.

On the other half of the Finland coin, the Netherlands, Sweden (in a second phase of their carbon taxation program), the U.K., and most recently the Canadian province of British Columbia used the revenue to slash taxes elsewhere. The carbon tax was thus revenue-neutral, in the parlance of tax policy. A revenue-neutral carbon tax advocacy is likely Pro teams’ best tool for countering the regressive taxation contention Con teams are likely to work into cross-fire. While the tax itself, in a vacuum, is still regressive, following the trail of that money all the way from the point of taxation to the point of “spending” (i.e. where the government spends its takings, or in this case cuts taxes) will demonstrate that the policy in its entirety is neutral, or non-regressive.

The remaining countries to implement a carbon tax (there have already been many, in case that was not been apparent) used the revenue to invest in green technology—this includes both R&D and helping households transition to lower-carbon technology. Again, this is an advocacy which can help Pro teams sidestep major Con contentions, in this case related to the environmental efficacy of the resolution.

As an appended point, Pro teams would be wise to take notice of just how many countries have managed to implement carbon taxes. If the Pro decides to framework around environmental urgency, or the debate simply drifts in that direction, scalability will likely be a topic that sees its fair share of clash. While cap-and-trade is still the global status quo, Pro teams still have some evidence that the United States would not functionally isolate itself from the pack with a carbon tax. Admittedly, this is a case where the Con can turn the very existence of a non-carbon-tax status quo into a rebuttal point using the environmental framework.



Alternatives

My analysis of the implementation of the carbon tax skewed heavily in favor of Pro strategy: generally, implementation of an affirmative resolution is where Pro teams’ advocacies get their chance to shine. Here, the tables flip and the Con gets some breathing room.

If we’re discussing alternatives to a resolution’s policy, that means we’re discussing opportunity costs. As with regressive/progressive taxation, it’s a term that you should be well-acquainted with, if you’re not already. As a perhaps too-simplistic recap: opportunity cost is the harm of doing something suboptimal. It’s the FOMO of economic policy.

If the Con wants to commandeer the resolution’s battles, opportunity cost is an armored tank. Ordinarily, teams shoot themselves in the foot trying to run opportunity cost argument. They attempt to win resolutions by demonstrating that alternative policies present fewer harms and greater benefits. Given that most resolutions are phrased in terms of “the benefits outweigh the costs,” this seems like a greater idea. Of course, the natural, savvy response from opposing teams is “well fine, we can do both. The benefits still outweigh the costs.” And just like that, the clashes all fall to the opposing team.

Opportunity cost usually relies on mutual exclusivity: it’s only a cost if we’re giving up some superior alternative in order to go with a policy. In that case, a “good” resolution is still net harmful: it’s creating harm relative to its own potential. Without mutual exclusivity, there is no opportunity cost: a superior policy can coexist with an inferior policy, and as long as the inferior policy still tips the cost-benefit scale in the right direction.

This means that Con teams need to fulfill two criteria if they want to clash over opportunity costs: 1) They need to prove that a carbon tax cannot coexist with some superior alternative, and 2) They need to prove that alternative exists.

That alternative is, of course, cap-and-trade. You will find no shortage of “carbon tax vs cap-and-trade” pieces pretty much the second you begin your preparation process. The sources will range from layman-friendly pieces in major publications to advanced scholarly papers in economics and environmental sciences running simulations and analyses of outcomes. We, naturally, have included a variety of cuts attesting to the respective costs and benefits of cap-and-trade in this brief. It’s a pretty saturated topic as far as think pieces and research articles go.

With that in mind, I’d like to cover point 1: the coexistence of carbon taxes and cap-and-trade. In most analyses you find, the mutual exclusivity of the two policies will either be implied or only quickly brushed over. If we’re talking realistic politics, hammering through even one of the two is a nightmare, much less both. Of course, in the business of PF, we’re focused on what should be done base on cost-benefit, not what will be done.

The exclusivity of the two policies is why the Con can get away with opportunity cost arguments, and why Pro teams cannot brush them off flippantly with the “well let’s do both” advocacy excuse. For such a framework to work, however, the Con has to justify that exclusivity. Understanding it will also ease the process of poring over many economic analyses of the two policies, since they rely on understanding the economic fundamentals of the cap.


February 2016 Topic AnalysisNext time you see a bridge, check out how the bridge interfaces with two points it’s connecting. For most basic designs and short spans, only one end of the bridge is actually “locked” into place. The other end of the bridge rests atop a roller or a simple support; it can move just a tiny bit. Let’s say that the bridge was locked at both ends. This would mean that any kind of huge force—most likely the slow accumulation of stress from the land supporting the bridge gradually shifting over time—would snap this bridge, since it’s brittle and fully “locked” into place. With one degree of freedom, the bridge is still sturdy, still “locked” in, but it can still adjust to environmental changes without collapsing.

A market is like a bridge: it requires a degree of freedom, and there’s no functional way to “lock” it from every side without greatly compromising it. In this case, carbon is the market. There are two possible ways to constrain (lock) this market. Either 1) the price is constrained, or 2) the supply of carbon is constrained. Both cannot be done simultaneously. If the price is constrained, the supply (output) will adjust to meet demand at that price. If the supply is constrained, this will drive the price to an appropriate level. To implement both constraints would thus introduce a needless redundancy which is inherently impossible.

A carbon tax is just a price constraint. This is somewhat unintuitive nomenclature, given that carbon is essentially “free.” In this context, it’s just an indication that the price of carbon is set. Conversely, cap-and-trade is a method to constrain the production of carbon dioxide. Assuming no one is advocating the dismantling of the market economy, the two are unlikely to coexist. By setting a price (implementing a carbon tax), the U.S. can guide the “market” to finding a suitable level of carbon dioxide to emit. The goal of carbon taxes is, of course, to find a high enough price to discourage production. Alternatively, the U.S. can set a limit on production.Putting a limit on what was previously infinite will naturally cajole the market into finding a suitable price. In both cases, the outcome is a “fixing” of one factor with extremely constrained (but not formally fixed) movement of the other. The outcome of one policy is the de facto implementation of the other. That’s why most discussions are (rightly) of carbon taxes vs cap-and-trade, and the discussion deals mostly with the respective policies externalities.

Given the wealth of information already present in the carbon taxes vs cap-and-trade discussion, this is a field where the Con is unlikely to get a clean victory. But with a greater-than-bare-basics understanding of opportunity costs and mutual exclusivities, the Con has a shot.

Another avenue for advocacy for the Con is a slight twist on the carbon tax in the form of a gas tax—more precisely, an increase in the existing gas tax. At a total of roughly $0.50 per gallon, the United States has one of the lightest levies in the developed world. At this point, most residents of OECD (Organization for Economic Cooperation and Development) nations pay more in gasoline tax than Americans pay for a gallon of gas including the American gas tax.

While I don’t consider it too viable an advocacy, the gas tax alternative could be a good exploration option for more technically-minded debaters. The scaffolding for a framework probably looks like this:

Transportation accounts for a smaller slice of the greenhouse gas pie than energy generation. But renewable energy technology (and nuclear, if we’re being generous) has the technological and economic potential for “natural” viability for power generation, accounting for the biggest slice of that pie without impacting consumption. Between battery technologies’ inadequacies and the unlikely possibility of game-changing advances (leaps in materials science take a full generation to reach consumers), reducing transportation’s share

February 2016 Topic Analysisof emissions boils down to reducing demand, which a gas tax accomplishes. Because the gas tax pinpoints the problem area, while a carbon tax penalizes an energy industry which can (and will) naturally correct itself, the penalties outweigh the harms. We can negate those harms and get environmental benefits with an increased gas tax.

Under the time constraints of round and the rigors of preparation, getting a real understanding of the topics and policies you’re dealing with can fly under the radar. But fundamentally, that arena is exactly where the long- term gains of PF will come from. The resolutions I felt most comfortable and confident were the resolutions where I knew I was better-prepared than the pair sitting across the podium from me—both in rhetoric and in fundamental understanding of the topic and its backstory (how it can be implemented, how it’s been implemented, how it actually works, why it works, etc.). It’s a valuable advantage, and one you should take the time to gain.

1 Bianco, Nicholas et al. “Can The U.S. Get There From Here?” World Resources Institute. 2013. Web. http://www.wri.org/sites/default/files/pdf/can_us_get_there_from_here_summary.pdf

An interesting read on emissions policy on its own merits. It dives deeply into existing and future U.S. policy independent of radical changes like carbon taxes or cap-and-trade and the various “paths” American emissions trends could take. Bonus points for beautiful data visualization.



Topic Analysis TwoWith a resolution this “short,” there are plenty of directions to move on either side of this case. Ideally, you’re not arguing the same thing with the same evidence as everyone else; and if you are, you’re at least doing it better. Winning a round definitively happens before you enter a tournament—a night of covering whiteboards in ideas or a day of trawling for niche evidence. There’s a certainty that comes from having thought through a resolution more thoroughly than the people you face. Let’s get the process started and work through how each side can try to turn a coin toss into a chip shot. I’ll be working through frameworks on the Pro and the Con separately.

Some qualification is necessary. As you might suspect, preparation is huge. But for a non-negligible proportion of rounds, the better team doesn’t win. Fundamentally, there will always be more relevant evidence than what you will ever have time for in round. Even if you hand-pick the juiciest data and best expert analysis, it’s difficult to demonstrate total weight of evidence in your speeches, especially when much of that precious time is spent directly addressing specific contentions made by the other side.

This is why rhetoric, to no one’s surprise, is a big deal. And rhetoric is a function of preparation. Greater levels of understanding and thought about the resolution enhance the ease by which you can generate creative, powerful arguments in round. It’s how you truly paint the picture of how “correct” you are to a lay judge. On the other side of the rhetorical coin sits advocacy. Yes, naturally, this isn’t CX debate. You’re not going to go into specifics. But the more you can give your judge a realistic glimpse of what you’re truly arguing for, the better picture they have of what you stand for. And correspondingly, the better your evidence and rhetoric sticks. As an added bonus, it tends to ground a debate in controllable territory by reducing both teams’ temptation to overuse counterfactuals and overly broad analytical evidence.

Pro Frameworks

At the top of the previous topic analysis, it was mentioned that a carbon tax covers two the biggest aspects of upcoming United States domestic legislation: fiscal (budgetary) policy and climate change. You can roll through this brief and sort every piece of evidence into a Venn diagram of these two topics. And you’ll likely be able to do the same thing once you’ve completed your own preparation.

These two pillars make for great frameworks. Teams have a couple options here. One is simply to construct a grand framework consisting of both pillars and simultaneously demonstrate environmental and economic impacts. One issue I could see running into here would be a simple lack of time to make clear, cogent arguments to bolster both frameworks. The other is just to pick one and run with it, using material prepared from the other framework to counter any rebuttals brought up by the Con as they probe for deficiencies. The “right” way to do it will really depend on persona preference and, frankly, interest in the material.

Climate change

Concerning climate change, the need to invest in some combination of mitigation and adaptation is beyond question. While the time frame may be flexible, and the mitigation-adaptation ratio is also up for debate, climate


February 2016 Topic Analysischange will have to figure into U.S. legislation in the near future. An advocacy is necessarily goal-oriented— what is a particular policy direction going to accomplish? If a team wishes to framework around climate change, then the ultimate desired positive impact of a carbon tax is the reduction of greenhouse gas emissions. This would be to both set a precedent for global action and to account for the United States’ share of responsibilities in the climate change fight.

In that case, the tangible, direct impact of a carbon tax is a reduction in usage. The onus is then on Pro teams to demonstrate links between carbon taxes and decreased carbon “consumption”. On paper, this line of thinking is validated by traditional economics: as the price of something goes up—in this case, a tax figures into the realistic price of a good—the demand for it goes down, eventually reaching a new equilibrium at a leftward point on the demand curve.

Teams can rely on two different branches of evidence to mount this argument, in either direction. The first is to use statistical models and projections; we have included the results of rigorous studies doing exactly that in this brief. Studies have shown that with most likely carbon tax policies, greenhouse gas abatement (reduction) by 2030 should sit somewhere between 10% and 30%.

As part of their baseline argumentation, teams will have to lay down criteria for acceptable levels of emissions reductions. The common goal for climate policy is to prevent a 2 degree Celsius rise in global temperatures. The goal will then be to demonstrate that the U.S. could use a carbon tax to meet the global rate for emissions reductions—the U.S. could not singlehandedly halt climate change, of course.

Of course, one of the major rebuttals every Pro team trying to run the environmental side of the equation will hit is some variant of the carbon taxes vs cap-and-trade debate. The Pro has no deficiency of evidence to back the establishment of either framework. With that in mind, the Pro should not have any difficulties holding their own against Con teams.

It’s important to remember that much of the evidence for that clash comes from either case studies in other countries or models and projections assuming certain costs for carbon and multiple contingencies within the American economy. And the models themselves vary wildly depending on the initial parameters laid out by the academics doing the modelling. While all the studies are (ostensibly) rigorous, the spread in their results is rather massive.

This is important because clash here likely will be a huge time-suck to win on the weight of evidence alone. Your time is valuable. While you shouldn’t be losing clashes, they also cannot be allowed to muddle the debate and preclude you from focusing on rhetoric and clashes that can more definitely win you the round. On the Pro, the best allocation of resources might be to get the environmental clash to a draw and absolutely crush the fiscal policy side of the equation.

Fiscal policy

To get this out of the way: for a Pro team dealing with a lay judge, the implication of the word “tax” in the resolution is something you’ll have to work around if you’re frameworking the economics of a carbon tax. Selling your side of a case is like selling any product: you need to read your audience and react accordingly. If you’re bringing the same speech to every judge, think about giving yourself more options.


February 2016 Topic AnalysisOne big consideration for Pro teams will be to properly define a carbon tax in a favorable way to advocacies. This entails framing the carbon tax as an action baked into a larger policy, rather than a policy in and of itself. This is to say that Pro teams should include not only the collection of revenue (the tax itself) but also the flow of that revenue (where it’s spent) in their definitional analysis of the carbon tax.

This will be incredibly helpful in presenting an advocacy, with at least three different routes based on what’s been done with carbon taxes internationally. The possibilities are covered with some detail in the applications discussion of a carbon tax’s implementation in the previous Topic Analysis, so I’ll refrain from rehashing old points.

Focusing on the affirmative case itself, economic policy is really the Pro’s biggest stick for bludgeoning the Con. For starters, carbon taxes are relatively simple conceptually; a lay judge can get on board in short time, which is valuable in the first speech. After that, Pro teams can let the weight of the evidence compound with their advocacies to do the work for them. The economic consensus is generally in favor of carbon taxes—and you’ll see plenty of it in this brief.

As far as rhetoric goes, carbon taxes are a great economic sell to lay judges as well. They allow Pro teams to sidestep the rhetorical quagmire of environmental policy and demonstrate benefits purely in terms of economics. Even if a Con team demonstrates that environmental concerns are of greater value than economic ones, the Pro can fight that clash to a draw and come away with a clean victory on the flow. Moreover, it’s a simple affair for the Pro to demonstrate gravity: there’s no shortage of evidence on the United States’ increasing levels of unsustainable debt and inequality. The key will be to “read” a judge upon entering a room: at least one of the two terms listed at the end of the previous sentence should stick.

As long as Pro teams are comfortable with the economics of a carbon tax, it doesn’t hurt to stress that the resolution proposes a free market-based solution to a climate problem. In that way, the harms of instituting a foreign economic system to deal with climate change are mitigated.

Con frameworksAfter reading both the Pro frameworks and the primer on carbon taxes, hopefully it becomes clear that the Pro’s pair of frameworks can easily be adapted by the Con. Again, I stress that the clash between cap-and-trade and carbon taxes is not likely to be won by either side cleanly. With that said, from at least a rhetorical and strategic point of view, the Con seems to have the upper hand in the climate fight.

If the Con wants to run cap-and-trade as a focal point (it’s doable—see the previous discussion of opportunity costs and why they’re particularly salient here), judges will need some clarification—it turns out that while many people know (or think they know) what cap-and-trade generally entails, few are familiar with how it works to the extent necessary to mount any kind of evidence-based argument on its behalf.

As mentioned earlier, the opportunity cost framework (and really most Con frameworks, it seems) begins on the premise that the environment is really going to be the crucible of American and international policy for the foreseeable future—or it at least ought to be. As you look through the Pro side of the evidence, you’ll notice no lack of cards talking about the need to reduce carbon emissions and the impacts of climate change as a harm on mankind’s quality of life. There’s really no appropriate way to sort that kind of evidence, because it’s important

February 2016 Topic Analysisfor both sides as a qualifier for the impacts of their arguments if they’re arguing the economy. But that evidence is going to be crucial for Con teams hoping to topple carbon taxes with some suitable alternative.

You’ll find ample evidence in this brief on both the relative importance of the climate question and the superiority of cap-and-trade to carbon taxes. It’s certainly manageable, and the evidence is both direct and impactful. Rhetoric, however, is what will put Con teams over the top.

I can’t stress enough that the operating principle of this strategy is a demonstration that the environment is the defining impactful framework for the debate. Once the Con can set that battlefield, they can also set up cap-and- trade—or really any carbon-limiting legislation—as the centerpiece to winning. The problem with carbon taxes is a fundamental one: they may limit emissions, but it’s indirect. They might force innovation, but they might not. The price increases might reduce demand in desirable ways, or it might not.

Carbon caps inherently sidestep this limitation. If limiting carbon dioxide emissions is the most important challenge humanity faces, the logical first step is to directly cap those emissions. Discussions of feasibility are likely not relevant—the precedent set internationally, as well as the viability of monitoring technology, ensure that implementation is a fight better suited for policy debate.

The Con also has recourse on the economics side of things. While the Pro has a multitude of advocacies at its disposal for dealing with the limitations of a carbon tax, the reality is that such a policy, isolated and analyzed on its own merits, is likely to be deeply regressive.

As a Con team, your job won’t be to ensure your lay judge has a fundamental understanding of what regressive taxation is—that’s likely too esoteric to be a valid use of your time. Instead, Con teams should focus on what a regressive tax means—that the poorest and most vulnerable populations are hit the hardest. Theoretically, both cap-and-trade and a carbon tax work the same way: the goal is to put a price on carbon that currently does not exists so as to limit its consumption.

The difference between the two policies is how they define the relationship between the public and the resolution’s actor: the state. With a cap-and-trade system, the actor sets the carbon limit and the markets dictate the price. This means that the actor is working toward a societal good—curbing climate change—while the externalities fall on the public.

Carbon taxes reverse this paradigm: the actor fundamentally works to penalize the public, while the hoped-for externality is societal good. Framed this way, a carbon tax is much more a perversion of the federal government’s role in public policy than cap-and-trade.

Wrapping upAs always, this brief is self-described: it should be the foundation, not the entirety of what you create. This topic has a surprising amount of maneuverability given its simplicity, and it’s a trait teams should take advantage of. As always, best of luck.


Pro Evidence


February 2016 Pro

InevitableThere is no real alternative to a carbon tax. LWZ

Jerry Taylor [president of the Niskanen Center]. The Conservative Case for a Carbon Tax. The Niskanen Center. March 23, 2015. http://www.ksg.harvard.edu/hepg/Papers/2015/Taylor%20Conservative%20Case% 20for%20a%20Carbon%20Tax.pdf

The alternative to a carbon tax is not a policy of ignoring climate risks. The alternative to a carbon tax is a plethora of command-and-control regulatory interventions at every level of government and subsidies for low- carbon technologies and practices. Those interventions already impose a sort of carbon tax. Regulatory costs increase the price we pay for energy-related goods and services. But unlike a carbon tax, the increased costs are invisible to consumers.

The alternative to a carbon tax would be command-and-control and expensive. LWZJerry Taylor [president of the Niskanen Center]. The Conservative Case for a Carbon

Tax. The Niskanen Center. March 23, 2015. http://www.ksg.harvard.edu/hepg/Papers/2015/Taylor%20Conservative%20Case% 20for%20a%20Carbon%20Tax.pdf

The carbon tax delivered by command-and-control regulation is uneven, invisible, inefficient, and economically incoherent. EPA’s proposed regulations for new coal-fired power plants (under section 111(b) of the Clean Air Act7 ) dictate carbon capture and storage technology that reduces CO2 emissions at a cost of $88-$131 per ton.8 The agency’s proposal for regulating existing power plants (“The Clean Power Plan,” issued under section 111(d) of the Clean Air Act) leaves the details up to the states, so it is unclear exactly what regulatory initiatives will follow.9 We can be sure, however, that they will be expensive. While the EPA does not provide aggregated cost estimates in their rulemaking,10 a study by the U.S. Chamber of Commerce puts the total regulatory price tag through 2030 at $478 billion, annual GDP losses over that period at $51 billion, and the cost of greenhouse gas emissions reductions under the EPA plan at $153-$163 per ton.11 This is much higher than the agency’s estimate of the social cost of carbon emissions in 2030: $17 per ton using a 5 percent discount rate, $55 per ton using a 3 percent discount rate, and $85 per ton using a 2.5 percent discount rate.12 Another study performed by NERA Economic Consulting for seven industry trade associations found that the Clean Power Plan will cost the energy sector $366-479 billion (assuming a 5 percent discount rate) over 2017- 2030. Retail electricity prices would increase by 12-17 percent.


February 2016 ProThe EPA will inevitably have the ability to regulate carbon emissions. LWZ


Although projecting compliance costs estimates far into the future for regulations that have not yet been written is fraught with uncertainty, the ambitious nature of the goals and timetables established by the EPA suggests that these higher compliance costs estimates are not implausible. The EPA’s authority to issue regulations to reduce greenhouse gas emissions is virtually unbounded and is well entrenched in the Clean Air Act.14 Reversing the EPA’s finding under section 202(a) of the Clean Air Act (known as the “endangerment finding”), which compels the EPA to regulate greenhouse gas emissions if they “cause or contribute to air pollution that may reasonably be anticipated to endanger public health or welfare,” would be extremely difficult. While a reversal could come administratively from some future EPA, that reversal would surely face a legal challenge requiring the EPA to demonstrate that the reversal was supported by “substantial evidence when considered on the record as a whole.”15 Given the fact that 97 percent of the papers in the scientific literature that take a position on the matter conclude that global warming is happening and that human activity is the main cause, it is doubtful that a court would allow a reversal to occur.16 Even if the endangerment finding were reversed, EPA could still regulate greenhouse gases via alternative regulatory pathways that require no such formal endangerment finding, such as when the agency is reviewing new emission sources in regions where significant deterioration of air quality is a concern and in the course of providing operating permits applicable to every major stationary source of air pollution (existing and new).17 Rewriting the Clean Air Act to remove EPA’s regulatory authority over greenhouse gas emissions is the most promising route for those who oppose regulatory intervention. But that strategy would require an almost unimaginable political scenario: first, conservative control of the White House, Congress, and a filibuster-proof super-majority in the Senate; and second, a political willingness to pay the opportunity costs associated with spending large amounts of political capital on an issue with relative low political salience.18


February 2016 ProFailure to adopt a carbon tax would result in even harsher impositions. LWZ


Lawsuits might stop the regulations, but only for a time. The agency’s rulemaking is vulnerable to a number of legal challenges.20 But as long as the EPA’s endangerment finding stands, a successful challenge to the rules will just send the agency back to the drawing board, with new rules to follow. There’s no guarantee that the new rules will be an improvement over the old rules. Many conservatives would like to take a page out of the Affordable Care Act resistance playbook and have state legislatures prevent their regulatory agencies from filing the required state implementation plans.21 The idea is to require EPA, rather than the states, to take political ownership of the economic consequences of the rulemaking.22 But even were this politically viable (how many Republican-controlled states are really prepared to surrender important regulatory decisionmaking to EPA bureaucrats?), EPA has more than enough resources and manpower to write the regulations directly.More importantly, federal implementation plans for the states would likely impose significantly higher compliance costs. According to NERA Economic Consulting, were states as a whole to leave rule-making to EPA: • 69 percent of coal-fired power generating capacity would be retired rather than 18 percent; • Coal-fired power generation would decline by 71 percent rather than by 29 percent; • Natural gas prices would increase by 29 percent rather than by 2 percent; and • Retail electricity prices would increase by 17 percent rather than by 12 percent.23 A future Republican EPA administrator could adopt a policy of regulatory delay by extending state implementation plan deadlines, half-heartedly defending industry legal challenges, dragging out rulemaking, and slow walking every step of the process. That can work, but it would only delay the inevitable. If the GOP takes the White House in 2016, it can buy time but it cannot buy a new policy. And it only works for as long as Republicans hold the White House.


February 2016 ProCommand-and-control regulation is worse than a carbon tax. LWZ


Hence, the political question is not whether government should act to control the emission of greenhouse gases. That question has been settled for the foreseeable future. The relevant political question is how government should control greenhouse gas emissions. Harvard economist Robert Stavins explains why command-and- control regulation is, in most circumstances, the most costly way of achieving emission reductions: Conventional approaches to regulating the environment are often referred to as “command-and-control” regulations, since they allow relatively little flexibility in the means of achieving goals. Such regulations tend to force firms to take on similar shares of the pollution-control burden, regardless of the cost. Command-and- control regulations do this by setting uniform standards for firms, the most prevalent of which are technology- based and performance-based standards. Technology-based standards specify the method, and sometimes the actual equipment, that firms must use to comply with a particular regulation. A performance standard sets a uniform control target for firms, while allowing some latitude in how this target is met. Holding all firms to the same target can be expensive and, in some circumstances, counterproductive. While standards may effectively limit emissions of pollutants, they typically exact relatively high costs in the process, by forcing some firms to resort to unduly expensive means of controlling pollution. Because the costs of controlling emissions may vary greatly among firms, and even among sources within the same firm, the appropriate technology in one situation may not be appropriate (costeffective) in another. Thus, control costs can vary enormously due to a firm’s production design, physical configuration, age of its assets, or other factors. One survey of eight empirical studies of air pollution control found that the ratio of actual, aggregate costs of the conventional, commandand- control approach to the aggregate costs of least-cost benchmarks ranged from 1.07 for sulfate emissions in the Los Angeles area to 22.0 for hydrocarbon emissions at all domestic DuPont plants. Furthermore, command-and- control regulations tend to freeze the development of technologies that might otherwise result in greater levels of control. Little or no financial incentive exists for businesses to exceed their control targets, and both technology-based and performance-based standards discourage adoption of new technologies. A business that adopts a new technology may be “rewarded” by being held to a higher standard of performance and not given the opportunity to benefit financially from its investment, except to the extent that its competitors have even more difficulty reaching the new standard.24 Carbon taxes remedy those problems. Again, Stavins: In theory, if properly designed and implemented, market-based instruments allow any desired level of pollution cleanup to be realized at the lowest overall cost to society, by providing incentives for the greatest reductions in pollution by those firms that can achieve these reductions most cheaply. Rather than equalizing pollution levels among firms (as with uniform emission standards), market-based instruments equalize the incremental amount that firms spend to reduce pollution – their marginal cost. Command-and-control approaches could – in theory – achieve this cost-effective solution, but this would require that different standards be set for each pollution source, and, consequently, that policy makers obtain detailed information about the compliance costs each firm faces. Such information is simply not available to government. By contrast, marketbased instruments provide for a cost-effective allocation of the pollution control burden among sources without requiring the government


February 2016 Proto have this information. In contrast to command-and-control regulations, market-based instruments have the potential to provide powerful incentives for companies to adopt cheaper and better pollution-control technologies. This is because with market-based instruments, particularly emission taxes, it always pays firms to clean up a bit more if a sufficiently low-cost method (technology or process) of doing so can be identified and adopted.25

A market based approach is better than the other approaches the government might adopt.LWZ


For these reasons, free market economists have long embraced emission taxes in lieu of direct regulation.26 A carbon tax quantifies in dollar terms the risk associated with emitting greenhouse gases into the atmosphere, although how well those risks are reflected in the tax depends upon policy design and the assumptions behind that design. Climate risks, after all, are associated with costs, and those costs are not accounted for in the price for fossil fuels at present. Prices for fossil fuels (the main source of man’s greenhouse gas emissions) do not reflect the total costs associated with consumption. Consumers consequently buy more fossil fuels (and generate more greenhouse gases) than would be the case if the information embodied in fossil fuel prices were accurate.27 The most direct way to better inform market decisions is to correct inaccurate price signals with a tax. Under the best of circumstances, the correct rate for a carbon tax is based on educated guesses (the best we can do at present) about: (1) The wealth losses that we think are most likely to follow from global warming; in addition to (2) The wealth losses that might follow from low-probability, high-cost catastrophic events, discounted by the chance that they will never occur; adjusted by (3) Our revealed preferences regarding our willingness to pay to avoid non-diversifiable risks associated with (2); discounted by (4) The higher value we demonstrably have for wealth today versus wealth tomorrow. Given that the political choice today is between carbon taxation and command-andcontrol regulation, conservatives betray their market principles by rejecting the former and, consequently, locking in the latter.28 As University of Chicago economist John Cochrane says to those who believe doing anything about climate change is a waste of money, “Look, if we're going to waste money, let's minimize the damage.”29


February 2016 Pro

A Carbon Tax Would Strengthen The Economy

The tax increases government revenue. ABHDinan, Terry. [Senior Advisor at the Congressional Budget Office] “Effects of a

Carbon Tax on the Economy and Environment.” Congressional Budget Office. 2013. Web. Accessed January 2, 2016. (p.1-2)

Neither the Congressional Budget Office (CBO) nor the staff of the Joint Committee on Taxation has published an estimate of how much revenue a carbon tax might produce. However, CBO has extensively analyzed policies, known as cap-and-trade programs, that would similarly set a price on CO2 emissions. Those analyses suggest that a carbon tax that covered the bulk of CO2 emissions or the carbon content of most fossil fuel consumed in the United States could generate a substantial amount of revenue. For example, in 2011, CBO estimated that a cap-and-trade program that would have set a price of $20 in 2012 to emit a ton of CO2 (and increased that price by 5.6 percent each year thereafter) would raise a total of nearly $1.2 trillion during its first decade.1 In addition, total U.S. emissions of CO2 would be about 8 percent lower over that period than they would be without the policy, CBO estimated.

PRO can draw a variety of beneficial impacts from the government having more revenue. The link is fairly straightforward, as most taxes would increase government revenue.


February 2016 ProIncreased government revenue can stimulate the economy. ABH

Dinan, Terry. [Senior Advisor at the Congressional Budget Office] “Effects of a Carbon Tax on the Economy and Environment.” Congressional Budget Office. 2013. Web. Accessed January 2, 2016. (p.2-3)

Lawmakers’ choices about how to use the revenues from a carbon tax would help determine the tax’s ultimate impact on the economy. Some uses of those revenues could substantially offset the total economic costs resulting from the tax itself, whereas other uses would not.

Using the Revenues to Reduce Deficits Would Decrease the Tax’s Total Costs to the Economy.

At least part of the negative economic effect of a carbon tax would be offset if the tax revenues were used for deficit reduction. Federal budget deficits tend to result in lower economic output over the long run than would otherwise be the case, by crowding out private-sector investment. Thus, policies that reduce deficits generally have a positive effect on the economy in the long run (although they can have a negative effect in the short term when the economy is weak).

Using the Revenues to Cut Marginal Tax Rates Would Also Decrease Total Costs.

Lawmakers could also offset some of the negative economic effects of a carbon tax by using the revenues to reduce the existing marginal rates of income or payroll taxes—a policy known as a tax swap. Existing taxes on individual and corporate income decrease people’s incentives to work and invest by lowering the after-tax returns they receive from those activities. Consequently, reducing those marginal tax rates would have positive effects on the economy.

These two policies are just a few examples of how increased government revenue can improve overall economic welfare.


February 2016 ProA Carbon tax increases overall economic efficiency in various ways. ABH

Ramseur, Jonathan. [Specialist in Enviornmental Policy]. “Carbon Tax: Deficit Reduction and Other Considerations.” Congressional Research Service. 2013. Web. Accessed January 11, 2016.

Economic theory suggests that a carbon tax could improve the efficiency of the economy by at least three means:46 • first, markets could produce a more optimal mix of goods and services if the costs of emitting GHG while manufacturing products, providing services, or using goods were “internalized” into market prices; producers and consumers would more fully respond to the full costs of their decisions, resulting in a more economically efficient outcome; • second, a tax on an activity that yields pollutants, such as GHG emissions,47 would discourage the polluting activity and therefore could be more efficient than an alternative tax that yields the same revenues but discourages a beneficial activity (e.g., investment); and • third, adding a smaller tax on a new activity, such as potential carbon emissions, could be less distortionary to production and consumption than increasing the tax rate on currently taxed activities.48

A carbon tax increases economic efficiency by creating revenues while discouraging an activity (pollution) that causes economic harm.

Carbon taxes correct the market failure of pollution. ABHRamseur, Jonathan. [Specialist in Enviornmental Policy]. “Carbon Tax: Deficit

Reduction and Other Considerations.” Congressional Research Service. 2013. Web. Accessed January 11, 2016.

Not all results from economic activity are considered desirable—pollution being one example. When producers or consumers discharge pollution—including GHG emissions—to another person’s private property or a publicly shared resource—such as the atmosphere—without paying to do so, they are not paying for the full cost of a product or activity. Economists would describe this outcome as a “market failure,” because the costs associated with GHG emissions are not captured in the economic decision process. Economists contend that levying a charge on GHG emission would be an economically efficient way to correct the failure.54 For example, in terms of environmental policy, fossil fuel prices do not reflect the costs— related to climate change and ocean acidification damages—associated with the GHG emissions. A pollution discharge fee could internalize these external costs into market prices. A primary argument in favor of a carbon tax is that it would, in theory, increase the efficiency of markets by discouraging “bad” activities. A carbon tax would discourage pollution that imposes costs on others who do not necessarily benefit from the polluting activity. These may include future generations that bear the dislocations of climate change, or fishery sectors in developing countries that experience lower yields in acidified oceans.

Pollution is a market failure, because nobody pays for the harm done to society or even private property caused by carbon emissions. A carbon tax corrects this failure, by adjusting the cost of carbon emissions to reflect these damages.


February 2016 Pro

A carbon tax would contribute to massive deficit reduction. ABHRamseur, Jonathan. [Specialist in Enviornmental Policy]. “Carbon Tax: Deficit

Reduction and Other Considerations.” Congressional Research Service. 2013. Web. Accessed January 11, 2016.

The possible contribution of a carbon tax to deficit reduction would depend on the magnitude and scope of the carbon tax, various market factors (discussed above), and assumptions about the size of the deficit. In February 2013, CBO released budget projections for fiscal years 2013 to 2023. Under current law, CBO estimated the 10- year budget deficit at $6.8 trillion, or 3.4% of GDP.73 However, using an alternative fiscal scenario,74 CBO projected a larger deficit—$9.1 trillion, or 4.5% of GDP. Enacting the carbon tax options discussed in the previous section could reduce future budget deficits. As illustrated in Figure 4, a $20/mtCO2 price on carbon (increasing by 5.6% annually) would have a considerable impact on budget deficits using CBO’s February 2013 baseline projection. • The 10-year budget deficit could be reduced from $6.8 trillion to $5.6 trillion, or from 3.4% to 2.8% of GDP. • Overall, a $20/mtCO2 price on carbon would reduce the 10-year budget deficit by more than 17%.75. Under CBO’s alternative fiscal scenario, the same carbon tax would have a smaller impact on budget deficits. • The deficit would be reduced from $9.1 trillion to $7.9 trillion, or from 4.5% to 3.9% of GDP.• Overall, a $20/mtCO2 price on carbon would reduce the 10-year budget deficit by about 13%.

These are good statistics for PRO to use to show by how much a reasonable carbon tax could reduce the deficit.


February 2016 ProA survey of revenues projected by academic studies. DAT

Morris, Adele [Brookings Institution] and Aparna Mathur [American Enterprise Institute]. “A Carbon Tax in Broader U.S. Fiscal Reform: Design and Distributional Issues.” Center for Climate and Energy Solutions. May 2014. Web. 11 January 2015. http://www.brookings.edu/~/media/research/files/papers/2014/05/22-carbon- tax-broader-us-fiscal-regulation- morris/05222014_carbon_tax_broader_us_fiscal_reform_morrisa_mathura.pdf

The point here is not for Pro teams to cherrypick the most applicable study, but to provide Pro teams with some weight of evidence and present a credible range for estimates of positive impacts of carbon taxation.


February 2016 ProA carbon tax makes sense as oil prices are falling. LWZ

Garver, Rob, National Correspondent for The Fiscal Times. "Low Oil Prices Pave the Way for New Carbon Taxes." The Fiscal Times. The Fiscal Times, 5 Jan. 2015. Web. 11 Jan. 2016. <http://www.thefiscaltimes.com/2015/01/05/Low-Oil-Prices- Pave-Way-New-Carbon-Taxes>.

“The case for carbon taxes has long been compelling,” Summers wrote. “With the recent steep fall in oil prices and associated declines in other energy prices, it has become overwhelming. There is room for debate about the size of the tax and about how the proceeds should be deployed. But there should be no doubt that, given the current zero tax rate on carbon, increased taxation would be desirable.” Summers’ call for a carbon tax came just a day after prominent Republicans discussed the possibility of an increase in the federal gas tax to shore up the Federal Highway Trust Fund, which will run out of money this May. The tax has been at 18.4 cents per gallon, without being adjusted for inflation, for more than 20 years. Sen. Bob Corker (R-TN) has advocated raising that tax to match inflation by 12 cents over two years as a means of creating a dedicated source of funding – a sort of user fee – for the federal highway system. Appearing with Corker on Fox News Sunday, Sen. John Thune (R-SD), who will chair the Commerce Committee in the new Senate, said he couldn’t rule out the possibility of raising the tax.

A carbon tax makes sense economically. LWZGarver, Rob, National Correspondent for The Fiscal Times. "Low Oil Prices Pave

the Way for New Carbon Taxes." The Fiscal Times. The Fiscal Times, 5 Jan. 2015. Web. 11 Jan. 2016. <http://www.thefiscaltimes.com/2015/01/05/Low-Oil-Prices- Pave-Way-New-Carbon-Taxes>.

Summers’ argument for a broader tax is largely economic. “That which is not paid for is overused,” he writes. This applies to energy in the U.S. because the use of fossil fuels creates what economists call “externalized costs.” When a driver burns a gallon of gas in his car, he is paying for all the costs of extracting and refining oil and delivering gasoline to a filling station. However, he is not contributing anything toward the remediation of the effects of air pollution caused, in part, by his own vehicle’s exhaust. The same argument applies to power plants that release damaging emissions or foul waterways. The full price of their operations is not reflected in their costs. A carbon tax would attempt to capture the currently externalized costs of burning fossil fuels – basically compensating broader society for the costs it now bears to the advantage of people and companies that use large amounts of carbon-emitting energy.


February 2016 ProOil companies want a carbon tax. LWZ

Kent, Sarah, Covers OPEC for the Wall Street Journal and Dow Jones Newswires, and Justin Scheck, London-based Reporter for the Wall Street Journal. He Covers Large European Oil Companies and Other Energy-related Stories. "Carbon-Tax Debate Brings Together Unusual Allies." WSJ. Wall Street Journal, 30 Nov. 2015. Web. 11 Jan. 2016. <http://www.wsj.com/articles/carbon-tax-debate-brings- together-unusual-allies-1448936246>.

Several big oil companies have fallen into unlikely alignment with environmental groups calling for new taxes on air polluters like coal-burning power plants. One key reason: Those taxes are probably good for their natural- gas businesses. Energy giants including Royal Dutch Shell PLC and BP PLC hope a so-called carbon tax— which would force companies to pay for their emissions and likely increase oil producers’ costs—also would increase demand for natural gas, an increasingly significant part of their output. The companies are part of a collection of business interests, environmental activists and economists that have urged negotiators meeting at aU.N. climate-change summit in Paris over the next two weeks to consider potential carbon pricing policies as a tool to curb emissions. Such programs could open new markets in China and elsewhere for gas to displace coal.

Oil companies see the carbon tax as a business opportunity. LWZKent, Sarah, Covers OPEC for the Wall Street Journal and Dow Jones Newswires,

and Justin Scheck, London-based Reporter for the Wall Street Journal. He Covers Large European Oil Companies and Other Energy-related Stories. "Carbon-Tax Debate Brings Together Unusual Allies." WSJ. Wall Street Journal, 30 Nov. 2015. Web. 11 Jan. 2016. <http://www.wsj.com/articles/carbon-tax-debate-brings- together-unusual-allies-1448936246>.

The embrace of carbon taxes demonstrates how some oil companies now see a business opportunity as efforts to enact climate-change policies gain momentum. While not entirely new, oil companies have become more vocal in their support for carbon taxes in recent years. Oil companies including BP, Shell and France’s Total SA joined forces in recent months to push for action on climate change, calling for taxes to encourage the use of cleaner-burning gas over coal. BP has said switching just 1% of world-wide power production to gas from coal would have an equivalent emissions reduction as increasing renewable-energy generation by 11%. Exxon Mobil Corp. isn’t part of the coalition, but in recent years it has expressed support for a carbon tax, provided it is offset by tax reductions elsewhere.

February 2016 ProBusinesses want a carbon tax. LWZ

Mahe, Stephane. "Why Is the Business World Suddenly Clamouring for a Global Carbon Tax?" The Conversation. The Conversation, 10 Dec. 2015. Web. 11 Jan. 2016.<http://theconversation.com/why-is-the-business-world-suddenly-clamouring-for-a- global-carbon-tax-52127>.

Among the various interests at the Paris climate talks, it is arguably the voice of business that has emerged most clearly. Many business leaders are now saying that if the world is intent on reducing greenhouse gas emissions, there must be a worldwide price on carbon and a framework for linking the 55 schemes that exist in areas such as China, the European Union, and California. Momentum has been building since May, when six of Europe’s largest oil and gas companies, including Royal Dutch Shell and BP, issued a letter calling for global carbon pricing system. That month, leaders from 59 international companies also signed a statement calling for carbon pricing to feature in the Paris agreement. Advocacy has continued during the Paris negotiations. For example, Patrick Pouyanné, chief executive of French oil and gas giant Total, argued that the shift from coal to gas “will not happen without a carbon price”. He suggested that a price of US$20-$50 in Europe was required (well above the current price). Oleg Deripaska, president of the world’s largest aluminium producer Rusal, put the issue in stronger terms, describing the idea of voluntary national emissions commitments (upon which the Paris agreement largely hinges) as “balderdash”.

Businesses know that restrictions are inevitable so a carbon price would be the best option.LWZ


It is not clear whether a carbon price will figure in the Paris agreement. But it is important to consider what is motivating some of the world’s highest-emitting companies to advocate for a carbon price. And what other, perhaps more intrusive plans for tackling climate change would be taken off the table? Businesses have a stronger presence at COP21 than at any previous climate negotiation. They know which way the wind is blowing and realise that governments might require painful and complex interventions to reduce emissions. Moves are afoot to decarbonise the world economy some time after 2050 (see Article 3 of the latest draft text, and there has been strong advocacy for a moratorium on new coal mines. Helge Lund, chief executive of British oil multinational BG Group, argues that a carbon price reduces government intervention and attempts at “pick[ing] winners in terms of energy technologies.” Instead, he argues: “the market will dictate the most efficient solution”.


February 2016 ProCompanies maintain economic growth by shifting energy focus. LWZ


One way for energy companies to maintain economic growth in a carbon-priced economy is to shift investments gradually away from coal and oil, and towards gas. That is why Shell has paid US$70 billion for the BG Group. Of course gas might come under similar pressure in time, but as the Financial Times has reported: …oil companies’ skills and assets mean that finding and extracting gas is a short and natural step. Moving into renewable energy is a much bigger leap. This can be seen in the many examples where energy companies have struggled to develop other forms of energy, such as BP’s ill-starred attempt to brand itself as “beyond petroleum” and invest US$8 billion over ten years in renewable energy. The company has since backtracked on that goal, has left the solar market, and has no plans to expand its onshore wind investments.

While carbon pricing won’t fix all problems, it is a good first step. LWZMahe, Stephane. "Why Is the Business World Suddenly Clamouring for a Global Carbon

Tax?" The Conversation. The Conversation, 10 Dec. 2015. Web. 11 Jan. 2016.<http://theconversation.com/why-is-the-business-world-suddenly-clamouring-for-a- global-carbon-tax-52127>.

Of the 185 countries that have submitted climate targets ahead of the Paris talks, more than 80 have referenced market mechanisms. Clearly, a price on carbon is going to play a role in attempts to tackle climate change. This is a good thing but it is not sufficient and must not become a distraction from other serious interventions. Recent research confirms that we do not have time to wait for energy companies to transition at their own pace from fossil fuels to renewable energy. For example, last week Kevin Anderson from the Tyndall Centre for Climate Change Research published a paper in Nature Geoscience which argued: The carbon budgets associated with a 2℃ threshold demand profound changes to the consumption and production of energy … the IPCC’s 1,000 gigatonne budget requires an end to all carbon emissions from energy systems by 2050. A carbon budget consistent with 2℃ (let alone 1.5℃) requires a dramatic reversal in energy consumption and emissions growth. Governments should treat overtures from business with caution, even if businesses are making the right moves. They need to ensure that these moves are made at a speed that suits the climate, rather than just business.


February 2016 ProCompanies want carbon pricing to maintain stability. LWZ

Ballor, Jordan J., Research Fellow at the Acton Institute for the Study of Religion & Liberty. "Why Big Oil Wants A Carbon Tax." The Federalist. The Federalist, 29 June 2015. Web. 11 Jan. 2016. <http://thefederalist.com/2015/06/29/why-big-oil- wants-a-carbon-tax/>.

Late last month, six oil companies, including BP and Royal Dutch Shell, wrote a letter to the United Nations (UN) in which they argue that “a price on carbon should be a key element” of inter-governmental action to address climate change: “Pricing carbon obviously adds a cost to our production and our products – but carbon pricing policy frameworks will contribute to provide our businesses and their many stakeholders with a clear roadmap for future investment, a level playing field for all energy sources across geographies and a clear role in securing a more sustainable future.” So one clear advantage of governments pricing carbon through a tax would be stability and predictability. Even though the cost of the products these oil companies produce would be increased, such increases would be transparent and relatively forthright, as opposed to the uncertainty that comes with, as the companies put it, “participating in existing carbon markets and applying ‘shadow’ carbon prices in our own businesses to test whether investments will be viable in a world where carbon has a higher price.” Corporations certainly like predictability and stability in legal and regulatory regimes, and it is prudent for them to be proactive in shaping those regimes wherever possible.

Fossil fuels aren’t taxed equally, so companies want a carbon tax for their own benefit. LWZBallor, Jordan J., Research Fellow at the Acton Institute for the Study of Religion &

Liberty. "Why Big Oil Wants A Carbon Tax." The Federalist. The Federalist, 29 June 2015. Web. 11 Jan. 2016. <http://thefederalist.com/2015/06/29/why-big-oil- wants-a-carbon-tax/>.

The New York Times’ David Brooks notes this reality as part of his engagement with the latest papal encyclical, “Laudato Si”: “There’s some evidence that fracking is a net environmental plus. That’s because cheap natural gas from fracking displaces coal…. Because natural gas has just half as much global-warming potential as coal, energy-related carbon emissions have declined more in the U.S. than in any other country over that time.” The relative competitiveness of various fuel types in relation to carbon costs is also why, contrary to conventional wisdom, a recent study has found that gas vehicles may be actually better for the environment than electric cars. Because coal is still the source of the majority of electricity in the United States, cars that rely on electricity are actually largely relying on coal. Advocates of a carbon tax hope that increasing the cost of fossil fuels will make other sources of energy more competitive and realistic alternatives. Often the relative advantage a carbon tax would confer is cast in terms of renewables (e.g. wind, solar) against fossil fuels (e.g. coal, natural gas). But carbon taxes do not affect all fossil fuels equally. So just as some fossil fuels are much more carbon- intensive than others, here we can begin to understand how, beyond the benefits of predictability, a carbon tax might actually help some fossil-fuel providers just as it has helped reduce carbon emissions in the United States. Thus, as Vox’s David Roberts puts it, “fossil fuel companies requesting a tax on their own products makes more sense than might first appear.”


February 2016 ProA carbon tax would make energy companies more competitive in the market place. LWZ

Ballor, Jordan J., Research Fellow at the Acton Institute for the Study of Religion & Liberty. "Why Big Oil Wants A Carbon Tax." The Federalist. The Federalist, 29 June 2015. Web. 11 Jan. 2016. <http://thefederalist.com/2015/06/29/why-big-oil- wants-a-carbon-tax/>.

So, while the oil advocacy letter was addressed to the UN, if we shift focus to the domestic situation in the United States, the ways in which a carbon tax might benefit some fossil-fuel companies becomes a bit clearer. Bloomberg View editorializes in support of the “Big Oil” letter to the UN, and notes, however, that none of the signatories “is based in the U.S. Still, their argument should resonate in Washington: ‘Clear, stable, long-term’ policies that make carbon more expensive (the letter never uses the word ‘tax’) are necessary to reduce uncertainty, stimulate investment and encourage the most efficient reductions in emissions.” Such “efficient reductions” include switching from coal to natural gas for energy production. As a recent National Bureau of Economic Research working paper illustrates, for example, in the United States a tax on carbon would disproportionately impact the use of coal relative to natural gas for energy production. As Joseph A. Cullen and Erin T. Mansur write, “Higher carbon prices make coal-fired power plants less competitive than natural gas- fired power plants.” Mansur, a business professor at Dartmouth College, also co-authored the paper on electric versus gasoline vehicles. When examining the complex issues related to debates over climate change and energy policy, it is important to keep in mind the comparative and relative advantages and disadvantages of various energy sources in varying contexts. Relative to certain kinds of coal-burning power plants, for instance, reliance on natural gas can become a carbon-reducing alternative, just as gas-powered cars can be better alternatives than coal-cum-electric cars. Against the common understanding, then, there is some real evidence to argue that the shale boom in North America may have helped to reduce rather than to exacerbate CO2 emissions. Cullen and Mansur show how anything that positively affects the price of natural gas relative to coal, including but not limited to a carbon tax, might work to reduce CO2 emissions. Switching from coal to natural gas in the United States could have a significant impact on carbon emissions in part because coal, a carbon- intensive source of energy, is the dominant source of electricity. Don’t be surprised, then, if some domestic producers of natural gas end up promoting a carbon tax, not only out of concern for regime stability but also out of a concern to make their product more competitive in the energy marketplace.


February 2016 ProA carbon tax may improve taxes. LWZ


Meeting greenhouse gas emissions targets with a tax rather than with regulation produces revenue that can be used for lump sum rebates54 or to offset tax cuts elsewhere. Suggestions have been made to use those revenues to offset cuts in the corporate income tax, the capital gains tax, personal income taxes, payroll taxes, and sales taxes.55 If the carbon tax is less economically harmful than the tax it displaces, a revenue neutral carbon tax is worth embracing even if we leave aside the environmental benefits.56 Although it is unclear whether a carbon tax swap produces net benefits aside from any consideration of environmental benefits,57 the important point is that a revenue neutral carbon tax delivers tax cuts. The implicit taxes imposed by command-and-control regulation do not. Whether those offsetting tax cuts completely offset the economic cost of a carbon tax is less important than the fact that offsetting tax cuts will produce significant economic benefits that command-and- control regulation cannot produce.


February 2016 ProMorris’s plan has conservative support and is economically viable. LWZ


There is a strong intellectual argument for initially setting the carbon tax at a relatively high level and then adjusting it downward as warranted by climate feedbacks.58 Most climate tax proposals, however, initially set the tax at a relatively low level and increase the rate in a fixed manner over time. Phasing in a carbon tax over time allows industries and consumers to gradually adjust to the tax while establishing a clear market signal that encourages investments in energy conservation and low carbon energy sources. While there are many different ways in which one might construct a carbon tax package,59 the center of political gravity in Washington’s carbon tax policy community is occupied by economist Adele Morris of the Brookings Institution. Morris’s proposal offers hope that a politically and economically attractive deal is possible for conservatives.60 She suggests: • A tax of $16 per ton of carbon dioxide equivalent levied on fossil fuel production at the upstream choke point in its distribution, select industrial sources of large greenhouse gas emissions, and imported fossil fuels. The tax would rise 4 percent per year after inflation through 2050. This works out to an initial tax increase of about 16 cents per gallon of gasoline and $30 per short ton of coal.61 • Energy-intensive exporters would receive temporary border carbon adjustments so as not to disadvantage exports to countries with less ambitious climate change policies. • 15 percent of the revenues would be reserved to compensate the households at or below 150 percent of the poverty level, completely offsetting the impact of the tax on those households. • Over the first decade, nearly all of the remaining revenue would be used to offset a permanent reduction in the top corporate tax rate from 35 to 28 percent. • Suspension of EPA greenhouse gas regulations under the Clean Air Act for eight years. The regulations would come back only if the tax failed to reduce emissions as projected. • Repeal of federal energy efficiency standards and subsidies and mandates for renewable energy, biofuels, electric-powered vehicles, and nuclear power (almost $6 billion in tax expenditures per year). Morris calculates that her carbon tax would bring in about $88 billion in the first year, rising to $200 billion a year after 20 years, and provide a net deficit reduction of $815 billion over that period. Greenhouse gas emissions, meanwhile, would be 9.2 billion metric tons lower than would otherwise be the case over that 20-year period. Energy price increases would of course follow from even a modest carbon tax. If Morris’s tax were fully passed on to consumers (which is highly unlikely62), retail prices of electricity, gasoline, and home heating oil would increase by 5-6 percent in the short run, while natural gas prices would increase by 19 percent. The tax-driven price increases that would follow from Morris’s plan, however, are no greater than the “noise” that consumers normally encounter in fuel markets. The standard deviation in oil prices from quarter-to-quarter is a bit more than 15 percent.63 Natural gas and electricity prices in the United States have historically been even more volatile.64 Consumers and the economy as a whole routinely adjust to price increases that are more significant than those put on the table by a carbon tax. Morris, like many, believes that the net impact of trading a corporate income tax cut for a carbon tax will produce a slight boost in GDP, employment, and wages. Even if the macroeconomic gains from the tax swap are overstated, the net cost to the economy would likely be too small to detect.


February 2016 ProWith a few modifications, Morris’s plan should satisfy most conservative complaints. LWZ


Adele Morris’s plan should be acceptable to conservatives, but it could be made more attractive to the Right. In an ideal world, a carbon tax bill would also preempt state and regional greenhouse gas cap-and-trade programs. Doing so would allow the marginal costs of greenhouse gas emission reductions to remain the same everywhere in the country, maximizing the economic efficiency of the program. Preempting state renewable energy portfolio standards should also be on the table. Those programs, which mandate the production of specified renewable energies, would be unnecessary were greenhouse gas emissions priced correctly. Moreover, revenue from the carbon tax—and the corresponding size of the offsetting tax cuts stipulated in the bill—would be larger as a result. Congress should also use this opportunity to repeal Corporate Average Fuel Efficiency (CAFE) standards for the U.S. transportation fleet. If the price for gasoline is correct— that is, if it incorporates the full environmental costs imposed by gasoline consumption—there is no market failure remaining for government to correct via regulation. Recently, 41 prominent economists were asked whether they agreed with the statement “A tax on the carbon content of fuels would be a less expensive way to reduce carbon-dioxide emissions than would a collection of policies such as ‘corporate average fuel economy’ requirements for automobiles.” Ninety percent of the economists agreed.65 Finally, EPA regulatory authority over greenhouse gases should be permanently repealed. If emissions are not declining in a satisfactory manner—or if the climate problem appears even more serious than is presently believed—additional emissions reductions should be secured by increasing the tax, not falling back on command-andcontrol regulation.


February 2016 Pro

The Coexistence of Carbon Taxes and a Thriving Free MarketApplying carbon taxes is the recommended action based on fundamental economics. DAT

“Do Economists All Favour a Carbon Tax?” The Economist. 19 September 2011. Web. 11 January 2016. http://www.economist.com/blogs/freeexchange/2011/09/climate-policy

Why would we expect economists to support a carbon tax? It's very close to the economic ideal. Global warming is a phenomenon associated with emissions of greenhouse gases over and above natural cycles—largely those resulting from the burning of carbon fuels humans have dug up out of the ground. We expect normal economic activity to maximise social good because each individual balances costs and benefits when making economic decisions. Carbon emissions represent a negative externality. When an individual takes an economic action with some fossil-fuel energy content—whether running a petrol-powered lawnmower, turning on a light, or buying bunch of grapes—that person balances their personal benefits against the costs of the action. The cost to them of the climate change resulting from the carbon content of that decisions, however, is effectively zero and is rationally ignored. The decision to ignore carbon content, when aggregated over the whole of humanity, generates huge carbon dioxide emissions and rising global temperatures.

The economic solution is to tax the externality so that the social cost of carbon is reflected in the individual consumer's decision. The carbon tax is an elegant solution to a complicated problem, which allows the everyday business of consumer decision making to do the work of emission reduction. It's by no means the only economically sensible policy response to the threat of climate change, but it is the one we'd expect economists to embrace.

The point here is not to be bogged down in theory. The point is to destigmatize the idea of carbon tax as being a normal, rational course of action rather than something unprecedented. By breeding a sort of “familiarity” between judges and the idea of a carbon tax, Pro teams should see less resistance in punching through with their more substantive arguments.


February 2016 ProCarbon taxes are sound fiscal legislation. DAT

Fay, Marianne and Stephane Hallegatte [World Bank economists. “Thinking Beyond a Global Carbon Price.” The Economist. 24 June 2015. Web. 11 January 2015. http://www.economist.com/blogs/freeexchange/2015/06/decarbonising-development

Looking at carbon prices through a narrow climate lens provides only part of the picture. Over and above environmental concerns, carbon and energy taxes make economic and fiscal sense, making them relevant for both developing and developed countries. By taxing the “bads” (carbon), countries can reduce taxes on the “goods” (labor and capital). Carbon taxes are also easier to administer as carbon sources are concentrated. Experience shows that tax evasion for carbon or energy taxes is much lower than for VAT or income taxes (e.g. 1% instead of 17% in the UK). This should make carbon taxes the darling of any tax collector, especially in countries with weak fiscal administration and a large informal sector.

Fossil fuel consumption also affects more than just the climate. Congestion and air pollution are also undesirable by- products. Estimates are that health impacts alone could justify a carbon price well above $30 per ton. Since fiscal needs and local co-benefits vary across countries and contexts, there is no reason for an “optimal” carbon price to be the same everywhere.

Assuming that taxation is necessary, the optimal outcome for tax policy is the taxation of societal “harms” to fund activities that are positively impactful. This presents an intuitive yet likely unconventional framework for the Pro: entirely independent of environmental benefits, carbon taxes, as a replacement for other “conventional” taxes, are a sound fiscal and social piece of legislation.


February 2016 ProRevenue-neutral carbon taxes are a high-upside, bipartisan solution. DAT

Halstead, Ted. “The Republican Solution for Climate Change.” The Atlantic. 16 November 2015. 11 January 2016. http://www.theatlantic.com/politics/archive/2015/11/a-conservative-approach-to- addressing-climate-change/415887/

The idea of a revenue-neutral carbon tax is hardly new. My colleagues Clifford Cobb, Jonathan Rowe, and I wrote about this 20 years ago in an Atlantic cover story. What’s new is that in 2008, the right-of center government in British Columbia introduced such a plan, and sufficient time has now passed to weigh the results. Fossil fuel use in British Columbia has since fallen by 16 percent, as compared to a 3 percent increase in the rest of Canada, and its economy has outperformed the rest of the country. So the benefits of this approach are no longer theoretical.

The next question is how revenue generated from carbon taxes should be returned to the American people. The Alaska Permanent Fund, which pays out an annual dividend to all residents, and was first introduced by a Republican governor in a state known for its libertarian tendencies, provides a useful precedent. But unlike theAlaskan model, which derives its revenues from resource extraction and therefore encourages fossil fuel use, a climate dividend funded by a carbon tax would encourage the precise opposite: efficiency and cleaner energy.

All citizens would suddenly have an economic stake in reducing greenhouse gases. There is no free lunch here, but rather a highly incentivized, à la carte, one: The bigger your carbon footprint, the more you pay; the smaller your footprint, the more you benefit as all revenue raised would be distributed equally. So if, for example, you choose to drive a gas-guzzler, your costs will go up, but if you switch to a more efficient car or public transportation, you come out ahead. Each year, both the carbon tax and corresponding dividend would increase, until the country reaches a low carbon economy.

This isn’t necessarily groundbreaking evidence. However, this card presents a great look at what a Pro advocacy could shape itself into. It presents case studies as proof of concept, with practical economics and expedient politics as the backdrop.


February 2016 ProCarbon taxes raise revenue without permanently altering the economy. DAT

Morris, Adele. “Thoughts on a Carbon Tax.” Brookings Instituion. 7 November 2011.Web. 11 January 2016. http://www.brookings.edu/blogs/up-front/posts/2011/11/07- carbon-tax-morris

The kind of carbon tax policy I support is the canonical carbon tax recommended by many economists. It would fall on the carbon content of fossil fuels broadly across the economy. It would start modestly, at something like $15 to$25 per ton of CO2, and ramp up at a modest real rate over inflation, something like 4 percent per year. It would allow tax credits for carbon in fuels that are not subsequently emitted, for example because it is sequestered underground or embodied in a product, such as plastics.

While it’s true that tax reform is hard enough without larding it up with a grab bag of other policy priorities, especially something as contentious as climate policy, there are several good economic reasons to combine these two efforts. First, a carbon tax can raise significant revenue. Depending on the tax rate, it can raise more or less revenue, but estimates suggest that a price on carbon about $33 per ton of CO2 in 2020 would raise about $180 billion per year. A tax of about the size I described earlier would start out at revenue of about $100 billion per year, and it would rise from there. However, the revenue profile isn’t as steep as you might think because people respond exactly as you want them to -- by emitting less carbon. That means that although the tax rate goes up, the revenue tapers off and eventually falls over the long run as the falling emissions dominate the higher tax rate. So a carbon tax is a medium- to long-run revenue instrument, but as emissions fall to low levels in the very long run the tax eventually raises little revenue, which is exactly what you want if the goal is to stabilize greenhouse gas concentrations in the atmosphere.

The premise here is equilibrium: the carbon tax puts economics and the environment into equilibrium and then, inherently, “goes away”. Pro teams should watch out for revenue projections that assume a constantly-increasing stream of tax income, as this is likely unrealistic.


February 2016 Pro

Tax Reform A carbon tax would be an important part of tax reform. LWZ

Pianin, Eric, Washington Editor and D.C. Bureau Chief of The Fiscal Times. "A Carbon Tax to Combat Global Warming Is Getting a Fresh Look." The Fiscal Times. The Fiscal Times, 5 July 2015. Web. 11 Jan. 2016.<http://www.thefiscaltimes.com/2015/07/05/Carbon-Tax-Combat-Global-Warming- Getting-Fresh-Look>.

The Tax Policy Center at the Urban Institute and Brookings Institution and other think tanks have begun promoting a carbon tax as a vital component of comprehensive tax reform. While it’s unlikely that Congress will take on major tax reform until after the 2016 presidential election, proponents say they want to get an early start in building support for a versatile tax that could generate tens of billions of dollars that could be used for an array of worthy causes. “The resulting revenue could finance tax reductions, spending priorities or deficit reduction – policies that could offset the tax’s distributional and economic burden, improve the environment, or otherwise improve Americans’ well-being,” economist Donald Marron and researchers Eric Toder and Lydia Austin wrote in a new report for the Tax Policy Center. The authors argue that finding a way to restrict carbon emissions of literally millions of businesses, consumers and government agencies through piecemeal federal and state regulatory measures will be difficult and needlessly costly under almost any circumstances. What’s more, direct regulation by the Environmental Protection Agency and other government entities does little to reward innovation beyond regulatory minimums, they say. By contrast, pursuing market-based approaches that place a fixed price on carbon emissions “would allow the market to do what it does best: encourage consumers and businesses to reduce emissions at the lowest cost and provide an ongoing incentive for innovators to develop new ways to reduce carbon emissions,” the Tax Policy Center report declared. Estimates vary on what the tax would raise. Marron’s study, which extrapolated 2013 projections of the Congressional Budget Office and Joint Committee on Taxation, predicts that a coal tax beginning at $25 per ton could generate about $90 billion in the first year and $1.2 trillion over the coming decade.


February 2016 ProEven without agreeing on climate change, a carbon tax would greatly improve our tax

system. LWZPianin, Eric, Washington Editor and D.C. Bureau Chief of The Fiscal Times. "A Carbon

Tax to Combat Global Warming Is Getting a Fresh Look." The Fiscal Times. The Fiscal Times, 5 July 2015. Web. 11 Jan. 2016.<http://www.thefiscaltimes.com/2015/07/05/Carbon-Tax-Combat-Global-Warming- Getting-Fresh-Look>.

Still, the tax has appeal among some conservatives. Jerry Taylor, a veteran energy expert at the libertarian Cato Institute, formed a new organization earlier this year to encourage Republican lawmakers to support a sweeping set of taxes on carbon emissions, according to The Wall Street Journal. According to Taylor, the carbon taxes would be part of a “grand bargain” between conservatives and liberal Democrats that would include corresponding cuts in other corporate taxes and the elimination of federal fuel standards and greenhouse gas emission regulations. Some might consider that idea far-fetched, but Taylor insisted it was plausible. "You can be an absolute denialist [about climate change] and still embrace the logic of swapping out regulations for taxes,” he told the Journal. Marron believes that a carbon tax in some form or another is a possibility in the future, although he cautioned that comprehensive tax reform “is a heavy lift.” “It’s obviously not a 2015 issue or a 2016 issue,” he said in an interview last week. “There is a lot of work to be done to lay down a foundation, think through the issues and get the intellectual, conceptual and practical base so that when leaders are ready to entertain this as a serious notion, we have thought through the hard issues.”


February 2016 ProCarbon taxes will help balance the budget equitably. DAT

Gale, William et al. “Carbon Taxes as Part of the Fiscal Solution.” Brookings Institution.12 March 2013. Web. 13 January 2016. http://www.brookings.edu/research/papers/2013/03/12-carbon-tax-gale

Since projected spending is slated to rise faster than GDP for the indefinite future, it is clear that spending cuts must be part of the solution, in particular for government health care programs, which have been rising as a share of GDP for several decades and are projected to continue to rise.

There are several reasons to consider tax increases (beyond those already included in the January 2013 budget deal), however, as well as spending cuts, as part of the fiscal solution. First, the sheer magnitude of the fiscal gap suggests that a spending-only solution would need to impose very substantial reductions on spending that might not be seen as equitable. At 5-7 percent of GDP, the fiscal gap is several times larger than the savings that were generated in budget deals in the past. The 1983 Social Security Reform reduced deficits by about 1 percent of GDP in the four years after passage while the 1990 and 1993 budget deals reduced deficits by about 1.4 percent of GDP and 1.2 percent of GDP, respectively, over the 5 years after passage.[2] The recently enacted tax bill only raised 0.3 percent of GDP in revenue over the next decade. In addition, Americans seem particularly reluctant to cut government spending on Social Security and Medicare, two of the key drivers of long- term spending, than on other forms of spending. For instance, a 2011 Gallup poll showed that over 60 percent of Americans were unwilling to cut social security and/or Medicare, and this was true across the political spectrum.


February 2016 Pro

Carbon Emissions Are Harmful

Carbon emissions cause a variety of health and economic damage. ABHMarron, Donald. [Director of Economic Policy Initiatives at the Urban Institute]

“Taxing Carbon, What, Why and How.” Tax Policy Center. 2015. Web. Accessed January 2, 2016. (p.2)

Businesses, consumers, and governments emit carbon dioxide, methane, nitrous oxide, and other greenhouse gases by burning fossil fuels, making cement, raising cattle, clearing land, and other activities. Those emissions build up in the atmosphere and trap heat, warm the globe, raise sea levels, shift rainfall patterns, boost storm intensity, and increase the risk of sudden climate changes. Rising carbon dioxide concentrations also alter the chemical balance of the oceans, harming coral reefs and other marine life. Greenhouse gas emissions thus create a host of potential economic and environmental threats, including increased property damage from storms, human health risks, reduced agricultural productivity, and ecosystem deterioration.1

This is a very straightforward card listing the well-known harms of carbon emissions. PRO will want to emphasize the dangers of carbon emissions in order to maximize the impact of their arguments.

Carbon emissions are the main cause of climate change. ABHVertessy, Rob. [Acting Director, Australian Bureau of Meteorology] “State of the

Climate 2012.” The Conversation. 2012. Web. Accessed January 14, 2016. http://theconversation.com/state-of-the-climate-2012-5831

Carbon dioxide (CO2) emissions account for about 60% of the effect from anthropogenic greenhouse gases on the earth’s energy balance over the past 250 years. These global CO2 emissions are mostly from fossil fuels (more than 85%), land use change, mainly associated with tropical deforestation (less than 10%), and cement production and other industrial processes (about 4%). Australia contributes about 1.3% of the global CO2 emissions. Energy generation continues to climb and is dominated by fossil fuels – suggesting emissions will grow for some time yet. CO2 levels are rising in the atmosphere and ocean. About 50% of the amount of CO2 emitted from fossil fuels, industry, and changes in land-use, stays in the atmosphere. The remainder is taken up by the ocean and land vegetation, in roughly equal parts. The extra carbon dioxide absorbed by the oceans is estimated to have caused about a 30% increase in the level of ocean acidity since pre-industrial times.

This card shows that if a carbon tax reduces carbon emissions, than global warming will be mitigated, meaning that PRO can use the impacts of mitigating global warming. This is the card that links carbon emissions to warming.

February 2016 Pro

WarmingWarming is real and even skeptics can’t deny that it is at least partially real. LWZ


The political decision to address climate change appears irrevocable. Even were that not the case, conservatives should embrace some sort of policy to respond to climate change risks, and a carbon tax, as noted above, is the best policy response. Risks from climate change are real and a policy of ignoring those risks and hoping for the best is inconsistent with risk management practices conservatives embrace in other, nonclimate contexts. There is little doubt that global warming is happening and that human activity is an important contributing factor.Even a majority of the leading climate authorities labeled as “skeptics” (e.g., MIT physicist Richard Lindzen,30 University of Alabama atmospheric scientist John Christy,31 climatologist Judith Curry from the George Institute of Technology,32 Cato Institute climatologist Pat Michaels,33 University of Colorado political scientist Roger Pielke, Jr.,34 University of Delaware climatologist David Legates,35 aerospace engineer Willie Soon from the Harvard-Smithsonian Center for Astrophysics,36 and geographer Robert Balling of Arizona State University37) agree with that proposition. At the Heartland Institute’s most recent International Conference on Climate Change—the largest annual gathering of scientific skeptics in the world—only a small minority of the scientists on the program disagreed with the proposition that human activity was contributing to global warming.38 What divides the bulk of the “skeptics” from the mainstream of scientists is that the former believe that climate change is likely to be more modest and manageable than posited by the mainstream scientific community. Room for debate exists because of uncertainty about the volume of greenhouse gases we’ll be generating decades hence, the volume of greenhouse gases from natural sources that will be emitted into the atmosphere in the course of future warming, how exactly the climate system operates, and how heat will be distributed throughout the climate system. As the Intergovernmental Panel on Climate Change notes in its most recent assessment regarding warming from 2050 onward: Projections of future climate change are not like weather forecasts. It is not possible to make deterministic, definitive predictions of how climate will evolve over the next century and beyond as it is with short-term weather forecasts. It is not even possible to make projections of the frequency of occurrence of all possible outcomes in the way that it might be possible with a calibrated probabilistic medium-range weather forecast … Nevertheless, as greenhouse gas (GHG) concentrations continue to rise, we expect to see future changes to the climate system that are greater than those already observed and attributed to human activities.39 Global warming is thus a straightforward risk management exercise. The risks, however, are in many ways unknown and unquantifiable.

February 2016 ProWe should be risk averse when it comes to warming. LWZ


Both “alarmists” and “skeptics” employ this scientific uncertainty to justify their positions. The former argue that “the precautionary principle” requires action, while the latter refuse to entertain expensive regulatory costs when so much is unclear about the extent of the environmental threat.40 The debate tends to degenerate into a normative clash of relative risk aversion and individual willingness to pay where no objectively “correct” answer can be established. The clash of relative risk aversion with regards to global warming, however, is heavily colored by ideology. When the same issue arises in other contexts—such as what to do about various threats to national security—liberals and conservatives trade places. The former become risk tolerant while the latter become risk averse.41 Clinical studies confirm what can be readily observed; attitudes about risk and willingness to pay to avoid the same are driven primarily by the partisan and ideological freight carried by the issue in question.42 When we act in markets, however, we wrestle with the management of risk without ideological considerations. The key observation here is that catastrophic climate change—that is, low- probability, high-cost climate events such as the sudden disintegration of the Greenland or West Antarctic ice sheets, shutdown or reversal of large-scale oceanic circulation systems like the Gulf Stream, major disruptions of largescale weather patterns, and runaway warming due to the release of immense amounts of greenhouse gases sequestered in arctic permafrost or offshore methane hydrates43— is a non-diversifiable risk that threatens irreversible harm. If climate change catastrophe occurs, major wealth losses would occur across the economy.44 The best evidence we have about how society regards non-diversifiable risk is the equity risk premium: the long-run return on equity relative to bonds. Investors demand much higher returns from stocks than from bonds because the value of the latter will not be devastated by a steep economic downturn (an uninsurable risk) whereas the value of the former will. Investors willingly pay a large opportunity cost (the returns they could have received from stocks over a sufficiently long period of time) to buy safety (the more dependable but lower returns associated with bonds). What this tells us is that, in financial markets, non- diversifiable risk concerns us. We pay extra to avoid it. And because catastrophic climate change is a non- diversifiable risk, we should logically be willing to pay extra to avoid climate risks as well.45 As noted by libertarian economist Edwin Dolan: There is no objective way to prove that a minimax strategy is the best in a given situation, but equally, no reason to exclude this approach from the discussion of public policy. This should be especially true for market liberals, who, in other contexts, are quite comfortable with taking people’s subjective risk preferences as they find them. In discussing financial markets, people with greater than average risk aversion are characterized as “prudent,” and markets are lauded for their ability to accommodate their preferences. Why is it, then, that when climate policy is being discussed, people with greater than average risk aversion are dismissed as “alarmists” who do not even deserve a seat at the table?46


February 2016 ProEven though climate change may be “low-risk”, we should adopt policies to counter it. LWZ


One can argue about the optimal rate of the tax. The Intergovernmental Panel on Climate Change estimates that the social cost of carbon is $12 per ton (rising 2.6 percent per year) if using a 5 percent discount rate for future costs, $39 per ton (rising 2 percent a year) if using a 3 percent discount rate for future costs, and $61 per ton (rising 1.6 percent a year) if using a 2.5 percent discount rate for future costs.49 But once we account for non- diversifiable risks associated with low-probability, high-cost scenarios, the case for a policy response to global warming is compelling.50 And that conclusion holds even if we accept the skeptics’ narrative that there are few if any signs of negative climate impacts from global warming at present. Those narratives, after all, are about known and likely climate events, not the low-probability, high-cost catastrophe scenarios discussed here. The strongest argument against addressing low-probability, high-cost catastrophe scenarios in climate policy is that there is a budget constraint on society’s ability to address such problems. Similar exercises could be undertaken to justify expensive governmental projects to address a whole host of similar low-probability, high-cost scenarios in other contexts (e.g., nuclear or biological terrorism, the proliferation of weapons of mass destruction, the emergence of mega-viruses, asteroid collisions with the Earth). Addressing them all could lead to bankruptcy, so catastrophe scenarios in multiple policy arenas compete with each other for attention. Without plausible probability estimates of the scenarios at issue and the economic fallout that might follow, we have no informed means by which to choose between competing risk management projects.51 While this observation is correct, it is of limited relevance to policymakers. First, political time horizons are notoriously short.Policymakers generally don’t face the real prospect of having to choose between a large number of intellectually defensible but costly interventions to confront a plethora of low-probability, high-cost threat scenarios. Those forwarding this argument against intervention are, in effect, saying “if we can’t—in theory or practice—address all problems, we should address none.” That proposition fails to withstand scrutiny. Second, our inability to accurately assess the degree of risk associated with catastrophe scenarios does not belie the fact that the threat exists. Even many libertarians have no principled objection to governmental intervention to enjoin risk.52 Adopting a carbon tax would reflect the fact that there is a social cost of carbon in that emissions impose risks, those risks are associated with costs, and those costs must be internalized by producers and consumers. Third, the fewer resources we spend addressing climate risks, the more resources we will have at our disposal to address the other low-probability, high-impact risks. Ignoring climate risks altogether also threatens to make it impossible to address other lowprobability, high-impact risks if any one of the catastrophic climate scenarios comes to pass. To be sure, there is no objectively correct answer to the question of how much risk one “should” accept when considering catastrophic global warming. Risk preferences are subjective, as is willingness to pay to avoid risks. But because the atmosphere is a global commons, we should defer to the (subjective) preferences of majorities.53 Those preferences are best revealed by our behavior in markets.

February 2016 ProWarming is very real. ABH

Vertessy, Rob. [Acting Director, Australian Bureau of Meteorology] “State of the Climate 2012.” The Conversation. 2012. Web. Accessed January 14, 2016. http://theconversation.com/state-of-the-climate-2012-5831

The long-term warming trend has not changed. Each decade has been warmer than the previous decade since the 1950s. Global-average surface temperatures were the warmest on record in 2010 (slightly higher than 2005 and 1998). 2011 was the world’s 11th warmest year and the warmest year on record during a La Niña event. The world’s 13 warmest years on record have all occurred in the past 15 years.

On land around Australia the observed warming trends are consistent with the global-scale warming - despite 2010 and 2011 being the coolest years recorded in Australia since 2001. In the oceans around Australia, sea-surface temperatures have increased faster than the global average, and sea-level rise since 1993 is greater than, or equal to, the global average. Australian average temperatures over land

Australian annual-average daily mean temperatures showed little change from 1910 to 1950 but have progressively warmed since, increasing by 0.9 °C from 1910 to 2011. The average temperature during the past ten years has been more than 0.5 °C warmer than the World Meteorological Organization’s standard 1961-1990 long-term average. This increase continues the trend since the 1950s of each decade being warmer than the previous.

The data all shows that the global average surface temperature is increasing.


February 2016 ProThe impacts of climate change are seen all over the U.S. ABH

Gillis, Justin. [New York Times Reporter] “U.S. Climate Has Already Changed, Study Finds, Citing Heat and Floods.” New York Times. Web. Accessed January 14, 2016.

In the Northeast, the report found a big increase in torrential rains and risks from a rising sea that could lead to a repeat of the kind of flooding seen in Hurricane Sandy. In the Southwest, the water shortages seen to date are likely just a foretaste of the changes to come, the report found. In that region, the report warned, “severe and sustained drought will stress water sources, already overutilized in many areas, forcing increasing competition among farmers, energy producers, urban dwellers and plant and animal life for the region’s most precious resource.”

The report did find some benefits from climate change in the short run, particularly for the Midwest, such as a longer growing season for crops and a longer shipping season on the Great Lakes. But it warned that these were likely to be countered in the long run by escalating damages, particularly to agriculture.

“Yes, climate change is already here,” said Richard B. Alley, a climate scientist at Pennsylvania State University who was not involved in writing the report. “But the costs so far are still on the low side compared to what will be coming under business as usual by late in this century.”

The report was supervised and approved by a large committee representing a cross section of American society, including representatives of two oil companies. It is the third national report in 14 years, and by far the most urgent in tone, leaving little doubt that the scientists consider climate change an incipient crisis. It is also the most slickly produced, with an elaborate package of interactive graphics on the Internet.

Climate change is causing damage all over the US, but as the card points out, things will only get worse, so now is the time to act.


February 2016 ProAlaska has been devastated by climate change. ABH

Gillis, Justin. [New York Times Reporter] “U.S. Climate Has Already Changed, Study Finds, Citing Heat and Floods.” New York Times. Web. Accessed January 14, 2016.

The report is the latest in a series of dire warnings about how the effects of global warming that had been long foreseen by climate scientists are already affecting the planet. Its region-by-region documentation of changes occurring in the United States, and of future risks, makes clear that few places will be unscathed — and some, like northerly areas, are feeling the effects at a swifter pace than had been expected. Alaska in particular is hard hit. Glaciers and frozen ground in that state are melting, storms are eating away at fragile coastlines no longer protected by winter sea ice, and entire communities are having to flee inland — a precursor of the large-scale changes the report foresees for the rest of the United States. The study, known as the National Climate Assessment, was prepared by a large scientific panel overseen by the government and received final approval at a meeting Tuesday. The White House, which released the report, wants to maximize its impact to drum up a sense of urgency among Americans about climate change — and thus to build political support for a contentious new climate change regulation that President Obama plans to issue in June.

This is a very good tangible example for PRO to use to show the urgency of combatting climate change. Sometimes judges can get lost in the big picture warming debate, so having very specific detailed examples is helpful.


February 2016 Pro

A Carbon Tax Would Reduce Emissions

Several estimations indicate that taxing carbon will likely reduce emissions. ABHMarron, Donald. [Director of Economic Policy Initiatives at the Urban Institute]

“Taxing Carbon, What, Why and How.” Tax Policy Center. 2015. Web. Accessed January 2, 2016. (p.9)

Despite these modeling differences, there is broad consensus that a carbon tax would reduce emissions.Several years ago, the Congressional Budget Office (CBO) reviewed carbon tax studies and concluded that a$25 per ton of CO2-equivalent charge on greenhouse gas emissions from electricity, manufacturing, and transportation, rising 2 percent faster than inflation, would cut covered emissions by 10 percent in its first decade.21 Emissions reductions from a $25 tax, rising at 2 percent real, would thus be somewhat larger than those from the Clean Power Plan, but they would be far short of President Obama’s reduction target for 2025.22 Achieving the 2025 goal with a tax alone would require a significantly higher-starting tax rate, faster escalation, or a combination of the two. Other researchers have confirmed that a carbon tax that escalates over time can significantly reduce emissions. For example, Jorgensen and colleagues (2015) estimate that an initial $20 carbon tax, growing at 5 percent faster than inflation each year, would reduce emissions over 20 percent in its 15th year and over 30 percent in its 35th year.23 McKibben and colleagues estimate that a carbon tax with an initial price of $15, growing at 4 percent real, could reduce emissions by 20 percent in its 25th year.24 Shapiro and colleagues estimate that an initial $14 carbon tax, rising to $50 in 2030, would reduce emissions by 30 percent after 20 years.25 As these and similar studies make clear, putting a price on carbon can materially lower future emissions; how much depends on the level of the tax and how fast it rises over time.

While various studies reach different conclusions about how much a carbon tax would decrease emissions, they all show that a carbon tax will reduce emissions to some extent.


February 2016 ProThe increasing cost of carbon will decrease demand. ABH

Aldy, Joseph. [Associate Professor of Public Policy at the John F. Kennedy School of Government at Harvard University] “The Case for a US Carbon Tax.” Oxford Energy Forum. 2013. Web. Accessed January 3, 2016. (p.15)

Energy suppliers will increase the price of the fuels they sell in response to the carbon tax. This will effectively pass the tax down through the energy system, creating incentives for fuel-switching and investments in more energy-efficient technologies that reduce CO2 emissions. The real-world experience of firms and individuals responding to changing energy prices demonstrates the potential power of a carbon tax to drive changes in the investment and use of emission-intensive technologies. The higher gasoline prices in 2008 resulted in larger market share of more fuel-efficient vehicles, while reducing vehicle miles traveled by drivers of existing cars and trucks. In recent years, electric utilities responded to the dramatic decline in natural gas prices (and the associated increase in the relative coal-gas price ratio) by switching dispatch from coal-fired power plants to gas-fired power plants that resulted in lower carbon dioxide emissions and the lowest share of US power generation by coal in some four decades. Historically, higher energy prices have induced more innovation – measured by frequency and importance of patents – and increased the commercial availability of more energy-efficient products, especially among energy-intensive goods such as air conditioners and water heaters. Imposing a carbon tax would provide certainty about the marginal cost of compliance, which reduces uncertainty about returns to investment decisions and eliminates the regulatory uncertainty that inhibits energy sector investment. Of course, certainty over costs results in uncertainty over emission reductions.

Logically, if the cost of emitting carbon increases, people and companies will decrease their carbon consumption and seek out cheaper alternatives. Historically, this is confirmed as when gas prices increased, fuel-efficient cars become more popular, and people drove less.


February 2016 ProPrice increases result in the decreased usage of gasoline and crude oil. ABH

Metcalf, Gilbert. [Professor at Tufts University] “A Proposal for a U.S. Carbon Tax Swap.” 2007. The Brookings Institution. Web. Accessed January 10, 2016.

More direct evidence on the responsiveness of energy consumption to prices is given by estimates of the price elasticity of demand where the relationship is estimated with statistical approaches that control for other factors. This statistic measures the percentage reduction in demand for energy following a 1 percent increase in price. For gasoline consumption in motor vehicles, Small and Van Dender (2007) estimate a short-run elasticity of consumption with respect to price of −0.074 and a long-run elasticity of −0.338 at prices and income in the late 1990s. This suggests that a 10 percent increase in the price of gasoline would decrease gasoline demand by0.74 percent in the short run and over three percent in the long run. Evidence of price responsiveness for crude oil demand in the United States suggests a comparable elasticity. Cooper (2003) estimates a short-run elasticity of −0.061 and a long-run elasticity of −0.453. Metcalf (2007b) estimates price elasticities for energy demand in general and finds a short-run elasticity of −0.11 and a long-run elasticity of −0.30. Those long-run estimates are somewhat lower than other estimates in the literature. Bjorner and Jensen (2002), for example, cite estimates from a survey by Atkinson and Manning (1995) of median energy demand elasticity estimates of −0.5. Both the graphical data and the evidence from formal econometric analyses of demand elasticities suggest that higher prices for carbon will bring about reductions in the demand for fossil fuels. A carbon tax will raise the price of carbon, thereby inducing a reduction in carbon emissions.

Based on the price elasticity for gasoline and crude oil, a price increase (through a carbon tax) would likely result in demand decreasing by a significant amount.


February 2016 ProNon-CO2 Emissions decrease as well. ABH

Metcalf, Gilbert. [Professor at Tufts University] “A Proposal for a U.S. Carbon Tax Swap.” 2007. The Brookings Institution. Web. Accessed January 10, 2016.

I propose a carbon tax set at a rate of $15 per ton of CO2. 10 Emissions of CO2 in the United States were slightly more than 6,000 million metric tons in 2005 (Energy Information Administration (2006b). At these emission levels, a charge of $15 per ton of CO2e would raise $90.1 billion, assuming no behavioral response.11 In response to the tax, we would expect substantial emission reductions in the long run and smaller emission reductions in the short run. Table 1 shows the short-run impact of a carbon tax imposed on all GHGs in the United States in 2015 based on modeling using the Massachusetts Institute of Technology’s (MIT) Emissions Prediction and Policy Analysis (EPPA) model.12 The EPPA model shows a 14 percent reduction in GHG emissions. CO2 emissions fall by 8.4 percent, and other GHGs (methane, nitrous oxides, and fluorinated gases) fall by nearly 50 percent. Carbon dioxide (CO2) emissions account for just over one half of the CO2-equivalent emissions reductions, while other GHGs account for the remaining half. Although CO2 emissions make up the largest volume of anthropogenic emissions, they are less potent than other GHGs and relatively more costly to reduce. This speaks to the importance of including as many of the non-CO2 emissions as possible in any GHG pricing plan. Early emission reductions are less costly among non-CO2 gases, and their inclusion provides flexibility that reduces the overall costs of any given reduction in emissions.13

While a carbon tax would certainly reduce CO2 emissions, it would also be successful in decreasing other GHG emissions such as methane. PRO would want to emphasize the importance of reducing these emissions.


February 2016 ProCarbon taxes discourage misguided policymaking, e.g. ethanol mandates. DAT

“Do Economists All Favour a Carbon Tax?” The Economist. 19 September 2011. Web. 11 January 2016. http://www.economist.com/blogs/freeexchange/2011/09/climate-policy

Mr Cowen doesn't mention what I see as one of the most important roles of a carbon tax: as a check on other ill- advised programmes. A carbon tax would have quickly made the net dirtiness of corn-based ethanol obvious (by helping to offset subsidies and making corn-based ethanol more expensive). It would be more difficult to roll out and sustain such misguided programmes with a carbon tax, and the ones that went ahead anyway would do less damage. A carbon tax is also the easiest way to capture whatever low-hanging emission-reduction fruit is out there. Right now, consumers are generally indifferent between similarly-priced goods with wildly different carbon profiles. A carbon tax encourages consumers to realise the easy carbon gains available from switching to good low-carbon substitutes wherever they exist.

The biggest problem with a carbon tax is that America's government seems unable to deliver one. Attitudes may change, however, and near-uniform economist support for the policy (probably) doesn't hurt its odds of eventual passage.

The most basic, but powerful, argument out there for the Pro is sitting, verbatim, in the last bolded sentence. Even if carbon taxes don’t save the world, even the marginal gains are enough justification for putting them into action.

A survey of academic studies of environmental impacts. DATMorris, Adele [Brookings Institution] and Aparna Mathur [American Enterprise

Institute]. “A Carbon Tax in Broader U.S. Fiscal Reform: Design and Distributional Issues.” Center for Climate and Energy Solutions. May 2014. Web. 11 January 2015. http://www.brookings.edu/~/media/research/files/papers/2014/05/22-carbon- tax-broader-us-fiscal-regulation- morris/05222014_carbon_tax_broader_us_fiscal_reform_morrisa_mathura.pdf

Revenue is an important consideration, but the environmental performance of a carbon tax is another critical factor. Figure 2 graphs the percent reduction in emissions relative to the baseline (for the taxed set of gases) estimated in the five studies.16 All of the studies estimate significant abatement in taxed emissions by 2030. For instance, Rausch et al. (2010) predict that emissions will fall by about 15 percent in 15 years. With the lowest tax rate, McKibbin et al. (2012a) predictably finds the smallest reduction in emissions, but even in that study, emissions decline by 11 percent relative to baseline by 2030. Paltsev et al. (2007) find that non-CO2 gas emissions decline at relatively low tax rates. Thus, including those gases under the tax makes sense to the extent that it is administratively feasible.


February 2016 Pro

Carbon pricing would help innovation. LWZStepp, Matthew, and Megan Nicholson. "Carbon Pricing Won't Solve Climate Change.

Innovation Will." The Christian Science Monitor. The Christian Science Monitor, 13 June 2014. Web. 02 Aug. 2015.<http://www.csmonitor.com/Environment/Energy-Voices/2014/0613/Carbon- pricing-won-t-solve-climate-change.-Innovation-will>.

This is not to say that carbon pricing and innovation policy are mutually exclusive – a carbon price can be used at the national level to support a clean energy innovation strategy. For example, a modest $15/ton carbon tax in the United States would provide enough revenue to offset some tax reductions as well as triple investment in clean energy RD&D. This so-called “innovation carbon price” discourages fossil fuel consumption while providing direct support for affordable low-carbon alternatives.


February 2016 ProEven accounting for uncertainty, the outcomes are positive. DAT

Ramseur, Jonathan [Environmental Policy Analyst] and Larry Parker. “Carbon Tax and Greenhouse Gas Control: Options and Considerations for Congress.” Congressional Research Service. 10 March 2009. Web. 12 January 2016. https://www.fas.org/sgp/crs/misc/R40242.pdf

The primary disadvantage of using a carbon tax to control GHG emissions is that the level of emissions would be uncertain.65 For some this concern may present a non-starter, precluding a carbon tax as an option to control GHG emissions. As discussed above, some argue that the potential for irreversible climate change impacts necessitates the emissions certainty that is only available with a quantity-based instrument (e.g., cap-and-trade).

However, uncertain emissions do not necessarily equate with no emission control. Multiple models have estimated the carbon tax rate that would be required to achieve certain emission targets, targets that are comparable with the emission reduction goals of recent cap-and-trade proposals.66 Regardless, these models can only provide estimates based on the best information available about the marginal costs of abatement (Figure 1). Although uncertain emissions are inherent with a carbon tax approach to emission control, there are policy options available to Congress to enhance the emission control certainty of a carbon tax. In theory, policymakers could devise a carbon tax program that yields only short-term emission fluctuations, as it progresses towards its long-term emission reduction objective. To achieve this goal, Congress would need to enact a mandatory GHG emission reporting regime to act in parallel with a carbon tax. Data from such a regime could be used to track the impact and performance of a carbon tax. If policymakers determine emission reduction is not occurring at a desired pace, the tax rate could be amended.

As discussed above, carbon tax proponents would argue that short-term emission variations would not undermine efforts to control climate change. Indeed, they would assert that short-term emission fluctuations are greatly preferred to the price volatility that a cap-and-trade program would potentially impose. This argument is supported by the notion that CO2 is a stock pollutant, which generates damages through its overall concentration in the atmosphere, not its annual flow.

Some context for Pro teams: You don’t have to prove that carbon taxes will somehow put a stop to climate change. All that has to be proven is superiority to alternatives. When the backup option is cap- and-trade, this becomes a better option, given that short-term environmental volatility (as opposed to economic volatility) does not have massive negative impacts that propagate through time.


February 2016 ProA carbon tax would make U.S. global leader in carbon reductions. ABH

Morris, Adele. [Fellow and Policy Director, Economic Studies, The Brookings Institution “Proposal 11: The Many Benefits of a Carbon Tax.” The Hamilton Project. 2013. Web. Accessed January 14, 2016.

In addition to the positive budgetary impacts of a carbon tax, there are significant environmental benefits as well. Results predict the policy would reduce taxed emissions relative to baseline by about 12 percent after twenty years and by a third by mid-century, producing a cumulative reduction of 9.2 billion metric tons of CO2 in its first two decades. As shown in table 11-2, if the present value of those emissions reductions is, say, at least $16 per ton, the first twenty years of the tax would produce at least $148 billion in climate benefits. Further benefits could arise from increased GHG abatement by other countries in response to U.S. climate action and diplomacy.The United States should use its new carbon price policy to become an international leader for pricing GHG emissions globally. It should encourage carbon pricing by other major emitters. In particular, the United States should launch a vigorous carbon pricing dialogue within the Major Economies Forum, the United Nations Framework Convention on Climate Change, or the G-20, or more than one of these.13 The dialogue could focus on administrative and technical aspects of carbon pricing and help build GHG tax administration capacity in developing countries. These diplomatic efforts would help address climate risks, protect energy- intensive American industry, limit the need for border carbon adjustments, and signal to the international community that the world’s largest economic power is taking positive and transparent steps to curb its emissions.

In order to maximize the impact of carbon emission reductions, PRO should show that the U.S. implementing a carbon tax would encourage other nations to curb their carbon emissions as well.


February 2016 ProA carbon tax would encourage clean energy innovation. ABH

Hsu, Shi-Ling. [Professor at Florida State University College of Law] “The Case for a Carbon Tax: Getting Past Our Hang-ups to Effective Climate Policy.” Island Press. 2011. Web. Accessed January 14, 2016. http://myweb.fsu.edu/shsu/HSU_carbon_tax_precis4.pdf

While very limited government subsidization of some research and development of renewable and alternative technologies may be warranted. But the most relevant choice is between cap-and-trade and a carbon tax. Cap-and- trade is an instrument whereby an overall limit, or "cap," is set on total national emissions, and emitters can trade amongst themselves in mostly unregulated market transactions to allocate those emissions. Although cap-and-trade and carbon taxes both encourage innovation to reduce emissions, the two are not equal in their ability to induce innovation. There are at least three ways in which a carbon tax will better encourage innovation than a cap- and-trade program. First, a carbon tax introduces a steadier price signal than cap-and-trade. Cap-and-trade sets the quantity of emissions, but lets the price fluctuate according to market demand. Investors interested in lower-carbon or non-carbon alternatives would rather not have price volatility. Second, if a cap-and-trade program is successful in encouraging innovation in greenhouse gas-reducing technologies, the ironic effect is that this innovation will reduce the price of emissions permits and thereby reduce the price incentive to innovate. A carbon tax, by contrast, represents a continuing price signal to find lower-carbon alternatives. Finally, if a cap-and trade program gives away emissions permits instead of auctioning them – which history suggests politicians would much prefer – then emitters with these free permits will have less incentive to innovate because innovation would reduce the value of those emission permits. The free allocation of allowances creates an asset in the hands of emitters, something that does not happen under a tax regime. The fact that innovation could reduce the value of that asset is a disincentive for those emitters to find cost-saving innovations.

The main reason why a carbon tax would be great for innovation is that investors would feel more confident investing in green energy as a substitute to costlier carbon sources, but unlike cap and trade, a carbon tax allows them to avoid the fear of a volatile market.


February 2016 Pro

Carbon Taxes as Vehicles for International Climate CooperationCarbon taxes are the best gateway to international environmental cooperation. DAT

Gollier, Christian and Jean Tirole [Toulouse School of Economics]. “Making Climate Agreements Work.” The Economist. 1 June 2015. Web. 11 January 2016. http://www.economist.com/blogs/freeexchange/2015/06/united-nations-climate- conference

At the 2009 Copenhagen conference the idea of a global carbon price was dropped, and the UN’s climate-change convention became a chamber for the registration of non-committal pledges. This “pledge-and-review” mechanism is likely to be confirmed in Paris. Under this convention countries register their voluntary climate actions. There is no coordination in their method or measurement.

The pledge-and-review strategy is completely inadequate. First, it lacks the efficiency of a coherent carbon price. Second, the absence of any binding commitment limits its credibility and makes it very tempting for countries to renege on their pledges. In Paris, countries will have every incentive to make their pledges hard to compare to others, and impossible to verify or enforce. Third, the pledge-and-review process exacerbates the free- rider problem, because countries that resist reform are placed in a stronger position at the bargaining table in the future.

The world could do better. A carbon tax, collected by individual countries, looks a far more effective tool. Countries could be required to impose the common price as long as all others do too, and domestic revenues from the tax could be recycled internally. Transfers to developing or reluctant countries, such as through the Green Climate Fund, could be set up to address concerns about fairness.

While it is assumed that international action is the best way to solve international problem, this card helps to explain why this intuitive explanation might be wrong. Fundamentally, carbon taxes are a powerful tool which is both enforceable on a domestic level and implementable internationally.


February 2016 ProDomestic carbon taxes can coexist with cap-and-trade abroad: an advocacy. DAT


A U.S. carbon tax program could conceivably have a linkage of sorts with international cap-andtrade programs. For example, a carbon tax system could allow for tax credits for emission reductions made outside of the United States.80 However, this trade would only flow in one direction: Covered sources in the EU could not purchase reductions from covered sources in the United States. Thus, this type of linkage would not equate with a union of cap-and-trade programs. Sources in the United States that were subject to the carbon tax would find this opportunity worthwhile only if the carbon tax rate were higher than the emission allowance price (EU emission allowances or EUAs) or, if eligible, offset project prices (traded as certified emission reductions or CERs) in the EU ETS. However, if policymakers were to provide tax credits for international emission abatement projects, concerns similar to those involving offsets in a cap-and-trade system would be raised. If the illegitimate projects qualify as tax credits, the primary objective of the program—GHG emission control—may be compromised.

This card in no way is a glowing endorsement of carbon taxes in an international context. The last sentence, a particularly Con-friendly one, was included for greater context. A big takeaway here is this: regardless of the strategy adopted by the United States, there will be some degree of clash with preexisting systems. This is to be expected regardless of carbon mitigation strategy. Pro teams’ job is to have a viable advocacy ready to at least put carbon taxes on level with cap-and-trade on this front.

Domestic-focused policies are actually better drivers of international action. DATRamseur, Jonathan [Environmental Policy Analyst] and Larry Parker. “Carbon Tax

and Greenhouse Gas Control: Options and Considerations for Congress.” Congressional Research Service. 10 March 2009. Web. 12 January 2016. https://www.fas.org/sgp/crs/misc/R40242.pdf

Some have raised the argument that encouraging maximum participation among nations should be a higher priority than instrument choice and the potential consequences of choosing a cap over a tax (e.g., loss of economic efficiency).81 Would a carbon tax or a cap-and-trade program be the most effective approach to bring the most nations, or more precisely, emissions, under a mitigation umbrella? Neither strategy would necessarily require equal commitments between nations. For example, the United States and China could each establish unilateral carbon tax programs—as opposed to an international, harmonized system—with different tax rates. Indeed, an international carbon tax system would encounter substantial implementation challenges, particularly regarding issues of national sovereignty.

It would be (and has proven) difficult to achieve wide and diverse participation—namely, agreement from both the United States and developing nations—in a GHG control regime. Some may favor a cap-and-trade approach,

February 2016 Probecause of the buildup of existing programs and the political momentum behind the cap-and-trade approach. However, this reasoning may be questioned on several counts. First, although a substantial percentage of the world’s CO2 emissions are covered under the Kyoto or EU ETS cap, an even larger percentage are not covered.82 This latter group includes the United States, China, and India, which accounted for approximately 54% of the CO2 emissions from the top-25 CO2 emitting nations in 2005.83 Second, the mere existence of a program (and its political momentum) does not indicate it is the optimal solution. Indeed, the existing international cap-and-trade systems, which are still in their early stages, have encountered substantial problems.84

This card presents an interesting rhetorical approach to the Pro’s internationally-focused arguments: the carbon tax doesn’t mesh well with existing international policy, and that’s a good thing. Given that the Pro is necessarily advocating an alteration to the status quo, adherence to other components of the status quo are not required for a solid argument.

A carbon tax has far better international prospects than cap-and-trade. DATAldy, Joseph et al. “What is the Role of Carbon Taxes in Climate Change

Mitigation?” The World Bank. April 2010. Web. 12 January 2016. http://www1.worldbank.org/prem/PREMNotes/Note2_role_carbon_taxes.pdf

Reaching international agreement over a quantity-based approach to emissions control is potentially difficult and contentious. In a Kyoto-like system, countries have to agree on a set of national emissions targets. Initially, these targets can be set relative to actual emissions in a recent ‘reference’ year; this reference was chosen to be 1990 in the Kyoto Protocol. However, a problem is that, moving forward, baseline emissions—i.e., emissions that would have occurred in the absence of a CO2 control policy—may grow at very different rates in different countries leading to difficulties in updating country emissions quotas over time.

In contrast, under a tax-based regime there is only variable to negotiate over—the tax rate on CO2 that every country should impose, along with a rule for adjusting it over time. This avoids the haggling over country-level targets that is inherent in a Kyoto-style approach.

This is a compelling advocacy for the Pro. The Pro can leverage the popularity of cap-and-trade internationally in favor of carbon taxes: given the evidence indicating that a cap-and-trade standard worldwide is an arduous pipe dream, carbon taxing can position the United States as a global leader in the climate fight, rather than a big player being dragged along by the rest of the West.


February 2016 ProInternational cooperation on carbon taxes is easily enforceable: an advocacy. DAT

Aldy, Joseph et al. “What is the Role of Carbon Taxes in Climate Change Mitigation?” The World Bank. April 2010. Web. 12 January 2016. http://www1.worldbank.org/prem/PREMNotes/Note2_role_carbon_taxes.pdf

One concern about a system of international emissions taxes is that it could be undermined by ‘fiscal cushioning,’ that is, the reduction of other taxes borne by sources of greenhouse gas emissions to offset the burden of a CO2 tax. For example, when Sweden introduced its CO2 tax in 1991, it cut energy taxes by 50 percent. In some cases, offsetting reductions in other energy taxes are transparent (e.g., a reduction in gasoline tax), but not in others (e.g., complex tax loopholes for expensing of capital or technology investments). One possible response to this problem is to develop a broader measure of a country’s CO2, taking account of pre-existing energy taxes or subsidies. For example, the $0.40 per gallon tax on gasoline in the U.S. would amount to a pre-existing tax of $9 per ton of CO2, given that a gallon of gasoline produces 0.009 tons of CO2 and gasoline accounts for one-fifth of nationwide CO2 emissions. Similarly, estimated revenues forgone to the government from the favorable tax treatment of energy industries could be expressed per ton of CO2. In principle, all countries might be required to increase this broader CO2 tax at the same rate over time. Therefore, any reductions in other energy taxes would need to be offset by a higher formal tax on CO2.

This card helps the Pro to address issues related to the international scalability of carbon taxes. Given the endgame of climate legislation (global reductions in CO2 emissions to cap warming), this is a point the Pro should be prepared to handle with an evidence-based advocacy.

International frameworks around carbon taxes are more robust. DATAldy, Joseph et al. “What is the Role of Carbon Taxes in Climate Change

Mitigation?” The World Bank. April 2010. Web. 12 January 2016. http://www1.worldbank.org/prem/PREMNotes/Note2_role_carbon_taxes.pdf

A carbon tax could provide for some appropriate incentives for participation and compliance. First, the cost of this policy instrument is much more transparent than a quantitative emission target. Second, the withdrawal of a country from a global harmonized carbon tax does not risk the contagion that could occur via international permit markets under a system of quantitative targets. Third, a domestic carbon tax policy might make it simpler to employ a border tax adjustment consistent with the World Trade Organization on imports from countries failing to impose carbon taxes than under a cap-and-trade based policy. Fourth, reliance on the revenue streams will promote the establishment of domestic constituencies in support of maintaining carbon taxes.

The third point here is bolded because it is most pertinent to United States domestic policy: the implementation of carbon taxes does not constitute an implicit trade barrier to the same extent as cap- and-trade or some other more intrusive form of emissions control.


February 2016 Pro

Carbon Taxes Have Been Effective In Other Countries

Carbon taxes have reduced emissions in other nations. ABHMarron, Donald. [Director of Economic Policy Initiatives at the Urban Institute]

“Taxing Carbon, What, Why and How.” Tax Policy Center. 2015. Web. Accessed January 2, 2016. (p.20-21)

There are several lessons we can draw from other countries’ experience with pricing carbon: 1. Carbon pricing reduces emissions. In the three years that Australia had a carbon pricing mechanism (set at $19/metric ton of carbon dioxide equivalent and rising annually), emissions in affected sectors fell from 1.5 to 9 percent. British Columbia has had a carbon tax set at $26/metric ton of carbon dioxide equivalent since 2008, and emissions fell around 10 percent between 2008 and 2011.49 A survey of carbon taxes in Finland, Denmark, the Netherlands, and Sweden found that all reduced emissions more than if there were no policy changes; the reductions ranged from about 1.5 percent to nearly 6 percent.50

PRO can use examples from other countries to strengthen the argument that carbon taxes actually do decrease emissions.


February 2016 ProCase study: British Columbia. DAT

“The Evidence Mounts.” The Economist. 31 July 2014. Web. 11 January 2016. http://www.economist.com/blogs/americasview/2014/07/british-columbias-carbon- tax

UNTIL recently, British Columbians consumed as much fuel per head as their fellow Canadians. Nothing remarkable distinguished their use of fossil fuel until, in 2008, they began paying a carbon tax. Six years later the province remains the only jurisdiction in North America to levy a charge on fossil-fuel consumption.

BC’s levy started at C$10 ($9) a tonne in 2008 and rose by C$5 each year until it reached C$30 per tonne in 2012. That works out to 7 cents of the C$1.35 per litre Vancouver residents pay at the pump to fill up their vehicles.Because the tax must, by law in BC, be revenue-neutral, the province has cut income and corporate taxes to offset the revenue it gets from taxing carbon. BC now has the lowest personal income tax rate in Canada and one of the lowest corporate rates in North America, too.

BC’s fuel consumption is also down. Over the past six years, the per-person consumption of fuels has dropped by 16% (although declines levelled off after the last tax increase in 2012). During that same period, per-person consumption in the rest of Canada rose by 3%. “Each year the evidence becomes stronger and stronger that the carbon tax is driving environmental gains,” says Stewart Elgie, an economics professor at University of Ottawa and head of Sustainable Prosperity, a pro-green think-tank. At the same time, BC’s economy has kept pace with the rest of the country.

Aside from the obvious, this card makes an interesting point for the Pro: carbon taxes can be job generators. Even assuming the (suspect) logic that taxation kills jobs, revenue-neutral legislation like BC’s implementation show methods by which carbon taxes can replace corporate and income taxes, thus driving growth.


February 2016 Pro

Carbon Taxes Increase Energy Firms’ Competitiveness

Carbon taxes would drive traditional energy companies into competition with coal. DAT“Why Exxon Mobil Would Support a Carbon Tax.” The Economist. 18 November 2015.

Web. 11 January 2016. http://www.economist.com/blogs/economist- explains/2015/11/economist-explains-12

But the more splits there are, the less lobbying clout the industry has. And there are reasons why supporting a carbon tax could work in the industry’s favour. First, it enables them to launch a stealth attack on coal—usually a dirtier but cheaper fossil fuel. Bob Dudley, the boss of BP, a British major, says switching just 1% of power generation away from coal-fired plants to those fired by natural gas would cut global CO2 emissions by as much as increasing renewable energy capacity by 11%. Already the industry is emphasising natural gas over oil (BP, for example, is increasing the ratio of gas to oil from 50:50 to 60:40). Coal-fired power plants are being shut across much of the developed world. What is more, a robust carbon price can make it easier to decide where to invest for the future. Like Exxon Mobil, many of the oil companies make investment decisions based on proxy carbon prices. But the pricing ranges from less than $5 per tonne of C02 to more than $150; the uncertainty is vast.

Make sure to notice the subtext here: not only is the tax a driver of investment in cleaner fuels, but the action itself makes an impact. This is the point of the last sentence: by imposing a carbon tax of any sort, inherently setting a “fixed” price in the process, the United States removes uncertainty, enabling reasonable investment in clean technology.


February 2016 ProOil companies are typically not hard-hit by carbon taxes. DAT

Haavardsrud, Paul. “Alberta’s Carbon Tax Should Comfort OPEC Amid Paris Climate Talks.” CBC. 1 December 2015. Web. 13 January 2016. http://www.cbc.ca/news/business/opec-climate-change-paris-conference-oil- 1.3343097

Safe to say that Big Oil luminaries such as Suncor's Steve Williams, Cenovus's Brian Ferguson, and Canadian Natural Resources' Murray Edwards would have been less willing to share the stage with Notley as she unveiled a new provincial carbon tax if Alberta's climate plan were as tough on oil as it is on coal.

Oil didn't get away unscathed, but compared with coal — which Alberta is trying to phase out of the energy mix by 2030 — the economic fallout of the carbon tax is relatively minor.

For most oilsands producers, for instance, the new carbon plan will add less than a dollar per barrel to costs, according to figures from Calgary investment bank First Energy Capital.

A look at the carbon reduction plans, known as Intended Nationally Determined Contributions, that countries filed to the United Nations ahead of the Paris talks, shows that Alberta isn't the only jurisdiction that's focusing efforts to cut emissions in areas other than oil.


Con Evidence


February 2016 Con

A Carbon Tax Hurts The Economy

The tax decreases purchasing power, especially for low-income households. ABHDinan, Terry. [Senior Advisor at the Congressional Budget Office] “Effects of a

Carbon Tax on the Economy and Environment.” Congressional Budget Office. 2013. Web. Accessed January 2, 2016. (p.2)

By raising the cost of using fossil fuels, a carbon tax would tend to increase the cost of producing goods and services—especially things, such as electricity or transportation, that involve relatively large amounts of CO2 emissions. Those cost increases would provide an incentive for companies to manufacture their products in ways that resulted in fewer CO2 emissions. Higher production costs would also lead to higher prices for emission- intensive goods and services, which would encourage households to use less of them and more of other goods and services. Without accounting for how the revenues from a carbon tax would be used, such a tax would have a negative effect on the economy. The higher prices it caused would diminish the purchasing power of people’s earnings, effectively reducing their real (inflation-adjusted) wages. Lower real wages would have the net effect of reducing the amount that people worked, thus decreasing the overall supply of labor. Investment would also decline, further reducing the economy’s total output. The costs of a carbon tax would not be evenly distributed among U.S. households. For example, the additional costs from higher prices would consume a greater share of income for low- income households than for higher-income households, because low income households generally spend a larger percentage of their income on emission intensive goods. Similarly, workers and investors in emission-intensive industries, who would see the largest decrease in demand for their products, would be likely to bear relatively large burdens as the economy adjusted to the tax. Finally, areas of the country where electricity is produced from coal— the most emission-intensive fossil fuel per unit of energy generated—would tend to experience larger increases in electricity prices than other areas would.

If corporations have to pay carbon taxes during the production of certain goods, they will ultimately pass on those expenses to consumers who will have to pay more to buy many products.

Carbon tax would hurt the economy. LWZThomas Pyle [president of the Institute for Energy Research]. Carbon Tax's Impact

on Global Warming Would Be Negligible. US News. Dec 9, 2012. http://www.usnews.com/debate-club/is-a-carbon-tax-a-good-idea/carbon-taxs- impact-on-global-warming-would-be-negligible

Some argue that a carbon tax wouldn't hurt the economy too much because only a low carbon tax rate would be imposed. But that's assuming the tax rate would remain low, and of course the best historical case study is the imposition of the income tax. When the income tax was created in 1913, the top rate was a seven percent. But by 1918, a mere five years later, the top income tax rate had skyrocketed to 77


February 2016 Conpercent because increases in federal spending required additional revenues. With today's fiscal realities, a carbon tax would surely increase to help cover the deepening federal budget deficit.

A carbon tax would kill the economy. LWZMark J Perry [professor of economics and finance in the School of Management at

University of Michigan–Flint and a scholar at the American Enterprise Institute in Washington, D.C.] Carbon Tax Would Kill Major Industries, Hurt U.S. Consumers. 10/16/2012. Investor's Business Daily: http://news.investors.com/ibd-editorials-on- the-right/101612-629540-carbon-tax-would-kill-off-growth-in-american- economy.htm#ixzz3hip9Hkpy

The hardest-hit sectors of the U.S. economy from a carbon tax would be energy-intensive industries, particularly chemicals, car manufacturing, iron and steel, aluminum, cement, and mining and oil refining. These large industries would be at a serious disadvantage in the world marketplace, and many companies would move production to countries without such a tax. The cost in dollars, as well as in lost jobs, from a carbon tax would be staggering. And the cost would ultimately fall on American consumers — without necessarily generating any environmental benefits if China, India and other countries with fast-growing economies continue to pollute.

It wouldn’t be rebated to consumers. LWZMark J Perry [professor of economics and finance in the School of Management at


In theory, the cost of a U.S. carbon tax could be rebated to consumers. But it's likelier that most of the money would be used to subsidize renewable energy sources such as solar and wind power. For years now, solar and wind companies have received taxpayer-subsidized grants and federally guaranteed loans for plant construction along with requirements forcing utilities to buy back the electricity they generate at costs far above conventionally generated electricity.


February 2016 ConA carbon tax would hurt manufacturing. LWZ


While some may believe that the United States is a post- industrial‐ power, it is still the world’s top manufacturer[25] (although China is gaining), with manufacturing accounting for 12.2 percent of U.S. GDP.[26] Proponents of cap- and-‐ trade‐ acknowledged that a price on GHG emissions would negatively affect domestic manufacturing unless the cost was fully and permanently offset. Additionally, to offset the impact on manufacturing fully and permanently would be to negate the desired environmental impact of the policy (make it more expensive to emit GHGs and therefore reduce GHGs). To make up for the impact on manufacturers, the Waxman–Markey cap- and-‐ trade‐ bill gave temporary free allowances to manufacturers to ease the impact of the cap on emissions. Nearly all manufacturers use energy, and for those that emit greenhouse gases in significant quantities, such as steelmakers, a tax on a major input would be devastating. Moreover, a tax on carbon would also affect those who use carbon- intensive‐ fuels for feedstocks, as is the case in the chemical and fertilizer industry. The recent natural gas boom is encouraging more investment in these industries,[27] but a carbon tax would make such investments much less appealing.

It would cost many jobs. LWZDerrick Morgan [vice president for domestic and economic policy at The Heritage


During the cap- and-‐ trade‐ debate in 2009, the National Association of Manufacturers and the National Black Chamber of Commerce commissioned studies looking at the effect of carbon caps on manufacturing and found that hundreds of thousands of manufacturing jobs would be lost.[28] A Heritage Foundation study reached the same conclusion.[29] A carbon tax would raise prices on energy inputs for manufacturing and therefore destroy manufacturing jobs.

February 2016 ConThe tax would hurt manufacturing and coal. LWZ


A carbon tax would especially hurt states with higher concentrations of manufacturing and that use coal for electricity generation. The Heritage Foundation developed the Manufacturing Vulnerability Index, a list of states with their combined manufacturing prevalence and coal electricity generation, highly concentrated in the Midwest.[30] These states have substantial infrastructure for manufacturing and coal- powered‐ electricity generation that would be hit especially hard. A transition to other power-‐ generation sources and economic activities would be very costly to these already hurting states.

It hurts competitiveness. LWZDerrick Morgan [vice president for domestic and economic policy at The Heritage


While proponents of a carbon tax explain that they could impose an adjustment tax on goods from countries without a carbon tax to help level the playing field, such an action could precipitate a trade war. Moreover, it would place U.S. manufacturers that export from the United States to other markets at a disadvantage when compared to manufacturers that produce in nations without GHG controls.

February 2016 ConFossil fuels are great for the economy. LWZ


In America’s struggling economy, fossil fuel production stands out as a bright spot. Currently, 9,000,000 Americans work in the oil and natural gas industry,[1] and another 550,000 Americans work in coal mining.[2] Wages for these jobs are well above average,[3] and production of fossil fuels, particularly natural gas, is booming in places like North Dakota.[4] The economic gains being made now have the potential to be long- lasting; the United States has the largest reserves of fossil fuels—oil, coal, and natural gas—in the world. (See Table 1.) These gains, however, are threatened by unfriendly energy policy from Washington. President Barack Obama and his allies in Congress continue to block fuel production on federal lands and offshore,[5] have stopped a pipeline project that would increase North American–sourced petroleum products,[6] are severely limiting coal production,[7] and continue to allow the Environmental Protection Agency to regulate carbon dioxide (CO2).

Revenue-neutral just isn’t true in the context of a carbon tax. LWZRobert P. Murphy, Patrick J. Michaels, Paul C. Knappenberger. The Case Against

a Carbon Tax. CATO WORKING PAPER No. 33. September 4, 2015. http://object.cato.org/sites/cato.org/files/pubs/pdf/cato-working-paper-33.pdf

The idea of revenue-‐neutral “pro-‐growth” carbon tax reform for the U.S. is arguably a red herring, as it is very unlikely that any national politically feasible deal will respect revenue neutrality. On lower jurisdictions, note that Governor Jerry Brown wanted to use California’s cap-‐and-‐trade revenue for high-‐speed rail,27 while the website for the Regional Greenhouse Gas Initiative (RGGI)—which is the cap-‐and- ‐ trade program for power plants in participating Northeast and Mid-‐Atlantic states— proudly explains how its revenues have been spent on renewables, energy efficiency projects, and other “green” investments.28 And far from insisting on revenue neutrality, Washington State Governor Jay Inslee wants to install a new state- ‐ levelcap-‐and-‐trade levy on carbon emissions to fund his $12.2 billion transportation plan.29


February 2016 ConTaylor’s study just ignores the details – a carbon tax would not be revenue-neutral. LWZ

Robert P. Murphy, Patrick J. Michaels, Paul C. Knappenberger. The Case Against a Carbon Tax. CATO WORKING PAPER No. 33. September 4, 2015. http://object.cato.org/sites/cato.org/files/pubs/pdf/cato-working-paper-33.pdf

Ironically enough, even Taylor in his very study appealing to conservatives touts a non-‐revenue-‐neutral carbon tax (which would impose a net tax hike of at least $695 billion in its first 20 years30). It is possible that this was a mere oversight (i.e. that in his study Taylor genuinely believed he was pushing a revenue neutral plan but was simply ignorant of its details), but all doubts were removed a month later in a Niskanen Center post in which Taylor wrote: “But what if a tax-‐for-‐regulation swap were to come up in an attempt to address budget deficits and the looming fiscal imbalance?....But even were those fears realized, conservatives should take heart: using carbon tax revenues to reduce the deficit makes good economic sense.”31

There is no way a revenue-neutral carbon tax could benefit the economy. LWZRobert P. Murphy, Patrick J. Michaels, Paul C. Knappenberger. The Case Against


With progressives enumerating the various “green” investments that could be funded by a carbon tax, and with even one of the leaders in the conservative pro- ‐ carbon tax camp laying the intellectual foundation for a net tax hike, it should be clear that a revenue-‐neutral deal at the federal level is very unlikely. However, in order to drive home just how baseless are the claims that a carbon tax could somehow deliver a “win-‐win,” we should review the results from the academic economists publishing in the field. For example, a 2013 Resources for the Future (RFF) study32 considered the different impacts on GDP from various methods of implementing a revenue-‐neutral carbon tax of varying levels. Figure 3 below reproduces their findings for the case of a $30/ton tax on CO2 (in 2012 dollars) which is completely revenue neutral, with the funds being returned to citizens through one of four ways: (1) reductions in the corporate income tax rate and personal income tax rate on dividends, interest, and capital gains (blue line), (2) reductions in the payroll tax rate and personal income tax rate on labor income (red line), (3) reductions in state sales tax rates (green line), or (4) a lump-‐sum payment made to each adult citizen (purple line). The carbon tax is imposed in 2015 and revenue neutrality is maintained throughout the scenario. The results from the RFF modeling may surprise readers who are familiar with the “pro-‐growth” claims about a carbon tax swap deal. As Figure 3 reveals, all of the tax swaps reduced GDP relative to the baseline in the beginning. The only way to eventually see a “double dividend”—where the economy was stimulated in addition to any environmental benefits from the new carbon tax—was to refund all of the revenues exclusively through offsetting tax cuts on capital. Supposing instead that a completely revenue neutral deal used the carbon tax receipts to fund payroll tax reductions, Figure 3 shows (red line) that the economy would actually suffer a permanent reduction of about half a percentage point of GDP. To reiterate, this result may be very surprising to those familiar with the mantra, “tax bads, not goods.” To the extent that a U.S. carbon tax were not fully revenue neutral, the reality would be much worse than is depicted in the theoretical ideal of Figure 3.


February 2016 ConA carbon tax is not a market solution. LWZ


There are several flaws with such a pitch. In the first place, even on its own terms, a carbon tax is hardly a genuine “market solution” analogous to other introductions of property rights. The classic “tragedy of the commons” involved animals overgrazing on English pastureland, and this problem was solved by establishing private property in real estate (enforced at low costs via barbed wire fencing). But if we were to implement a “market solution” in the spirit of a carbon tax, the English government would have fined only English ranchers and shepherds a certain number of guineas for every acre-‐year of grazing by their animals, with that fine periodically adjusted based on the whims of Parliament, and where any non-‐English rancher or farmer could let his animals graze on English pastureland without paying anything to the government. (No fences would be allowed to restrict foreign ranchers, who fell outside the jurisdiction of the English government, from coming into England and grazing on the land that the English were trying to preserve for the future.) Would this be a “market solution” to the original tragedy of the commons?

A carbon tax would not satisfy progressives since it wouldn’t be sufficient to reduce globaltermperatures. LWZ


Another problem with the idea of a carbon-‐tax-‐for-‐regulation swap is that progressive environmentalists would be, on their own terms, foolish to go along with such a bargain. David Roberts, in a Vox interview with Jerry Taylor, gets the Niskanen Center president to estimate that the true social cost of carbon dioxide emissions (including the “fat tails” catastrophic risks described by Weitzman and others that are increasingly inappropriate) ranges “anywhere from, say, $70 to $80 a ton to a couple hundred dollars a ton,” and Taylor further agrees with Roberts that any politically feasible U.S. carbon tax will be “almost certainly well south” of$70/ton.38 Why then would any progressive give up direct regulatory tools, if a U.S. carbon tax—especially in the beginning, when much of the world continues to emit without constraint—will be nowhere near the level needed to achieve the (stipulated) emission cutbacks for a 2°C goal, let alone a more aggressive goal such as 350ppm? In the interview, Taylor answers that even a modest carbon tax will achieve more emission cutbacks than particular regulatory interventions, but how would that satisfy someone worried about catastrophic risks to future generations? It would simply underscore the need to pursue further command-‐and-‐control regulations in conjunction with the (inadequate) carbon tax.


February 2016 ConAustralia demonstrates that a carbon tax hurts the economy. LWZ


Robson’s study shows that the introduction of the Australian carbon tax went hand in hand with a spike in household electricity prices (the “highest quarterly increase on record,” p. 39) and unemployment, while many Australian business owners anecdotally reported that the carbon tax was a key factor in their decision to lay off workers or shut down entirely. Yet beyond these drawbacks—which help to explain the voters’ embrace of Tony Abbott in 2013—Robson’s study reveals that none of the pillars in the “conservative case” for a U.S. carbon tax swap came true in the case of Australia.

Australia demonstrates that a carbon tax is not pro-growth. LWZRobert P. Murphy, Patrick J. Michaels, Paul C. Knappenberger. The Case Against


For example, contrary to the promise that a U.S. carbon tax could be used to provide “pro-‐growth” tax reform, in Australia the carbon tax was accompanied by so many give-‐aways (to mitigate the negative impact on various groups) that the Australian government actually raised effective marginal income tax rates on 2.2 million taxpayers, compared to income tax reductions for only 560,000 taxpayers. In the same vein, rather than allowing for a reduction in top-‐down environmental policy as is promised in the U.S., the Australian carbon tax was not accompanied by any reform of their inefficient wind and solar subsidies, or Renewable Energy Target (RET) mandates. On the contrary, Australia’s carbon tax was instituted along with a “Clean Energy Finance Corporation.”

Australia proves that a carbon tax does not provide price predictability. LWZRobert P. Murphy, Patrick J. Michaels, Paul C. Knappenberger. The Case Against


Finally, advocates claim that a U.S. carbon tax will establish a predictable “price” for carbon that firms can incorporate into their long-‐term investment plans. Yet in Australia, the carbon tax was a comedy of errors. Originally the government promised during the 2010 campaign that it would not implement a carbon tax in the next 3-‐year cycle. This promise was abandoned, as the carbon tax was in fact introduced in July 2012, with a planned transition to a cap and trade scheme in 2015. Later the government proposed to move to the cap and trade scheme a year ahead of time, but this was never formalized, leaving the business community uncertain. And of course, with the September 2013 election of Abbott, the policy was upended again, with Australia’s carbon tax being abolished in July 2014. The real-‐world case of Australia shows that achieving a carbon tax most certainly does not provide “policy certainty” to allow businesses to confidently make long-‐term decisions


February 2016 Con

The Opportunity Cost of Carbon Taxes The argument is straightforward: if there is a superior option to carbon taxation that likely could not coexist with what the resolution proposes, the carbon tax is, on balance, harmful.

Cap-and-trade has the political expediency and enforcement mechanisms taxation lacks.DAT

Gollier, Christian and Jean Tirole [Toulouse School of Economics]. “Making Climate Agreements Work.” The Economist. 1 June 2015. Web. 11 January 2016. http://www.economist.com/blogs/freeexchange/2015/06/united-nations-climate- conference

Unfortunately, a green fund is too transparent to be politically acceptable, as governments are usually reluctant to be seen giving vast amounts of money to foreigners. Enforcement of a carbon tax is also problematic, because governments have strong incentives to turn a blind eye toward certain polluters, to underestimate their pollution, or to compensate them by other means such as coal subsidies or tax cuts on fuel. Foreigners cannot easily impose stringent tax collection when a country is reluctant to strengthen it, as has been observed in Greece under the Troika.

By contrast, an international enforcement mechanism focused on the quantity of national emissions is relatively straightforward. All one must do is monitor a country’s carbon-dioxide emissions, and modern technologies make that easy. We therefore favour a cap-and-trade scheme, in which a multilateral organisation either auctions or allocates tradable permits to participating countries, which entitle the holder to a certain level of emissions. Cap-and- trade schemes to be certain must be properly conceived, as experience with the European Union's emissions trading system demonstrates. However, cap-and-trade policies have spread round the world, to California, South Korea and parts of China for carbon-dioxide emissions as they had done for other pollutants, suggesting their implementation is a practical possibility.

A market for these permits would ensure that a single carbon price emerges from mutually beneficial trades. A country would purchase additional permits when its national emissions exceed its allowance, and any surplus permits could be sold. Compensation could be handled through the allocation and trading of permits.

For Con teams, the most intriguing nature of a cap-and-trade advocacy is the international applicability of the system. This ensures that the United States does not suffer competitively while addressing the central harm at play here: mitigating climate change and its effects.


February 2016 ConTax gas, not carbon. DAT


Raising taxes on gasoline and (motor) diesel is another option. While modest excise taxes on these fuels already exist in the United States, they are substantially lower than in other industrialized nations.

For example, in the U.S., federal excise taxes on gasoline amount to 18.4 cents per gallon, with local tax rates typically taxing gasoline at additional 20-30 cents per gallon in 2010. The OECD average for gasoline excise taxes is approximately $3.39 per gallon, about 7 times the rate of the U.S. tax.[7] OECD taxation of gasoline ranged from $0.34 per gallon (Mexico) to $5.14 per gallon (Turkey); the U.S. has the second-lowest rate of gasoline taxation among OECD countries (OECD 2011). In addition, per-mile fuel taxes in the U.S. are low by historical standards, falling by 40 percent in real terms since 1960 (Parry, Walls, and Harrington 2007). Moreover, fuel taxes at least three times as high as current levels (and perhaps higher still) appear to be justified by the adverse side effects of motor vehicles—pollution, congestion, and so on (Parry, Walls and Harrington 2007).

Higher excise taxes on motor fuels could raise significant amounts of revenue. For example, Parry (2011) estimates that raising gasoline and diesel fuel taxes to their corrective levels would increase revenue by around 0.8 percent of GDP, while CBO (2009) estimates that a 50 cent increase in the gasoline excise tax alone would raise about 0.3 percent of GDP. Raising the gas tax by 25 cents per year for 10 years would raise substantially more in revenues, but would still leave U.S. gas tax rates well below those of European countries.

February 2016 Con

The Environmental Impact is Negligible In itself, this is not an argument. Just because carbon taxes are ineffective at limiting emissions does not make the Con correct—a lack of benefits is a significant difference from a presence of benefits. Couple this with economic arguments, however—a paring of economic harms and negligible environmental benefits—and the framework for a Con case comes together.

Big price increases yield small environmental benefits. DATMcArdle, Megan. “Should We Re-Evaluate Carbon Taxes?” The Atlantic. 26 April 2011.

Web. 11 January 2016. http://www.theatlantic.com/business/archive/2011/04/should- we-re-evaluate-carbon-taxes/237896/

However, Jim Manzi has been making a pretty compelling argument that such a tax will do much less than people like me have been anticipating. Even the long-term response to price increases is simply too low:

Broadly, this means that even in the rich countries, a 1% increase in price leads to less than a 0.1% decrease in consumption over the long term. And that's the best-case; in the short term, and in poorer countries, it's even less. Meanwhile, income elasticity (how demand changes with rising or falling incomes) is positive, and a much larger effect. As long as income growth continues, demand will also grow unless the price changes are very, very large.


February 2016 ConCarbon taxes “buy time” that isn’t needed. DAT

McArdle, Megan. “Should We Re-Evaluate Carbon Taxes?” The Atlantic. 26 April 2011. Web. 11 January 2016. http://www.theatlantic.com/business/archive/2011/04/should- we-re-evaluate-carbon-taxes/237896/

There are two potential rejoinders to this, however, that I don't have great answers for. The first is that such taxes are almost always regressive, and though there are various ways we could make them less so, none of them fully solve the problem.

Given that these taxes are regressive, we have to ask whether they're really worth it. As Robert Laughlin recently pointed out in the American Scholar, slightly delaying the amount of carbon we pump into the atmosphere isn't going to do much good. On a geologic scale, the difference between burning all the accessible fossil fuels over the span of 300 years, and burning them over the span of 350-400 years, is not large enough to get very excited about.

Even if a carbon tax didn't eliminate all fossil fuel usage, or even drive it down to sustainable levels, it would be worthwhile if it bought us enough time to develop alternative energy sources. But the low price elasticity suggests that it won't buy us that much time--and as one of Andrew Sullivan's readers points out, the elasticity of innovation to energy price changes also seems to be low, at least in the transport sector

A carbon tax fails to satisfy any policy goals. DATMuro, Mark. “Carbon Tax Dreams: What About Cleantech Deployment?”

Brookings Institution. 31 October 2012. Web. 11 January 2016. http://www.brookings.edu/research/opinions/2012/10/31-carbon-tax-muro

The sticking point here is that while the conventional wisdom among carbon pricers holds that higher dirty energy prices will provide the right market signals to entrepreneurs, who will then develop and deploy clean new technologies, a ton of evidence suggests that pricing alone won’t generate enough deployment to get us where we need to go. Instead, it is becoming increasingly obvious that along with pricing we need a direct technology deployment push.

One hint of this comes from the modelers. Under neither of their respective carbon tax proposals do the Brookings or MIT groups forecast that emissions will drop enough to even come close to the 80 percent cut in emissions below 1990 levels that is the nation’s long-term carbon emissions goal. Yes, fossil fuel use would go down, oil imports would shrink slightly, and emissions would decline, but much more work would need to be done to tackle global warming. Similarly, an interesting analysis by the Breakthrough Institute concluded that a $20 per ton carbon tax would offer just one-half to one-fifth the incentive of today’s subsidies for the deployment of solar, wind, and other zero-carbon technologies.

February 2016 ConA US only carbon tax can’t solve. LWZ

Thomas Pyle [president of the Institute for Energy Research]. Carbon Tax's Impact on Global Warming Would Be Negligible. US News. Dec 9, 2012. http://www.usnews.com/debate-club/is-a-carbon-tax-a-good-idea/carbon-taxs- impact-on-global-warming-would-be-negligible

Lastly, some people argue we should impose a carbon tax to address climate change. This argument is almost always disingenuous. Reduction of U.S. carbon dioxide emissions alone cannot have a meaningful impact on global climate. As climate researcher Paul Knappenberger recently explained: Using assumptions based on the Intergovernmental Panel on Climate Change (IPCC) Assessment Reports, if the U.S. as a whole stopped emitting all carbon dioxide (CO2) emissions immediately, the ultimate impact on projected global temperature rise would be a reduction, or a "savings," of approximately 0.08°C by the year 2050 and 0.17°C by the year 2100—amounts that are, for all intents and purposes, negligible. Yes. You read that correctly. If America magically reduced our carbon dioxide emissions to zero overnight, the world would be 0.08°C cooler by 2050. The reason is simple—the majority of new carbon dioxide emissions will come from developing countries. A U.S.-only carbon tax would have no noticeable impact on global temperature.

Most emissions come from the developing world so wouldn’t affect the US. LWZMark J Perry [professor of economics and finance in the School of Management at


Even if a carbon tax could significantly reduce greenhouse- gas‐ emissions, should it be implemented if it would undermine the economic recovery and stall short- term‐ growth? Under one possible approach, all countries would agree to penalize carbon emissions at an internationally harmonized carbon tax. But let's be realistic: Because of the huge economic and political imbalances between the industrialized and developing world, the carbon- tax‐ approach to emissions reduction is a pipe dream. As much as 85% of the projected increase in man- made ‐ global emissions of carbon dioxide will come from developing countries, as a result of growing electric power use and car ownership that accompany economic growth. America and other advanced countries won't sacrifice their living standards, and the developing ones aren't going to worry about climate change while their incomes are a fraction of those in advanced nations.


February 2016 ConWe’ve already made great gains in reducing emissions. LWZ

Mark J Perry [professor of economics and finance in the School of Management at University of Michigan–Flint and a scholar at the American Enterprise Institute in Washington, D.C.] Carbon Tax Would Kill Major Industries, Hurt U.S. Consumers. 10/16/2012. Investor's Business Daily: http://news.investors.com/ibd-editorials-on- the-right/101612-629540-carbon-tax-would-kill-off-growth-in-american- economy.htm#ixzz3hip9Hkpy

What's more, the argument for a carbon tax unfairly discounts the hard- won‐ gains that U.S. industries already have made in reducing carbon emissions and threatens to hinder further progress. The fact is, America has cut its carbon emissions more than any other country in the world in recent years — by 9% since 2007. Rather than waste our time on what is politically unattainable, why not focus on some initiatives that already are making a difference? The revolution in natural gas production has made a reduction in emissions possible — not only in the U.S., but also globally. Natural gas is much cleaner than coal, generating at least 50% less carbon per kilowatt hour. And because electricity generation produces 41% of the carbon that America emits — the largest single source — the switch from coal to gas is significant.

Advances in technology will reduce emissions. LWZMark J Perry [professor of economics and finance in the School of Management at


Thanks to advanced drilling technologies and an abundance of gas from shale deposits, natural gas has accounted for more than 80% of new electrical generating capacity in the U.S. The share of U.S. electricity that comes from coal is forecast to fall below 40% this year, its lowest level since World War II and down from 50% four years ago. By the end of this decade it is likely to be near 30%. Now we need to export U.S. technology for seismic imaging, hydraulic fracturing and horizontal drilling to other countries with large shale- gas‐ deposits. Spreading advanced energy technologies globally would lower the cost of controlling emissions substantially. By using advances in technology, we can expand the use of natural gas, nuclear power and renewable energy. That would achieve a substantial reduction in carbon emissions without resorting to a carbon tax that would hobble our economy.


February 2016 ConUnilateral action would fail. LWZ


Even if one assumes that rising levels of carbon dioxide in the atmosphere lead to higher global temperatures, a carbon tax in the United States that reduces emissions domestically would have zero direct effect on foreign emissions if we acted alone. In fact, unilateral action by the U.S. would have very little effect on total global emissions. The EPA analyzed a cap-and-trade proposal and projected global CO2 concentrations in a baseline and under legislation, demonstrating the effects graphically.[16] (See Chart 1.) The Administrator of the EPA testified on July 7, 2009: “I believe the central parts of the [EPA] chart are that U.S. action alone will not impact world CO2 levels….”[17] The analysis showed that even if the U.S. adopted stringent carbon caps under that legislation[18] and the international community did not, global CO2 concentrations would decrease 25 parts per million (with concentrations equaling 694 ppm in 2095). International action, by contrast, would decrease concentrations by 202 ppm.

Carbon pricing has historically been the go-to solution for all things. LWZStepp, Matthew, and Megan Nicholson. "Carbon Pricing Won't Solve Climate Change.


Carbon pricing has been the go-to solution for economists and environmentalists alike since climate change was identified as one of the foremost social and environmental challenges of our time. Want a climate rescue plan? Carbon pricing. Want to raise revenue for clean energy deployment? Carbon pricing. It's the "silver bullet" for other things, too. Want to reduce reliance on foreign oil? Or raise revenue to correct other tax inefficiencies?Carbon pricing. This approach appeals to many because of its strong roots in neoclassical economics,, which suggests that higher prices will reduce consumption and lead to a big shift to renewable energy. But as long as nations use carbon pricing as their primary solution, climate change will never be addressed – for two reasons:

February 2016 ConIt takes too high of a price to work. LWZ

Stepp, Matthew, and Megan Nicholson. "Carbon Pricing Won't Solve Climate Change. Innovation Will." The Christian Science Monitor. The Christian Science Monitor, 13 June 2014. Web. 02 Aug. 2015.<http://www.csmonitor.com/Environment/Energy-Voices/2014/0613/Carbon- pricing-won-t-solve-climate-change.-Innovation-will>.

First, it takes a high carbon price to realistically change consumer habits. (Experts suggest around $30 per ton of CO2 to start.) And no one wants to pay it. The Australian government is fighting to repeal its national carbon price, set to reach $25.40 per ton in 2014-15, to reduce consumers’ cost of living and, as its Department of the Environment puts it, “boost economic growth, increase jobs, and enhance international competitiveness.” South Africa is the latest nation to pull back on its carbon pricing plan because of economic concerns. In early 2014, the EU Emissions Trading System carbon price was only $5 per ton, effectively the equivalent of raising the price of gasoline by five cents a gallon. Politically feasible carbon prices are too low to shift consumer behavior away from fossil fuels. Adequately high carbon prices are tried and reversed, or are never tried.

Carbon taxes don’t change the cost of alternatives. LWZStepp, Matthew, and Megan Nicholson. "Carbon Pricing Won't Solve Climate Change.


Second, carbon prices, whether large or small, only raise the cost of fossil energy – they do not lower the cost of alternatives. They are unable to stimulate the multitude of technology breakthroughs in energy generation and storage needed to lower the cost and improve the performance of clean energy. With the Intergovernmental Panel on Climate Change’s (IPCC) recent – and effectively desperate – declaration that Earth’s warming trend is both “unprecedented” and “unequivocal,” it is a good idea to start thinking about a broader climate rescue plan.


February 2016 ConUnilateral action would increase emissions. LWZ


Just as in a unilateral U.S. cap-and-trade system, a unilateral U.S. carbon tax would likely further increase foreign emissions because of a phenomenon called “carbon leakage.” As energy-intensive industry relocates from the United States to other nations such as Mexico, Vietnam, or China (already the world’s largest emitter of greenhouse gases), GHG emissions and toxic pollutants could increase more than they would if those industries remained in the United States.

The social cost of carbon is arbitrary. LWZRobert P. Murphy, Patrick J. Michaels, Paul C. Knappenberger. The Case Against


In the policy debate over carbon taxes, a key concept is the “social cost of carbon,” which is defined as the (present value of) future damages caused by emitting an additional ton of carbon dioxide. Estimates of the SCC are already being used to evaluate federal regulations, and will serve as the basis for any U.S. carbon tax. Yet the computer simulations used to generate SCC estimates are largely arbitrary, with plausible adjustments in parameters—such as the discount rate—causing the estimate to shift by at least an order of magnitude. Indeed, MIT economist Robert Pindyck considers the whole process so fraught with unwarranted precision that he has called such computer simulations “close to useless” for guiding policy.

The UN’s own report shows that a carbon tax would probably cause more harm than good.LWZ


Future economic damages from carbon dioxide emissions can only be estimated in conjunction with forecasts of climate change. But recent history shows those forecasts are in flux, with an increasing number of forecasts of less warming appearing in the scientific literature in the last four years. Additionally, we show some rather stark evidence that the family of models used by the U.N.’s Intergovernmental Panel on Climate Change (IPCC) are experiencing a profound failure that greatly reduces their forecast utility. Ironically, the latest U.N. Intergovernmental Panel on Climate Change (IPCC) report indicated that a popular climate target cannot be justified in cost/benefit terms. Specifically, in the middle-‐of-‐the-‐road scenarios, the economic compliance costs of limiting global warming to 2 degrees Celsius would likely be higher than the climate change damages that


February 2016 Consuch a cap would avoid. In other words, the U.N.’s own report shows that aggressive emission cutbacks—even if achieved through an “efficient” carbon tax—would probably cause more harm than good.

A carbon tax would not be revenue-neutral and hurt the economy. LWZRobert P. Murphy, Patrick J. Michaels, Paul C. Knappenberger. The Case Against


If the case for emission cutbacks is weaker than the public has been led to believe, the claim of a “double dividend” is on even shakier ground. There really is a “consensus” in this literature, and it is that carbon taxes cause more economic damage than generic taxes on labor or capital, so that in general even a revenue- ‐ neutral carbon tax swap will probably reduce conventional GDP growth. (The driver of this result is that carbon taxes fall on narrower segments of the economy, and thus to raise a given amount of revenue require a higher tax rate.) Furthermore, in the real world at least some of the new carbon tax receipts would probably be devoted to higher spending (on “green investments”) and lump-‐sum transfers to poorer citizens to help offset the impact of higher energy prices. Thus in practice the economic drag of a new carbon tax could be far worse than the idealized revenue- ‐ neutral simulations depict.

Empirical evidence shows that a carbon tax fails and hurts the economy. LWZRobert P. Murphy, Patrick J. Michaels, Paul C. Knappenberger. The Case Against


When moving from academic theory to historical experience, we see that carbon taxes have not lived up to the promises of their supporters. In Australia, the carbon tax was quickly removed after the public recoiled against electricity price hikes and a faltering economy. Even in British Columbia—touted as the world’s finest example of a carbon tax—the experience has been underwhelming. After an initial (but temporary) drop, the B.C. carbon tax has not yielded significant reductions in gasoline purchases, and it has arguably reduced the B.C. economy’s performance relative to the rest of Canada.


February 2016 ConThe SCC takes into account the whole world which would make the US responsible for

emissions it didn’t produce. LWZRobert P. Murphy, Patrick J. Michaels, Paul C. Knappenberger. The Case Against


The “social cost of carbon” (often abbreviated SCC) is a key concept in the economics of climate change and related policy discussions of a carbon tax. The SCC is defined as the present-‐discounted value of the net future external damages from an additional unit of carbon dioxide emissions. In terms of economic theory, the SCC measures the “negative externalities” from emitting CO2 (and other greenhouse gases expressed in CO2- ‐equivalents), and helps quantify the “market failure” where consumers and firms do not fully take into account the true costs of their carbon- ‐ intensive activities. To a first approximation, the “optimal” carbon tax would reflect the SCC (along the emission trajectory that would obtain with the carbon tax regime), and in practice the Obama Administration has issued estimates1 of the SCC that are being used in the cost/benefit evaluation of federal regulations (such as minimum energy efficiency standards) that aim to reduce emissions relative to the baseline. It is important to note that the SCC reflects the estimated damages of climate change on the entire world. This means that if the SCC (calculated in this fashion) is used in federal cost/benefit analyses, the analyst is contrasting benefits accruing mostly to non-‐Americans with costs borne mostly by Americans. Whether the reader thinks this is valid or not, it is clearly an important issue that has not been made clear in the U.S. debate on climate change policy. In any event, the Office of Management and Budget (OMB), in its Circular A-‐4, clearly states that federal regulatory analyses should focus on domestic impacts: Your analysis should focus on benefits and costs that accrue to citizens and residents of the United States. Where you choose to evaluate a regulation that is likely to have effects beyond the borders of the United States, these effects should be reported separately.2

A carbon tax would not benefit the US as much as supporters claim. LWZRobert P. Murphy, Patrick J. Michaels, Paul C. Knappenberger. The Case Against


However, when the Obama Administration’s Interagency Working Group calculated the SCC, it ignored this clear OMB guideline, and only reported a global value of the SCC. Thus, if a regulation (or carbon tax) is thought to reduce carbon dioxide emissions, then the estimated benefits (calculated with use of the SCC) will vastly overstate the benefits to Americans. As an affluent nation, the U.S. economy is much less vulnerable to the vagaries of weather and climate. Using two different approaches, the Working Group in 2010 “determined that a range of values from 7 to 23 percent should be used to adjust the global SCC to calculate domestic effects. Reported domestic values should use this range” (p. 11). Therefore, following OMB’s clear guideline on reporting the domestic impacts of proposed regulations, the SCC value would need to be reduced anywhere from 77 to 93 percent, in order to show the benefit to Americans from stipulated reductions in carbon dioxide emissions. To repeat, these figures all derive from the Obama Administration’s own Working Group report.


February 2016 ConThe model to estimate SCC has many flaws. LWZ


In addition to such procedural problems with the use of the SCC in federal policy, there are deeper, conceptual problems. The average layperson may have the belief that the “social cost of carbon” is an empirical fact of nature that scientists in white lab coats measure with their equipment. However, in reality the SCC is a malleable concept that is entirely driven by the analyst’s (largely arbitrary) initial assumptions. The estimated SCC can be quite large, modest, or even negative—this latter meaning that greenhouse gas emissions should arguably be subsidized to benefit humanity—depending on defensible adjustments of the inputs to the analysis. The most popular current approach used by U.S. policymakers to estimate the SCC involves the use of computer-‐based Integrated Assessment Models (IAMs), which are complex simulations of the entire global economy and climate system for hundreds of years. Officially, the IAMs are supposed to rely on the latest results in the physical science of climate change, as well as economic analyses of the impacts of climate change on human welfare, where these impacts are measured in monetary units but include a wide range of non-‐market categories (such as flooding and loss of ecosystem services). With particular assumptions about the path of emissions, the physical sensitivity of the climate system to atmospheric CO2 concentrations, and the impact on humans from changing climate conditions, the IAMs estimate the flow of incremental damages occurring centuries into the future as a result of an additional unit of CO2 emissions in some particular year. Then this flow of additional dollar damages (over the centuries) can be turned into an equivalent present value expressed in the dollars at the date of the emission, using a discount rate chosen by the analyst, where this rate is typically not derived from observations of market rates of interest but is instead picked (quite openly) according to the analyst’s ethical views on how future generations should be treated.

New literature shows that we have a lower climate sensitivity than many suggest. LWZRobert P. Murphy, Patrick J. Michaels, Paul C. Knappenberger. The Case Against


The abundance of literature supporting a lower climate sensitivity was at least partially reflected in the latest (2013) assessment of the Intergovernmental Panel on Climate Change (IPCC): Equilibrium climate sensitivity is likely in the range 1.5°C to 4.5°C (high confidence), extremely unlikely less than 1°C (high confidence), and very unlikely greater than 6°C (medium confidence). The lower temperature limit of the assessed likely range is thus less than the 2°C in the AR4 [Fourth Assessment Report]… Clearly, the IWG’s assessment of the low end of the probability density function that best describes the current level of scientific understanding of the climate sensitivity is indefensible.


February 2016 ConSCC as a policy tool in inherently subjective. LWZ


Yet to repeat, the problem with the SCC as a tool in policy analysis goes beyond quibbles over the proper parameter values. At least the equilibrium climate sensitivity (ECS) is an objectively defined (in principle) feature of nature. In contrast, there are other parameters needed to calculate the SCC that by their very essence are subjective, such as the analyst’s view on the proper weight to be given to the welfare of future generations. Needless to say, this approach to “measuring” the SCC is hardly the way physicists estimate the mass of the moon or the charge on an electron. To quote MIT economist Robert Pindyck (who favors a U.S. carbon tax) in his scathing Journal of Economic Literature article: And here we see a major problem with IAM-‐based climate policy analysis: The modeler has a great deal of freedom in choosing functional forms, parameter values, and other inputs, and different choices can give wildly different estimates of the SCC and the optimal amount of abatement. You might think that some input choices are more reasonable or defensible than others, but no, “reasonable” is very much in the eye of the modeler. Thus these models can be used to obtain almost any result one desires. [Pindyck 2013, bold added.]7

These bad assumptions lead to bad policy. LWZRobert P. Murphy, Patrick J. Michaels, Paul C. Knappenberger. The Case Against


To see just how significant some of the apparently innocuous assumptions can be, consider the latest estimates of the SCC put out by the Obama Administration’s Working Group. For an additional ton of emissions in the year 2015, using a 3% discount rate the SCC is $36. However, if we use a 2.5% discount rate, the SCC rises to$56/ton, while a 5% discount rate yields a SCC of only $11/ton.8 Note that this huge swing in the estimated “social cost” of carbon relies on the same underlying models of climate change and economic growth; the only change is in adjustments of the discount rate which are quite plausible. Indeed, the Administration’s Working Group came under harsh criticism because it ignored explicit OMB guidance to include a 7 percent discount rate in all federal cost/benefit analyses, presumably because the SCC at such a discount rate would be close to$0/ton or even negative.9

February 2016 ConThe climate models that are used are flawed. LWZ


Then there are problems with the climate models themselves. There is clearly a large and growing discrepancy between their predictions and what is being observed, as shown in Figure 2. Our illustration, taken from John Christy of University of Alabama-‐Huntsville,12 dramatically shows the climate modelling problem in a nutshell. It shows model- ‐ predicted and observed temperatures, not at the surface, but in the lower troposphere, roughly from 5,000 to 30,000 feet. These are less compromised by earth’s complicated surface and man’s role in altering it. More important, though, is that it is the vertical profile of temperature that determines atmospheric stability. When the “lapse rate”, or the difference between the lowest layers and higher levels is large, the atmosphere is unstable. Instability is the principal source for global precipitation. While models can be (and are) “tuned” to mimic surface temperatures, the same can’t be done as easily in the vertical. As the figure indicates, the air above the surface is warming far more slowly than had been predicted, so that the difference between the surface and the upper air has changed very little. This means that observed global precipitation should be the same as it was. The forecast warming of the upper layers (in red) would reduce the surface-‐to-‐upper air temperature difference, which would tend to reduce precipitation. That means that the models themselves are making systematic errors in their precipitation projections. This has a dramatic effect on the resultant climate.When the surface is wet, which is what occurs after it rains, the sun’s energy is directed towards the evaporation of that moisture rather than the direct heating of the surface. In other words, much of what we call “sensible weather” (the kind of weather you can sense) is determined by the vertical distribution of temperature. If the popular climate models get that wrong (which is what’s happening) then all the subsidiary weather caused by it is also incorrectly specified. Therefore there are problems and arbitrariness not just with the economic assumptions, but with the physical models that are used as input to the SCC calculations. The situation is even worse than described above by Pindyck.

SCC doesn’t take into account leakage. LWZRobert P. Murphy, Patrick J. Michaels, Paul C. Knappenberger. The Case Against


Besides the arbitrariness and/or dubious choices for the major input parameters, another problem with use of the SCC as a guide to setting carbon taxes is the problem of leakage. Strictly speaking, it would make sense (even in textbook theory) to calibrate only a worldwide and uniformly enforced carbon tax to the SCC. If a carbon tax is applied only to certain jurisdictions, then emission cutbacks in the affected region are partially offset by increased emissions (relative to the baseline) in the non-‐regulated regions. Depending on the specifics, leakage can greatly increase the economic costs of achieving a desired climate goal, and thus the “optimal” carbon tax is lower if applied unilaterally in limited jurisdictions.


February 2016 ConLeakage has important implications for climate change. LWZ


To get a sense of the magnitude of the problems of leakage, consider the results from William Nordhaus, a pioneer in the economics of climate change, and creator of the DICE model (one of the three used by the Obama Administration).13 After studying his 2007 model runs, Nordhaus reported that relative to the case of the entire globe enforcing the carbon tax, to achieve a given environmental objective (such as a temperature ceiling or atmospheric concentration) with only 50 percent of planetary emissions covered would involve an economic abatement cost penalty of 250 percent. Even if the top 15 countries (by emissions) participated in the carbon tax program, covering three-‐quarters of the globe’s emissions, Nordhaus still estimated that compliance costs for a given objective would be 70 percent higher than for the full-‐coverage baseline case.14

The US reducing emissions to zero would have almost no impact on global temperatures.LWZ


To see the tremendous problem of limited participation from a different perspective, one can use the same model that EPA uses to calculate the effect of various policy proposals. The Model for the Assessment of Greenhouse-‐Gas Induced Climate Change (MAGICC) is available and easy-‐to-‐use on the Cato Institute website. MAGICC shows that even if the U.S. linearly reduced its emissions to zero by the year 2050, the average global temperature in the year 2100 would be 0.1°C—that’s one- ‐ tenth of a degree—lower than would otherwise be the case.15 Note that this calculation does not even take into account “leakage,” the fact that complete cessation ofU.S. emissions would induce other nations to increase their economic activities and hence emissions. Our point in using these results from the MAGICC modeling is not to christen them as confident projections, but rather to show that even on their own terms, using an EPA-‐endorsed model, American policymakers have much less control over global climate change than they often imply.


February 2016 ConThe UN can’t actually justify the goal of the 2 degree limit. LWZ


U.N. REPORTS CAN’T JUSTIFY POPULAR CLIMATE GOAL Although the goal’s selection was never formally explained, advocates of government intervention to mitigate climate change have broadly settled on a minimum goal of limiting global warming (relative to preindustrial times) to 2°C, with many pushing for much more stringent objectives (such as limiting atmospheric greenhouse gas concentrations to 350ppm of CO2). Given the confidence with which carbon tax advocates refer to the “consensus” among scientists on the key issues in the climate change debate, the innocent American public would surely conclude that the periodic reports from the United Nations Intergovernmental Panel on Climate Change (IPCC) would easily justify implementation of government policies to hit the 2°C target. Ironically, this is not the case. According to 2013 IPCC report [often referred to as “AR5” for “Fifth Assessment Report”], to “likely” limit global warming to 2°C would require stabilizing atmospheric concentrations between 430 -‐ 480ppm by the year 2100.16 The same AR5 report shows that achieving this climate goal would entail reductions in consumption in the year 2100 of4.8 percent (which is the central estimate, and relative to the baseline).17 These are the costs of achieving the popular 2°C goal, according to the latest U.N. report. In contrast, to compute the benefits of the 2°C goal we would need to know the reduction in climate change damages that would result under business-‐as-‐usual versus the mitigation scenario (with the temperature ceiling). Even under the most pessimistic emission scenario with no government controls (RCP8.5), by 2100 the AR5’s central estimate of global warming is about 4.5°C, and a more realistic business-‐as-‐usual scenario (between RPC6 and RPC8.5) would involve warming by 2100 of less than 4°C.18 Therefore the gross benefits of the stipulated mitigation policy are the climate change damages from 4°C warming minus the climate change damages from 2°C warming. Unfortunately, the AR5 report does not allow us to compute such figures, because just about all of the comprehensive analyses of the impacts of global warming consider ranges of 2.5°C - ‐ 3°C. The AR5 does contain a table19 summarizing some of the estimates in the literature, out of which the most promising (for our task) are two results from Roson and van der Mensbrugghe’s 2012 study.20 They estimated that 2.3°C warming would reduce GDP by 1.8 percent, while 4.9°C warming would reduce GDP by 4.6 percent. (Note that this particular estimate was the only one in the AR5 table that estimated the impact of warming higher than 3.2°C.) Therefore, using ballpark figures, one could conclude from the AR5 summary of impacts that limiting climate change to 2°C rather than an unrestricted 4°C of warming, would mean that the Earth in the year 2100 would be spared about (4.6- ‐ 1.8) = 2.8 percent of GDP loss in climate change damages. In contrast, the same IPCC AR5 report told us that the economic compliance costs of the mitigation goal would be 4.8 percent of consumption in the year 2100.


February 2016 ConTo limit warming to 2 degrees would not make sense under cost-benefit analysis. LWZ


As this demonstration has shown, even if we take the IPCC’s numbers at face value, and even assuming away the practical problems that would prevent mitigation policies from reaching the theoretical ideal, the popular climate goal of limiting global warming to 2°C would most likely entail greater economic damages than it would deliver in benefits (in the form of reduced climate change damages). The pursuit of more aggressive goals, and/or the use of imperfectly designed policy tools to achieve them, would, of course, only make the mismatch between costs and benefits even worse.

The approach we take to preventing warming makes no sense. LWZRobert P. Murphy, Patrick J. Michaels, Paul C. Knappenberger. The Case Against


As a postscript to these observations, we note that the leaders in the pro-‐carbon tax camp are abandoning traditional cost/benefit analysis as (allegedly) inappropriate in the context of climate change. For example, Harvard economist Martin Weitzman has warned that climate scenarios involve “fat tails” that (mathematically) make the conventionally-‐calculated social cost of carbon tend to infinity. Weitzman and others have moved away from treating a carbon tax as a policy response to a given (and known) negative externality, and instead liken it to a form of insurance pertaining to a catastrophe that might happen but with unknown likelihood. But the utility of such “insurance” is being compromised, given the strong emerging evidence very large warming is unlikely. This approach, which is growing in popularity among the advocates of aggressive government intervention, has several problems. In the first place, the whole purpose of the periodic IPCC reports was to produce a compilation of the “consensus” research in order to guide policymakers. But when the models and methods contained in the IPCC reports do not yield aggressive enough action, critics such as Weitzman point out their (admitted) shortcomings and propose that policymakers take actions based on what we don’t know.21 Yet as economist David R. Henderson points out, broad-‐based uncertainty cuts both ways in the climate change policy debate. For example, it is possible that the Earth is headed into a period of prolonged cooling, in which case offsetting anthropogenic warming would be beneficial— meaning that a carbon tax would be undesirable.22 Another problem with Weitzman’s approach—as Nordhaus, among other critics, has pointed out23—is that it could be used to justify aggressive actions against several catastrophic risks, including asteroids, rogue artificial intelligence developments, and bio-‐weapons. After all, we can’t rule out humanity’s destruction from a genetically engineered virus in the year 2100, and what’s worse we are not even sure how to construct the probability distribution on such events. Does that mean we should be willing to forfeit 5 percent of global consumption to merely reduce the likelihood of this catastrophe? This question leads into the final problem with the insurance analogy: With actual insurance, the risks are well-‐known and quantifiable, and competition among insurers provides rates that are reasonable for the damages involved. Furthermore, for all practical purposes buying the insurance policy eliminates the (financial) risk. Yet to be analogous to the type of


February 2016 Con“insurance” that Weitzman et al. are advocating, a homeowner would be told that there was a roving gang of arsonists who might, decades from now, set his home on fire, that a fire policy would cost 5 percent of income every year until then, and that even if the house were struck by the arsonists, the company would indemnify the owner for only some of the damages. Who would buy such an “insurance” policy?


February 2016 Con

Regressive Tax

Even liberal think tanks agree that it would hurt the poor the most. LWZBastasch, Michael. "Liberal Think Tank Admits A Carbon Tax Is ‘Regressive’."

The Daily Caller. The Daily Caller, 10 Dec. 2015. Web. 11 Jan. 2016.<http://dailycaller.com/2015/12/10/liberal-think-tank-admits-a-carbon-tax-is- regressive/>.

Taxing carbon dioxide will hurt the poor and harm the very people liberals argue are the most vulnerable to the impacts of global warming, according to a policy brief by a liberal think tank. “A carbon tax would be regressive, imposing a larger burden, relative to income, on low-income households than on high-income ones,” according to the Tax Policy Center (TPC), a group jointly funded by the Urban Institute and the Brookings Institution — both are left-leaning think tanks. “A $20 per ton tax would be a hit of 0.8 percent of pre-tax income for households in the bottom fifth of the income distribution, but only a 0.5 percent hit in the top fifth,” according to TPC’s brief.

There is no arrangement that would help all income groups. LWZBastasch, Michael. "Liberal Think Tank Admits A Carbon Tax Is ‘Regressive’."

The Daily Caller. The Daily Caller, 10 Dec. 2015. Web. 11 Jan. 2016.<http://dailycaller.com/2015/12/10/liberal-think-tank-admits-a-carbon-tax-is- regressive/>.

The Tax Policy Center’s brief found that, on a macroeconomic level, some uses of carbon tax revenues would be better for poor families than others, but noted none of the scenarios they analyzed would benefit all income groups. “Tax and dividend, in contrast, would do little to offset the macroeconomic drag of taxing carbon but would be very progressive,” TPC notes. “Households in the bottom 60 percent of the income distribution would come out ahead, while high-income households would be worse off.” “A 50-50 mix, using half of carbon revenues to cut corporate taxes and half to pay dividends, would be close to distributionally neutral,” TPC found. “Low- and high-income households would come out slightly ahead, while those in the middle would come out slightly behind.”


February 2016 ConA carbon tax would hurt the poor the most. LWZ


The poor tend to spend a higher proportion of their earnings on energy, particularly utilities and transportation. Moreover, some Americans use more fossil- fuel‐ energy than others because of driving distances (rural families drive more—27,700 miles per household vs. 17,600 miles for urban households[44]); geography (less temperate weather means more heating and cooling costs); and already constructed energy infrastructure (coal plants are prevalent in the Midwest near mining operations). A carbon tax would disproportionately hit these families, whose behavior is difficult to change in the short run.

The poor would be hurt because they spend a larger percent of their money on energy. LWZDerrick Morgan [vice president for domestic and economic policy at The Heritage


Dampening the impact on poor families was deemed a politically necessary design element for cap- and-‐ ‐ trade and would likely be required in any carbon tax. Looking at compliance costs for cap- and-‐ trade‐ (with an allowance price around $20 per ton), the Congressional Budget Office found that the lowest quintile lost more than three times as much income (measured as a percentage) as the top quintile (2.5 percent as opposed to 0.7 percent).[48] Because the poor spend a higher portion of their income on energy and the higher energy prices are passed on to the consumer,[49] this result is not surprising. In fact, increasing consumer costs is a primary reason for pricing carbon, according to many of its proponents. As Treasury Secretary Timothy Geithner has explained, it is necessary for the price of energy to increase if “you’re going to change how people use energy.”[50] And who will change their behavior? It is far more likely that the poor and middle class—those who have to live from paycheck to paycheck and spend a bigger portion of their earnings on energy—will be forced to alter their lifestyles much more (drive less, heat and cool the home less, buy fewer goods and services) than the wealthy.

February 2016 ConCarbon tax unfairly burdens the poor. LWZ

Stanford research finds carbon regulation burden heaviest on poor. Stanford Report, February 28, 2014 http://news.stanford.edu/news/2014/february/kolstad- carbon- tax- 022814.html

The heaviest burden for climate change regulation costs falls on people – especially lower income groups– and not corporations, according to new Stanford research. The reason is that companies ultimately pass on those costs to people. For the poor, basic necessities take up a bigger chunk of the budget than for the rich. "Households in the lowest income group pay, as a percent of income, more than twice what households in the highest 10 percent of the income distribution pay," wrote economist Charles Kolstad, a senior fellow at the Stanford Institute for Economic Policy Research and the Precourt Institute for Energy. The research gives impetus to adopting a fairer approach to carbon regulation costs, Kolstad said. "This regressivity can be addressed through transfer payments, if and when the U.S. decides to regulate greenhouse gases leading to climate change," said Kolstad, who researches environmental economics, regulation and climate change. As an example, he suggests reducing the payroll tax for lower income groups as a way to make a carbon tax more fair. The study examined Bureau of Economic Analysis data and used a $15 per metric ton carbon "tax" as a scenario. In other words, every person or organization (such as a company) that emits carbon into the atmosphere would pay a tax on the total amount emitted multiplied by $15 per metric ton of carbon. The researchers looked at how such a hypothetical tax would hit individual income groups, industries and different regions. Kolstad said that price and substitution effects may somewhat dampen the regressive nature of such costs. For example, when prices change, people change what they do. If the price of heating oil goes up, people may use more electricity or natural gas to warm their homes. The paper was published as a SIEPR policy brief and is based on detailed analysis by Kolstad and Corbett Grainger of the University of Wisconsin- Madison.‐ Fairness issue Their research points out that carbon regulation involves the question of who pays the most and the least – an issue with political and social consequences. Analyzing greenhouse cost burdens is important due to the urgency of coping with global warming, which may lead to sea- level‐ rise, local temperature and precipitation changes, and increased frequency of extreme weather. Kolstad said, "One of the most significant problems associated with passing any sort of legislation is perceived fairness. Although there are other issues, fairness in paying for the legislation and fairness in the benefits that the legislation generates can be key to passage. This work helps understand the extent to which paying for carbon legislation can be perceived as fair or unfair, with obvious remedies for correcting any unfairness." The poorest households spend a higher percentage of their income on fuels for heating and transportation, while higher income individuals spend proportionately a greater amount on services, which usually have lower than average carbon emissions per unit of output. "Emissions increase more slowly as income increases. Thus, one would expect some regressivity in a carbon tax," the study stated. Kolstad expected the regressive nature of carbon regulations to be even more dramatic. "I thought that a carbon regulation would be far more regressive, falling on the shoulders of the poor more than it does," he said. This expectation, he said, was based on the fact that lower income Americans often drive older, less fuel-‐


February 2016 Conefficient cars and frequently commute long distances to work to access lower cost housing. "Although that mental model may be correct, transportation fuel is only part of the picture," he said.

These results reflect the growing body of literature that has begun to suggest—and document—that broad economy-wide pricing strategies alone induce only modest technology change and deployment.


February 2016 Con

Carbon Lacks Alternatives One premise of carbon taxes is to incentivize alternative fuel sources. Therein lies the rub: without any practical, economically viable alternatives to “carbon,” the role of carbon taxes is simply to impose costs without providing any practical benefits. The onus is on Con teams to demonstrate how a carbon tax pushes the United States not to progress environmentally, but to shoot itself in the foot economically without transitioning to a “green” future.

Wind and solar energy generation are not viable. DAT“The Experts: What Renewable Energy Source Has the Most Promise?” The Wall Street

Journal. 17 April 2013. Web. 12 January 2016. http://www.wsj.com/articles/SB10001424127887324485004578424624254723536

[Craig Pirrong, Bauer College of Business at University of Houston]: All renewables are cursed with fundamental problems that make their future stand-alone (i.e. unsubsidized) viability as anything but a marginal energy source highly questionable.

With respect to electricity generation, the major renewables (wind and solar) are both intermittent and diffuse. These are obstacles inherent in the source of the energy that will be difficult to surmount. One illustration. Here in Texas, when it gets hot—and the demand for electricity spikes—the wind stops blowing. Given the fact that we need generation most when it is hot, this is a serious deficiency. Solar has greater potential, given the prospects for innovations that improve the efficiency of solar panels and reduce the cost of producing them. But even for solar, the vicissitudes of the sun (which vary by season and location) and the diffusive nature of solar power limit its potential.

What's more, the revolution in natural gas undermines the economics of these technologies.

Countries that have been quite aggressive in their pursuit of wind and solar have realized that their aspirations greatly outpaced the technology. Both Germany and Spain have announced that they will substantially curtail their government support for wind and solar.


February 2016 ConTransportation will not shift away from carbon. DAT

“The Experts: What Renewable Energy Source Has the Most Promise?” The Wall Street Journal. 17 April 2013. Web. 12 January 2016. http://www.wsj.com/articles/SB10001424127887324485004578424624254723536

[Craig Pirrong, Bauer College of Business at University of Houston]: With respect to transportation fuels, the outlook is even more problematic. Battery technology has proved a major constraint on the ability to turn electricity (including electricity generated from renewable sources) into an efficient transportation fuel. Ethanol produced from food crops is an economic monstrosity that would require far more space than available here to spell out in proper detail. Ethanol produced from nonfood sources (e.g., non-celluosic ethanol) does not suffer from some of the worst aspects of ethanol derived from corn, say, but has proved stubbornly resistant to commercially economic production. The idea for producing ethanol from wood dates from 1898. It was commercially uneconomical then. It is commercially uneconomical now. It will remain commercially uneconomical for the foreseeable future. That said, it is a technology that has more attractions than the alternatives.

And again, the potential for natural gas as a transportation fuel, and the revolution in natural-gas production, undermine the economics of renewable motor fuels.


February 2016 Con

Carbon Taxes’ Flexibility Creates Distinct Harms One of the purported benefits of carbon taxes is flexibility—adjusting tax rates is seen as a plus from an enforcement and legislation point of view. However, it means the potential impacts of a carbon tax cannot be predicted, as they depend on fluid legislation. Because there is a finite limit to the amount of acceptable carbon that can be pumped into the atmosphere, there is a distinct harm to not knowing the extent to which reaching that limit is delayed. When the endgame is a known, the process to get there must be as well. For Con teams, the evidence demonstrates how this necessary paradigm breaks down under carbon taxation regimes.

Why climate certainty is important. DAT“Options and Considerations for a Federal Carbon Tax.” Center for Climate and Energy

Solutions [Successor to Pew Center on Global Climate Change]. February 2013.Web. 12 January 2016. http://www.c2es.org/publications/options-considerations- federal-carbon-tax

Emissions integrity or "certainty" is an important consideration for climate policy advocates. Climate models indicate that substantially different futures are possible depending on the path of future greenhouse gas concentrations. Scientists believe that surpassing critical concentration thresholds may trigger large-scale, irreversible changes in climate-sensitive systems that would have catastrophic effects on theplanet.2 These include extensive melting of the Greenland and West Antarctic ice sheets, breakdown of the thermohaline circulation (also known as the ocean conveyor belt), and abrupt changes in the Asianmonsoon.3 Although our ability to predict when these tipping points might be crossed (or if they have already been crossed) is currently limited, the chances of crossing potential tipping points rises with increases in greenhouse gas concentration.

Here, we establish the major premise of a syllogistic argument concerning greenhouse gas predictability. Essentially, Con teams are arguing that, contrary to the popular trope, it’s the journey and the destination.


February 2016 ConCarbon taxes create carbon uncertainty. DAT


A carbon tax, however, does not provide emissions certainty. Firms will reduce, or abate, their emissions up to the point where it is cheaper to pay the tax than to reduce emissions further. However, firms' abatement cost curves are not well known and will depend on characteristics specific to firms, including their fuel mix and their available abatement opportunities. As such, it is difficult for policy makers to know the level of reductions that will be achieved by a carbon tax. In addition, changes in conditions external to firms, such as fuel prices, weather patterns, and the development of new low-cost abatement technologies are unpredictable. It is also unclear how the overall economy will adjust to higher prices of energy and energy-intensive goods, which will feed back into the markets in which these firms operate. For all these reasons, the total amount of emissions abatement that will result from a particular carbon tax rate is uncertain at the time the tax is set. Achieving a long-run emission target may require periodic adjustments in the tax rate. As most proposals assume that the tax rate increases at a fixed but gradual rate over time, this would likely imply that changes would need to be made to the rate of growth— either increasing or decreasing how fast the tax increases over time. The extent to which tax rates may have to be adjusted would reduce the amount of compliance cost certainty a carbon tax could otherwise provide— detracting somewhat from one of the principal arguments in favor of a tax—compliance cost certainty.

The obvious Pro rebuttal here is of overall impacts: regardless of certainty, there is a positive impact of reduced emissions. However, the scope of this argument concerns opportunity cost: in being the most flexible option to reduce emissions, but not the only option, carbon taxes generate comparative harms through uncertainties.


February 2016 ConCarbon taxes will delay adaptation and mitigation, creating irreversible harms. DAT


Most greenhouse gases are a stock pollutants, meaning once emitted, they are very long-lived in the atmosphere and their build-up has consequences over the course of centuries. Ultimately, it is the stock, or concentration, of greenhouse gases that contributes to climate change and its attendant damages. Any given year's emissions will have a relatively small impact on the overall stock, which has been building up over the course of the industrial age. This affords a certain degree of flexibility in terms of the timing of emission reductions, provided that cumulative emission targets over time are attained and that critical greenhouse gas concentration thresholds are avoided.However, the longer implementation is delayed, the greater the aggregate costs will be in achieving a given stabilization target or the more likely it is that greenhouse gas concentrations will be higher with greater attendant damages.

A carbon tax allows firms to adjust their emissions according to current conditions, increasing emissions and paying more taxes when abatement costs are high (due to extreme weather patterns, for example) and reducing emissions when abatement costs are low (following the introduction of low carbon technologies or fuel sources, for example). This built-in flexibility of a tax helps firms to minimize their compliance costs over time.

The carbon tax encourages the exploitation of efficiencies as they are developed, which is a market-tested solution. The problem is that development of such solutions takes time. Unfortunately, this time does not exist, as the need for reduction is immediate (see first paragraph). Con teams should contrast the irreversibility of environmental damage with the temporal, reversible (less harmful) nature of economic inefficiencies (such as those that come from alternatives to carbon taxation, like cap-and-trade).

Pro Counters


February 2016 Pro Counters

Evading Carbon Taxes Is Very Difficult

Carbon taxes are some of the most efficient forms of taxation. ABHLiu, Antung. [Assistant Professor at the Cheung Kong Graduate School of Business in

Beijing] “Can Carbon Taxes Be Good for China and the United States.” The Paulson Institute. 2015. Web. Accessed January 2, 2016. (p.3)

First, carbon taxes are difficult to evade.5 Such taxes fall most heavily on energy, in particular crude oil, electricity, and gasoline. These energy sources must flow through centralized points of infrastructure such as pipelines or the electrical grid. At these points of infrastructure, prices are easy to monitor and taxes are easy to collect. In addition, the centralized nature of these infrastructure points mean that quantities bought and sold are known with a high level of precision—virtually all government agencies already track very closely how much energy is produced and consumed. For these reasons, tax evasion on energy is quite difficult, even in industrializing countries like China. Empirical evidence supports the idea that tax evasion on environmental taxes is much lower than evasion on other forms of tax. Sweden has for decades deployed carbon taxes and environmental taxes alongside other taxes. For each type of tax, Sweden has measured its “tax gap,” the difference between the revenue that is actually collected and the revenue that should be paid if all taxes were paid honestly. It has found that the tax gap for carbon taxes and environmental taxes is less than 1 percent, a rate far lower than taxes such as the sales tax or personal income tax (see Table 1). Even the value added tax, a revenue stream purported to have a low rate of evasion, has an evasion rate of 12 percent.

If CON argues that the tax will be useless because companies will avoid paying it, PRO should point out that empirically carbon taxes are paid (the Sweden example), and that logically the government would not have much difficulty monitoring emissions.



Carbon Taxes Are Better Than Cap And Trade

The volatility of energy prices makes taxes preferable to cap and trade. ABHGoulder, Lawrence [Professor at Stanford University] “Carbon Taxes Versus Cap and

Trade: A Critical Review.” Climate Change Economics. 2013. Web. Accessed January 4, 2016.

Emissions price volatility is not a problem for a carbon tax. Under that policy, the emissions price is the tax rate, and presumably the time-profile of tax rates imposed by policy makers involves relatively smooth changes rather than sudden jumps or ups and downs. But volatility is an issue for a cap-and-trade system, where the emissions price is the allowance price. Under cap and trade, the supply of allowances is perfectly inelastic. Hence shifts in demand can cause significant price changes – and irregular shifts in demand can produce price volatility. Nordhaus (2007) notes that demand for allowances is also likely to be highly inelastic in the short run, leading to even greater potential for high volatility. He argues that allowance trading programs’ price volatility represents a reason to favor carbon taxes over cap and trade.

When carbon taxes are implemented, entities pay the same tax rate no matter where the energy market stands. However, under cap and trade, the value of emitting a certain amount of carbon can vary drastically based on the energy market.

Carbon Taxes better recycle revenue than cap and trade. ABHGoulder, Lawrence [Professor at Stanford University] “Carbon Taxes Versus Cap and

Trade: A Critical Review.” Climate Change Economics. 2013. Web. Accessed January 4, 2016.

However, Metcalf (2007) suggests that in the U.S. it might be more difficult to achieve the revenue-recycling benefit under cap and trade than under a carbon tax. He points out that the revenues from a carbon tax would fall under the domain of the House Ways and Means Committee and Senate Finance Committee, and that coordination across these two tax committees has a long history; and he indicates, in contrast, that disbursement of revenues from auctioned allowances under a cap-and-trade system would likely involve not only these committees but also the House Energy and Commerce and Senate Energy and Natural Resources committees. Metcalf suggests that the latter committees might be predisposed toward using toward using the revenues to finance environmental projects and be less inclined toward recycling the revenues. Thus, to the extent that revenue-neutrality is considered a critical feature of climate policy, this can be seen as a potential disadvantage of a cap-and-trade program (and of a hybrid program as well) in the United States.

Based on where the revenues would go, there is a greater likelihood that revenues from a carbon tax would be recycled, and this is key for an environmental protection policy to be effective.


February 2016 Pro CountersA carbon tax would reduce the budget deficit. ABH

Parry, Ian. Williams, Roberton. [Ian is a senior fellow at Resources For the Future, and Roberton is a professor at the University of Maryland]. “Moving U.S. Climate Policy Forward.” Resources For the Future. 2011. Web. Accessed January 5, 2016.

The revenue or rent created by market-based climate policies is potentially problematic. Ideally, it should be used to substitute for distortionary taxes (or otherwise increase economic efficiency) so that we can be confident that economy-wide carbon policies improve welfare and are significantly more cost-effective than sectoral pricing policies or (smart) regulatory instruments. The best way to do this is to design a carbon tax as part of the broader fiscal system whose overall purpose is to meet a sequence of government revenue targets over time. In fact, a carbon tax of the scale examined here could not be more timely. It would simultaneously kickstart a serious program to ratchet back carbon emissions in the United States, and thereby remove a major impediment to wider global participation in mitigation efforts, while substantially reducing the nation’s projected budget deficit (and the need to raise other taxes) out to 2030. In principle, cap-and-trade systems can be designed to mimic any advantage of a carbon tax, most notably through full allowance auctions. However, even if all allowances were auctioned, legislators responsible for designing cap-and-trade systems may be reluctant to hand over the entire proceeds to the Treasury. Cap-and-trade systems that do not use the rents to cut distortionary taxes are best viewed as combining two policies: a price on carbon, plus an increase in (transfer or other) government spending financed through higher distortionary taxes. The latter component can greatly undermine the overall cost-effectiveness of the program for envisioned CO2 reductions over the medium term.Pricing policies or emissions standards focused on the power sector alone perform better than economy-wide cap- and-trade (without the revenuerecycling benefit), but they are distinctly more costly than carbon tax shifts.

Carbon taxes are preferable because they help resolve the budget deficit, while any revenue from cap and trade will not necessarily go towards offsetting the deficit.

Cap and trade has many administrative problems. ABHMetcalf, Gilbert. [Professor at Tufts University] “A Proposal for a U.S. Carbon Tax

Swap.” The Brookings Institution. 2007. Web. Accessed January 10, 2016.We have a time-tested administrative structure for collecting taxes. In contrast, we have no administrative structure for running an upstream carbon cap and-trade program. Firms that would be subject to a carbon tax are already registered with the IRS and have whole departments within their firms that carry out the record keeping and reporting for tax payments. We also have precedents for refundable credits for sequestration activities in federal fuels tax credits. A second complicating administrative issue with cap-and-trade programs arises from the need to allocate permits. If permit allocations are to be based on historical emissions, benchmarking is required. Third, if the European experience is relevant and a downstream system is implemented in the United States, the cap-and-trade system is that much more complex. It becomes more difficult to capture a significant fraction of carbon emissions in the economy. Moreover, many more firms must fall under the umbrella of the system unless many firms are exempted.

February 2016 Pro CountersAll the administrative systems required by a carbon tax already exist, but cap and trade would require the establishment of complicated bureaucratic administrative systems.

Cap and trade is logistically and economically unreliable. DATLevy, Phil. “The Carbon Tax/Cap-and-Trade Royal Rumble. Foreign Policy. 13

May 2009. Web. 11 January 2016. http://foreignpolicy.com/2009/05/13/the-carbon- taxcap-and-trade-royal-rumble/

First, there is a difference. Cap-and-trade can do a very good impersonation of a carbon tax when we know the demand for emissions with certainty, when we do a great job of regulating, and when we auction off all the emissions permits. If we’re uncertain about the demand for producing emissions, if it is hard to keep tabs on what various emitters are doing, or if politics intrudes into the process of handing out emissions permits, then the two approaches veer apart.

For ease of use and immunity from political meddling, the carbon tax is the clear winner. Taxes can be applied early in the fuel distribution process, which makes the logistical task much easier. That sort of upstream application would make attempts at political interference much more transparent, as well. So what about uncertainty? The big critique of a carbon tax is that it cannot guarantee a country will come in under a pre-set emissions cap. If the desire to pollute is really, really high one year, we could find that a given tax won’t serve as a sufficient deterrent, and we’ll blow past our limits.

Europe, though, has had the opposite problem with their cap-and-trade system. In the first phase of the program, they printed more permits to pollute than anyone wanted. That drove the price of permits near zero, deeply annoying anyone who had paid up for the right to pollute. It also meant that the system was ineffective in restraining pollution. That would be hard to do with a carbon tax.


February 2016 Pro CountersCap-and-trade has had negligible environmental impacts. DAT

Muro, Mark. “Carbon Tax Dreams: What About Cleantech Deployment?” Brookings Institution. 31 October 2012. Web. 11 January 2016. http://www.brookings.edu/research/opinions/2012/10/31-carbon-tax-muro

Ackerman argued a few years ago that getting the price right is necessary but far from sufficient to mitigate climate change and that direct public sector initiatives are required to disrupt path-dependencies and acceleratelearning. Acemoglu and others more recently demonstrated that the optimal carbon policy is not one-sided but involves both carbon taxes and direct research subsidies. They urge immediate action.

Turning to empirical evidence, Calel and Dechezleprêtre llooked at company patenting patterns under the EU emissions trading system (a cap-and-trade pricing scheme) and concluded that the system has had very little impact on low-carbon technology change. And then, earlier this year, a Swiss-German team found that the EU system has stimulated only limited adoption of low-emissions technology and that research, development, and deployment (RD&D) technology “push” measures induced more action. This group concluded that none of the first three phases of the trading system were “capable of triggering increased non-emitting technology adoption” and that “only renewable-technology pull policies had this effect.”

Here’s a more practical impact for Pro teams: the research (empirical data) has essentially concluded that any initiative to limit emissions must raise revenue to be plowed into research and development initiatives. The need for revenue generation is a big point for the Pro to reinforce throughout the debate.


February 2016 Pro CountersCap and trade is more flexible. DAT


Some have argued that one of the advantages of a carbon tax is the relative ease—compared to a cap-and-trade program—in which the program’s stringency could be modified.62 In contrast, they assert that policymakers would face difficulties if they sought to adjust an emissions cap after the program’s initiation.63 The rationale for this assertion is that covered sources that made or purchased emission allowances beyond those needed in a given year would lose some of the value of these allowances if Congress raised (i.e., loosened) the cap at a later time. Similarly, a covered source may make capital investments based on the assumption of a stringent cap. If policymakers subsequently loosened the cap, these covered sources would take longer to recoup their investments.64 However, this concern could also apply to a carbon tax. For example, energy producers and consumers may make investments based on an expected carbon tax. If the tax is subsequently altered, the value of such investments may change.

Check case studies of other countries. Some European cap-and-trade schemes have been beset by misevaluations, with too many credits disbursed and a subsequent devaluation (to zero) of emissions credits. A carbon tax evades this kind of economic rigidity.



Carbon Taxes Do Not Hurt The Economy The revenues from a carbon tax offset any potential economic harm. ABH

Metcalf, Gilbert. [Professor at Tufts University] “A Proposal for a U.S. Carbon Tax Swap.” The Brookings Institution. 2007. Web. Accessed January 10, 2016.

One objection to a carbon charge—whether through a tradable permit or a carbon tax—is that it will hurt economic growth in the United States. Research suggests, however, that most industry groups would not be appreciably affected by a carbon tax swap for two reasons. First, the price impacts for most industries are small (see Metcalf 2007a). Second, using carbon revenues to lower other taxes ensures that the overall burdens will not rise. Offsetting the higher price of products due to carbon pricing can occur through after-tax income or lower costs from the reduction in other taxes financed by the carbon charge.

Carbon taxes will not hurt the economy because any economic damage is fairly small to begin with, and that damage is made up for by the increased tax revenues.

Carbon taxes are economically sound regardless of implementation. DAT“Do Economists All Favour a Carbon Tax?” The Economist. 19 September 2011. Web. 11

January 2016. http://www.economist.com/blogs/freeexchange/2011/09/climate-policyWhat if a carbon price doesn't immediately drive emission reductions? Then the tax will be an effective revenue raiser, much more efficient than a tax on income. Either way you win. The worry about carbon leakage is a real one, but this dynamic also implies that each new country that prices carbon increases the benefit of existing carbon-price policies in other countries.

Substitution in the transport sector is somewhat problematic, but a viable carbon price would not have much effect on petrol costs at the outset. A carbon tax of $30 per tonne of CO2 would only increase petrol costs by about 9 cents per gallon. This is dwarfed by moves in the market price of petrol. The vulnerability of the American economy to oil shocks argues for an increased tax on petrol, but that's a different policy debate. Mr Cowen seems to ignore the fact that oil is just one small part of the American economy's fossil-fuel use.

A carbon tax would attract rent-seeking, but arguably less than alternative policies, like subsidies or a cap-and-trade system. Importantly, money spent on adaptation or post hoc climate-disaster relief is also subject to rent-seeking and corruption issues. Given that many poor countries with weak institutions are likely to feel the brunt of the impact of global warming first and are likely to be poor spenders of the aid money that will invariably flow, a carbon tax looks like one of the policy solutions best suited to the minimisation of these ills.

This by no means paints carbon taxes as the perfect solution. But when it comes to debating a resolution, perfection doesn’t matter if the option presented is the best one available.

February 2016 Pro CountersTaxing carbon is a market correction, not an intrusion. DAT


The economic rationale for creating a price on greenhouse gas emissions is multifold. First, it would correct an underlying market failure that has led to increasing concentrations of greenhouse gases in the atmosphere. The burning of fossil fuels and other activities that release greenhouse gases are associated with warming global temperatures and adverse climate impacts. The costs of these impacts, including an increase in extreme and damaging weather events, rising sea levels, loss of biodiversity and other effects, will be borne by society as a whole, including future generations. However, these costs are not currently included in the market prices of goods that emit greenhouse gases, leading to an inefficient use of resources and excessive emissions from a societal perspective (see Box 1 for a discussion). A carbon tax would attempt to include these costs in market prices.

Second, use of a market-based policy instrument can achieve greenhouse gas emission reductions at lower cost to regulated sectors than a command-and-control approach, which emphasizes source- and sector- based mandates for particular technologies or processes. As technologies that reduce CO2 emissions during or post-combustion are not yet widely available, the primary way to reduce CO2 emissions is to switch to fuel sources with lower carbon content or reduce consumption of fossil fuels. Use of a market-based policy to establish a common price on greenhouse gas emissions is necessary to provide incentives for a broad range of emission reduction options across firms, households, and activities. Some emission reductions will be achieved by firms as they switch from higher- to lower-carbon fuels and invest in energy-saving technologies. Other reductions will come from consumers, who will respond to higher energy prices by purchasing less energy-intensive goods and changing their behavior in ways that use energy more efficiently.

If we assume that the status quo (continuing emissions) entails net economic harms, the argument that carbon taxes are economically harmful is not, in itself, a Con point. By showing carbon taxes to be lower- cost than alternatives (including inaction), but not necessarily cost-free, the Pro still wins handily on balance.


February 2016 Pro CountersManufacturing is not hurt by carbon taxes. ABH

Martin, Ralf [Assistant professor at The Imperial College Business School in London] “The Impact of a Carbon Tax on Manufacturing: Evidence from Microdata.” Journal of Public Economics. 2014. Web. Accessed January 14, 2016.

We find robust evidence that the price incentive provided by the CCL led to larger reductions in energy intensity and electricity use than the energy efficiency or consumption targets agreed under the CCA. The tax discount granted to CCA plants has been justified as a means of preventing energy intensive firms from losing competitiveness in international product markets due to the unilateral implementation of the tax and to the lack of international harmonization. Although this has been widely argued, we find no discernible impact on employment, gross output or productivity across groups, and we cannot reject the hypothesis that the CCL had no impact on plant exit. Our results show that the introduction of a moderate tax on energy encourages electricity conservation and helps to reduce energy intensity in the manufacturing sector. This is in contrast to previous research that attributed substantial carbon savings to the CCA scheme on the basis of comparisons with counterfactual baseline emissions (Ekins and Etheridge, 2006; Barker et al., 2007; AEAT, 2004).46 While our research design arguably produces a more credible estimate of the effect of the CCL, it is clear that this effect is additional to any effect the CCA targets may have had on firm behavior

This study focused on the United Kingdom found that taxing carbon did not harm employment within the manufacturing sector.



Carbon Taxes Are Not Necessarily RegressiveCarbon taxes are not wholly regressive. DAT


Distributional concerns over carbon taxes stem from the observation that low-income households devote a higher proportion of their income to consumption and will thus bear a higher burden of the tax relative to high-income households. The distributional effects of carbon taxation have been well-studied (Bull, Hassett, and Metcalf 1994, Hassett, Mathur, and Metcalf 2009, Metcalf 1999, Metcalf 2007). The regressivity finding is consistent across studies, but varies in magnitude. Metcalf (2008) analyzes the distributional effects of a carbon tax and finds that it would reduce the after-tax income of taxpayers in the first decile by 3.7 percent, compared to just an 0.8 percent reduction for the wealthiest decile. Findings are dependent on whether incidence is measured on a current income versus lifetime basis, with the tax being more regressive when measured on a current income basis relative to lifetime income basis. For example, Hassett, Mathur, and Metcalf (2009) find that the indirect component of a carbon tax (i.e., higher prices due to higher costs of production) is significantly more progressive, whereas the direct component, which focuses on the changes in the cost of gas and electricity, is regressive. Lastly, the incidence varies with timing: the carbon tax can either fall forward in the form of higher consumer prices or backwards in the form of lower returns to factor inputs. Bovenberg and Goulder (2001) and Paltsev et al. (2007) find that the short- and medium-term incidence falls primarily on consumer prices.

While this point is still generally towards the Con, Pro teams’ understanding of carbon taxes’ components should give their evidence more weight in this arena. See the next card for the kicker.


February 2016 Pro CountersAn advocacy for making regressive policies progressive. DAT


Importantly, the regressive impact of a carbon tax could be offset in any of a number of ways, similar to offsets for distributional effects of the VAT, as will be discussed in the next section. Most prominent among these options would be refundable income tax credits (Dinan 2012) or payroll tax refunds (Metcalf 2007). Dinan (2012) notes that CBO analysis suggests that fully offsetting the effects of carbon taxes for households in the lowest quintile would require about 12 percent of gross revenues, while fully offsetting the effects for households in the second quintile would require 27 percent of gross revenues. These figures do not account for added government costs (of indexing transfers or higher payments for inputs, for example). Nor do they account for the reduction revenues from other taxes noted above. As a rough approximation, for now we assume that 38 percent of net carbon tax revenues would have to be used for offset purposes. This is not inconsistent with Dinan’s estimates and is similar to the calculations derived by Toder and Rosenberg (2010) for a VAT. Thus, while the regressivity of a carbon tax is clearly a concern, it should not be considered an obstacle to the implementation of carbon taxes.

Even with tax revenue returned to consumers to offset its regressive effects entirely, with administrative factors included, nearly 2/3 of the revenue still represents “profit” for the government. That’s a powerful stat to pull out against the regressive taxation argument.



A Carbon Tax Won’t Hurt International CompetivenessOther countries won’t implement a carbon tax unless the U.S. does. ABH

Metcalf, Gilbert. [Professor at Tufts University] “A Proposal for a U.S. Carbon Tax Swap.” The Brookings Institution. 2007. Web. Accessed January 10, 2016.

One question frequently raised is why the United States should implement a carbon policy before China, India, and other developing countries have done so. In part this reflects trade concerns, and in part it reflects the reality that China and India are large and growing emitters of GHGs. The answer to this question is more political than economic, but a simple and pragmatic response is that these two countries, along with other developing countries, are unlikely to opt into a scheme to control GHG emissions unless the United States makes a serious commitment to reduce its emissions. In that regard, the United States must act to some extent on faith in the hope that our participation can serve—along with multilateral persuasion—to induce developing countries to participate in a global architecture to reduce emissions.56 It is important to emphasize that the concern over developing country participation in a global warming framework exists whether the United States engages in a cap-and-trade system or a carbon tax system. One important difference must be emphasized. As was evident in the discussions surrounding the Kyoto Protocol agreement, a global cap-and trade system is an implicit trade agreement with the potential for large transfers from developed to developing countries. Unlike a global cap- and-trade system, a carbon tax–based international agreement would disentangle a carbon policy from a NorthSouth transfer policy. All carbon taxes would be raised and retained within individual countries.

While a carbon tax might hurt international competitiveness in the short run, it would be an important step towards encouraging other nations to follow suit with carbon reduction polices of their own.


February 2016 Pro CountersLower U.S. emissions won’t be set back by increases abroad. DAT


Another potential outcome of disparate global energy policies is called price-based emissions leakage. In theory, other countries’ emissions could increase if the United States and other large economies adopt serious efforts to reduce their fossil energy consumption. As U.S. fuel demand shifts back, globally traded fuel prices could fall, and other countries’ fuel consumption could increase.

Empirically, what do we know about the significance of leakage and competitiveness problems? It depends on a host of assumptions about U.S. policy and policies abroad, but some evidence suggests leakage from a carbon tax would be quite small. For example, McKibbin et al. (2012b) estimate the effects of a unilateral U.S. carbon tax that begins at $23 per ton of carbon dioxide (CO2 ) in 2012 and rises at 4 percent over inflation to $46 in 2030. Using a general equilibrium model of the global economy, they find no evidence of energy-related emissions leakage, in part because they find that the price of oil in other currencies does not fall, despite significant reductions in oil consumption by the United States.

Combined with the idea that domestic action can inspire international changes, there is little likelihood that a carbon tax in the United States will exist in isolation.


February 2016 Pro CountersThe economic impacts on global competitiveness are small. DAT


Aldy and Pizer (2009) review the literature on the effect of unilateral climate policy on manufacturing industries. They show that European industries, in particular lime, cement, iron, and steel, could experience an increase in production costs of about 20 percent for a price on CO2 of about 20 Euros. Aldy and Pizer (2009) estimate the effects of a (unilateral) $15 per ton price on CO2 on U.S. manufacturing industries. Their work sought to isolate the competitiveness effect of the policy from its broader effects on industry generally through declines in consumption. They found that overall, U.S. production shifted abroad by about 0.7 percent as a result of the policy.Looking specifically at EITEs, they found that industries with energy costs that exceed 10 percent of shipment value (e.g., metal foundries, cement, and lime) would expect at most a 1 percent shift in production overseas. The largest effect was in industrial chemicals, with a competitiveness-induced decline in production of 0.9 percent. The conclusion of this is that trade effects of a modest carbon price are likely to be small overall, but they could be important for industries with particularly emissions-intensive production technologies and strong foreign competition.

An EITE is an energy-intensive, trade-exposed industry. Essentially, the most vulnerable industries would see small shifts to production abroad as a result of a carbon tax. While this point goes against the Pro, it’s a small enough difference that this card serves as an acknowledgement of the costs in the cost- benefit scenario, rather than a benefit for the Con in its own right.

February 2016 Pro CountersClimate change itself is regressive. LWZ

Deaton, Jeremy [News associate that writes about the science, policy and politics of climate and energy for Nexus Media]. "Climate Change Is Regressive. A Carbon Tax Doesn’t Have To Be." ThinkProgress RSS. Think Progress, 13 Oct. 2015. Web. 11 Jan. 2016. <http://thinkprogress.org/climate/2015/10/13/3711222/carbon-tax- fairness/>.

Climate change is innately regressive. The wealthiest Americans contribute the most to carbon pollution, and yet the poor suffer the brunt of the impacts. Low-income families are more likely to live near crowded highways and dirty power plants, and they are also the least equipped to deal with loss and damage from severe weather or shocks to the food system. This is a market distortion: the costs of pollution are not borne entirely by the polluters. Thus, while a gallon of gas may cost $2.45 at the pump, the price jumps to $6.25 when factoring in health and environmental damages, according to a recent study from Duke University. Who pays the extra$3.80? We all do, but the very poor bear a disproportionate share of the burden. Lawmakers could remedy this injustice by forcing the price of fossil fuels to tell the truth about their actual cost. That means accounting for the social cost of carbon. Among economists and a small but growing number of conservatives, a carbon tax stands as the carbon-pricing policy par excellence: simple, elegant, and absent the hard limits on pollution that Republicans tend to resist. The dilemma is that, depending on how it’s crafted, a carbon tax could actually make economic inequality worse.

A carbon tax doesn’t have to be regressive. LWZDeaton, Jeremy [News associate that writes about the science, policy and politics of

climate and energy for Nexus Media]. "Climate Change Is Regressive. A Carbon Tax Doesn’t Have To Be." ThinkProgress RSS. Think Progress, 13 Oct. 2015. Web. 11 Jan. 2016. <http://thinkprogress.org/climate/2015/10/13/3711222/carbon-tax- fairness/>.

A carbon tax can be regressive, but it doesn’t have to be The beauty of a carbon tax is that it discourages high- carbon behavior. If the cost of gasoline goes up, consumers are more likely to purchase a fuel-efficient vehicle. If the cost of electricity goes up, homeowners are more likely to put up solar panels or conserve energy.However, because we need energy to produce everything from TVs to hamburger buns, the increased cost of production will drive up the price of consumer goods or suppress wages. Either way, low-income families, who already spend a larger proportion of their income on transportation, groceries and utility bills, will be hit the hardest. That’s not to say a carbon tax couldn’t be made to work for struggling families. With a revenue-neutral carbon tax, the federal government would return the proceeds to the taxpayers, and how lawmakers go about recycling the proceeds could make the difference between narrowing and widening the wealth gap. At an event sponsored by Resources for the Future, an environmental think tank, Dr. Roberton Williams said “The carbon tax by itself is regressive, but what you do with revenue is much more important. So, we can easily take a regressive policy and turn it progressive by how we use the revenue.”

February 2016 Pro CountersA cut on the corporate tax would hurt low-income households but it doesn’t have to be that

way. LWZDeaton, Jeremy [News associate that writes about the science, policy and politics of


Cutting the corporate tax would be efficient, but it would hurt low-income households One way to return carbon tax revenue would be to cut the corporate income tax (“capital recycling”). Because a corporate income tax can discourage business investment, returning revenue to corporations could provide a powerful stimulus to the economy, more than other kinds of tax cuts. Unfortunately, most of the gains would go to the wealthiest Americans. Said Williams, “The case that is the best for the economy as a whole, capital tax recycling, is the worst for the middle class.” Think of it this way: If Bill Gates walks into a football stadium, every person in the stadium may be a million dollars richer on average, but that doesn’t translate into real wealth for anyone except for a single billionaire. The point is, distribution matters. Cutting the the payroll tax (“labor recycling”) would be more equitable than cutting the corporate income tax, but even in this scenario the poorest Americans would be worse off than they would without a carbon tax. Writing in Resources magazine, Chad Stone, Chief Economist at the Center on Budget and Policy Priorities, notes, “A carbon tax should not make poor families poorer or push more people into poverty. Climate rebates should be designed to fully offset the impact of a carbon tax on the purchasing power of low- and moderate-income households.”

A lump sum rebate would prevent the carbon tax from being regressive. LWZDeaton, Jeremy [News associate that writes about the science, policy and politics of


A lump-sum rebate is less efficient, but low- and middle-income families would be better off So, what is a fairer way to return revenue from a carbon tax? Take the total accumulated revenue, divide it into 310 million equal shares, and mail a check to every American. This is what’s commonly known as “fee and dividend.” Said Williams, “The lump sum rebate — that just does an enormous amount for the bottom end. Again, because that flat dollar amount is a much bigger percentage amount for poorer people than it is for wealthy people.” The lump-sum rebate turns the Bill Gates-football stadium analogy on its head. With a rebate, the average wealth of stadium goers decreases, but most of the losses come from the pockets of a singular tech tycoon. This graph shows the net effect on income of a revenue-neutral carbon tax of $30 per ton of CO2. As you can see, thelump-sum rebate is the only scenario in which those who have contributed the least to carbon pollution — low- and middle-income Americans — are actually better off. Because the wealthiest Americans bear more of the

February 2016 Pro Counterseconomic brunt, a rebate would have a redistributive effect, simultaneously delivering blows to carbon pollution and economic inequality.

A carbon tax isn’t necessarily regressive. LWZDeaton, Jeremy [News associate that writes about the science, policy and politics of


Crafting fair and effective climate policy is hard, but even imperfect policy will help struggling families Here’s the bottom line: a carbon tax can be regressive, but it doesn’t have to be. It all depends on how badly the policy is mangled (or not) by the policymakers. As David Roberts points out, a carbon tax could be rendered unfair and ineffective in myriad ways, but no climate policy is without its pitfalls. Any attempt to deal with the climate crisis can be easily corrupted by incompetent policymakers and corporate interests. A carbon tax is just one possible (and possibly treacherous) path to a low-carbon future. But, because climate change is itself regressive, any effort to deal with carbon pollution, however imperfectly, will prove vital to protecting the poorest and most vulnerable among us.

The alternative is even more regressive. LWZJerry Taylor [president of the Niskanen Center]. The Conservative Case for a Carbon


Some conservatives have argued against carbon taxes because they will impact the poor more than the rich and are thus highly regressive. While possibly true (if overstated78), this will depend on policy design.79 Some of the revenues from a carbon tax could be used to compensate the poorest households for income losses associated with the tax, blunting the damage.80 Regardless, this complaint ignores the fact that command-and- control regulation—the main political alternative to carbon taxes—is also highly regressive.



AT: Leakage

The leakage argument has little weight. LWZJerry Taylor [president of the Niskanen Center]. The Conservative Case for a Carbon


While this is to some extent true, the “emissions leakage” rationale for doing nothing is overstated. Adoption of the Kyoto Protocol in Europe has likely failed to capture 5-20 percent of the emissions from 1995-2005,69 a finding that adds weight to a recent analysis finding that a $50 carbon tax applied to select sectors of the U.S. economy would fail to capture about 14 percent of emissions due to leakage.70 That same study found that a broad-based carbon tax imposed on all sectors of the U.S. economy would produce a leakage rate of only about 9 percent.71 Even so, leakage caused by a global carbon tax can be addressed. Some of the revenue from a domestic carbon tax could be rebated to domestic industries most heavily impacted by leakage. Charges could be imposed on imported goods the equivalent of what they would have had to pay had the imported goods been produced in the United States.72

US action will spur other nations to adopt anti-warming measures. LWZJerry Taylor [president of the Niskanen Center]. The Conservative Case for a Carbon


The larger observation that unilateral U.S. action will have little effect on future global temperatures underscores the fact that the long, steady buildup of greenhouse gases in the atmosphere over the past century has rendered modest emissions constraint of little value. No one denies that global (as opposed to national or regional) action offers the best hope to reverse warming trends because it would control more of the emissions at issue. U.S. action is a necessary if insufficient condition for an effective global response. While it is unclear to what extent U.S. leadership might encourage other nations to act, there are good reasons to believe that developing nations would be more likely to sign a global carbon tax agreement than a global cap-and-trade agreement, the main goal of international negotiations up until now. Last year, 74 countries and 23 subnational jurisdictions—which together represent 54 percent of total global greenhouse gas emissions—along with over 1,000 companies and investors, expressed support for a carbon tax at the UN Secretary-General’s Climate Summit.73 While agreeing to a national cap on emissions is to agree on a national cap on industrial activity (something developing nations are understandably reluctant to do), a carbon tax is far more attractive. As Harvard economist Greg Mankiw observes: All governments require revenue for public purposes. The world’s nations could agree to use a carbon tax as one instrument to raise some of that revenue. No money needs to


February 2016 Pro Counterschange hands across national borders. Each government could keep the revenue from its tax and use it to finance spending or whatever form of tax relief it considered best. 74

Independently, it will produce nonclimate benefits. LWZJerry Taylor [president of the Niskanen Center]. The Conservative Case for a Carbon


Even if a U.S. carbon tax fails to promote global action, it will nonetheless produce nonclimate benefits. A recent study by the International Monetary Fund, for instance, finds that a $30 per ton carbon tax would produce$37 worth of non-climate benefits from reductions in conventional pollutants and, by increasing the cost of driving, from reductions in road congestion, vehicle accident risk, and road maintenance costs.75 A carbon tax with co-benefits paired with a wealth-creating tax cut could very well be welfare enhancing even if the climate benefits are zero

We are ethically obligated to adopt a carbon tax. LWZJerry Taylor [president of the Niskanen Center]. The Conservative Case for a Carbon


Perhaps the strongest argument for unilateral action—even in lieu of a global commitment—is that ethical considerations demand it. Simply put, one should not harm others, one should not damage the property of others, and one should leave enough for others when taking from common resources. It does not matter if others have imposed the same harm and not been held to account, that others will continue to impose identical harms without being held to account, that the one who harms gains more than is lost by the one who is harmed, or that the harmed party has imposed similar harms on others without being held to account.76

The US is already acting unilaterally anyways. LWZJerry Taylor [president of the Niskanen Center]. The Conservative Case for a Carbon


Regardless, a carbon tax does not introduce this issue to the climate policy debate. The United States is already acting unilaterally to reduce greenhouse gas emissions outside of a global agreement. Our political commitment to unilateral action, as noted above, appears to be irrevocable. If the United States is going to act unilaterally, better that it do so at the least cost possible.



AT: Increases Government Carbon taxes will not increase the size of the government. LWZ


Many conservatives resist carbon taxes because they believe that increases in federal revenues will increase the size of government. But virtually every proposed carbon tax put on the political table includes offsetting tax cuts to ensure revenue neutrality. Revenue neutral carbon taxes will not increase the size of the federal treasury.

It would actually decrease the size of the government. LWZJerry Taylor [president of the Niskanen Center]. The Conservative Case for a Carbon


Regardless, this concern suffers from a misunderstanding of what constitutes “the size of government.” The true definition of government’s size is not how many dollars the treasury extracts from the economy. It is best measured by how many resources are reallocated as a consequence of government.77 To the extent that carbon taxes are more efficient than command-and-control regulation at achieving the aims of greenhouse gas emission constraint, a carbon tax would serve to decrease the size of government relative to the status quo.

This would be a justified instance of government growth. LWZJerry Taylor [president of the Niskanen Center]. The Conservative Case for a Carbon


Even were that not the case, however, conservatives believe that one of the primary obligations of government is to protect private property from unwanted trespass or harm. If government must “grow” to accomplish that end, so be it.



AT: Mitigation Suboptimal A carbon tax still requires those who pollute to pay. LWZ


The argument that adaption (e.g., the building of sea walls to protect coastal cities from flooding) may be the least-cost response to certain aspects of climate change is not particularly controversial.85 The costs associated with adaptation, however, should be born by those who are forcing the adaptation to occur (greenhouse gas emitters).86 Although it is difficult to know what those costs might be, estimates for the United States range from tens to hundreds of billions of dollars per year by the middle of this century.87 A carbon tax provides a mechanism by which greenhouse gas emitters are required to pay for the costs they impose on others. Even so, as economist Edwin Dolan points out, “the true liberal position would insist that the actual consent of the harmed parties be secured, rather than the adaptation versus mitigation decision be made elsewhere and imposed on victims.”88 The strong public support for greenhouse gas regulation (70 percent of registered voters in one recent poll89) suggests that “the actual consent of the harmed parties” is a long way from being secured.

Adaptation will be inadequate. LWZJerry Taylor [president of the Niskanen Center]. The Conservative Case for a Carbon


The bigger problem with adaptation, however, is that it will be inadequate to the task of responding to low- probability, high-impact catastrophe scenarios.90 Those nondiversifiable risks are at the heart of the case for a public policy response to climate change. Geo-engineering might also be profitably deployed in the future.91 Unfortunately, a recent two-volume report from the National Academy of Sciences finds that the technologies at issue are too immature to confidently say much about the costs, risks, and effectiveness of such undertakings.92 While promising geo-engineering technologies might evolve, then again, they might not. In the face of such uncertainty, hanging one’s hat on geo-engineering is to hang one’s hat on a hope and a prayer.



AT: Pretense of Knowledge This argument is a slippery slope. LWZ


Some conservatives take a page from Austrian economics and argue that the entire enterprise of carbon taxation is hopelessly crippled by what F.A. Hayek called the knowledge problem. Even if there are environmental externalities associated with greenhouse gas emissions, they cannot be satisfactorily quantified. There are also positive externalities associated with fossil fuel use, and they, too, cannot be satisfactorily quantified.Government interventions have unintended economic consequences, and they, too, cannot be quantified. Most important, economists cannot identify the perfectly competitive general equilibrium “end state” that is required for us to know what constitutes “economic efficiency” in the first place. The entire enterprise, conservatives argue, is so muddled with analytic uncertainty that we cannot hope to learn what the “optimal” level of climate stability might be. Accordingly, any government intervention to address greenhouse gas emissions will likely do more harm than good. Only by pure chance will analytically blinded economists improve economic efficiency.93 Most economists reject this line of argument, primarily because it overstates the knowledge problem.94 That aside, the logical implication of embracing this argument is that the government has no business providing public goods or regulations to protect human health or the environment at all. 95 Do conservatives really mean to argue that case? Or, as I suspect, are they merely being selective in their tolerance of analytic uncertainty in the policy process? This is an argument that conservatives would likely shy away from making in other contexts, so why are they making it here?



AT: Government Manipulation Empirics show that government manipulation is overstated. LWZ


Economist Tom Tietenberg of Colby College examined the literature pertaining to the 15 major pollution tax and fee programs instituted worldwide and found that while concerns about the translating economic theory into political practice are not baseless, they are overstated.97 “The cost savings from moving to these market-based measures are considerable, but less than would have been achieved if the final outcome were fully cost- effective. In other words while both taxes and emissions trading are fully costeffective in principle, in practice they fall somewhat short of that ideal in part because actual designs, fashioned in the crucible of politics, deviate from the dictates of optimality.”98 Harvard economist Robert Stavins’ review of the literature tracks Tietenberg’s. “The performance to date of market-based instruments for environmental protection provides valuable evidence for environmentalists and others that marketbased instruments can achieve major cost savings while accomplishing their environmental objectives.”99

Regulation is a worse. LWZJerry Taylor [president of the Niskanen Center]. The Conservative Case for a Carbon


Conservatives fear that carbon taxes will prove irresistible to politicians in search of revenue and that they will rise far beyond what is merited by the science. But conservatives have less reason to fear runaway taxation than they have to fear runaway regulation. It is more difficult to increase taxes than to increase regulation because the former imposes politically visible costs while the latter imposes politically invisible costs. Public opposition to tax increases—and corresponding support for increased regulation—is well known.


February 2016 Pro CountersRent seeking isn’t an issue if a carbon tax is done properly. LWZ


Conservatives are right to fear that special interests will attempt to carve out exemptions to the tax. But those rent-seeking operations could be frustrated to a large extent if the carbon tax were imposed at the point of production. It would be quite difficult for political actors to provide exemptions to favored consumers from taxes already paid upstream.

The slippery slope objection doesn’t make much sense. LWZJerry Taylor [president of the Niskanen Center]. The Conservative Case for a Carbon


Although slippery slope concerns should be taken seriously, they are not compelling in this case. UCLA law professor Eugene Volokh offers three criteria for determining when one might be on the sort of slippery slope envisioned here.101 He finds that the slope will be most slippery when: • People think that they lack enough information to independently assess an issue; • People don’t already feel strongly about the topic; and • People take a pragmatic rather than ideological stance on the matter. None of those characteristics describe congressional opponents of carbon taxes (or other consumption taxes). Nor do they describe the climate skeptics in the conservative movement. But those are the two groups that conservatives worry about losing in the advent of a failed attempt at policy reform. As long as anti-tax conservatives can rally a filibuster in the Senate, there is little chance that this nightmare scenario will come to pass. It is hard to imagine such a total collapse in the conservative position from a failed carbon tax deal. If the slippery slope argument employed by conservatives is taken at face value, any effort at finding compromise—in any policy arena—risks undermining the conservative position. This road, however, leads to legislative paralysis. Any attempt to pass legislation requires some degree of compromise with the opposition, and compromises demand concessions. There will never be enough conservative votes to steamroll the opposition.


February 2016 Pro CountersLibertarians should be in favor of a carbon tax. LWZ


Many conservatives who labor in the environmental arena ground their thinking in libertarian philosophy. Libertarians maintain that pollution is best thought of as a trespass on private property or as a nuisance.Government, they say, has a responsibility to either enjoin that trespass or, at the very least, redress the injuries associated with pollution in order to protect the person and property of others.102 While libertarians have a preference for resolving trespass or nuisance claims in courts of law rather than in regulatory or political bodies, they do not, in principle, have any objection to government action to restrain polluters from harming third parties. In fact, a respect for private property demands it.103 As noted by one of the founding fathers of modern libertarianism, Murray Rothbard, conservatives too often “deny that the [air pollution] problem exists, and attribute the entire agitation to leftists who want to destroy capitalism and technology on behalf of a tribal form of socialism.” He continues: While part of this charge may be correct, denial of the very existence of the problem is to deny science itself and to give a vital hostage to the leftist charge that defenders of capitalism “place property rights above human rights.” Moreover, a defense of air pollution does not even defend property rights; on the contrary it puts these conservatives’ stamp of approval on those industrialists who are trampling upon the property rights of the mass of citizenry. 104 F.A. Hayek makes the same point: Personally, I find that the most objectionable feature of the conservative attitude is its propensity to reject well-substantiated new knowledge because it dislikes some of the consequences which seem to follow from it—or, to put it bluntly, its obscurantism. I will not deny that scientists as much as others are given to fads and fashions and that we have much reason to be cautious in accepting the conclusions that they draw from their latest theories. But the reasons for our reluctance must themselves be rational and must be kept separate from our regret that the new theories upset our cherished beliefs.… By refusing to face the facts, the conservative only weakens his own position. Frequently the conclusions which rationalist presumption draws from new scientific insights do not at all follow from them. But only by actively taking part in the elaboration of the consequences of new discoveries do we learn whether or not they fit into our world picture and, if so, how. Should our moral beliefs really prove to be dependent on factual assumptions shown to be incorrect, it would hardly be moral to defend them by refusing to acknowledge facts.105 Rothbard’s and Hayek’s charge that some segments of the Right are prone to deny science because they don’t like the messenger (environmentalists) or the message (producers must be constrained) rings true in the climate debate.

Con Counters


February 2016 Con Counters

Unilateral Action Fails A carbon tax is useless if China and India don’t implement one as well. ABH

Furchtgott-Roth, Diana. [Senior fellow at the Manhattan Institute for Policy Research] “The Pros and Cons of Carbon Taxes.” The Manhattan Institute for Policy Research. 2011. Web. Accessed January 10, 2016.

That brings up the major disadvantage of any schemes to reduce carbon, whether through industrial policy, cap and trade, or a carbon tax. Even assuming that carbon emissions contribute to global warming — and skepticism exists about that linkage — America’s reductions in carbon usage will not meaningfully help climate change unless other countries also limit their emissions. Currently, other large emitters, specifically China and India, have no plans to sign on to any reduction scheme, either tax or regulatory. So the United States would be imposing a cost on the economy with practically no benefit to climate change

Implementing a carbon tax in the U.S. would hurt the economy, as the U.S. would be at a disadvantage to China and India, but would not help stop global climate change, as China and India would pollute at an increased rate.



Carbon Taxes Can’t—And Shouldn’t—Be Global This argument presents the flip side of the previous section—that in adopting carbon taxes, the United States cannot do so in a way that leaves them on equal footing with the rest of the world, and cannot set a precedent for global action as a result.

A global carbon tax is bad economic and environmental policy. DATFay, Marianne and Stephane Hallegatte [World Bank economists. “Thinking Beyond a

Global Carbon Price.” The Economist. 24 June 2015. Web. 11 January 2015. http://www.economist.com/blogs/freeexchange/2015/06/decarbonising-development

Today, more than 40 national and 20 subnational jurisdictions, in both developed and developing countries, have put a price on carbon or are in the process of doing so. They do so to mitigate climate change, but also to raise revenue and reduce budget deficits, or to reduce fossil fuel use and its consequences on health, congestion, and energy imports. Carbon prices range from less than $1 per ton in Mexico to more than $100 per ton in Sweden. Asking for a global carbon price could easily play against the current momentum where many countries implement pricing options that are tailored to their political and institutional context. Once countries have carbon pricing instruments, it is also always possible to make taxes converge or to link carbon markets.

And finally, one should not forget that while carbon pricing is an efficient instrument to address the market failure that unpriced carbon represents, multiple market failures and distortions are responsible for climate change and must be addressed if we are to decarbonise the world economy. Complementary measures are thus vital to make prices more effective and politically acceptable.

The implication, naturally, is that Pro arguments attempting to downplay the inevitable global asymmetry of the United States applying a carbon tax ignores the functional reality of such legislation across the world.


February 2016 Con CountersCarbon taxation is regressive on an international level. DAT

Aldy, Joseph et al. “What is the Role of Carbon Taxes in Climate Change Mitigation?” The World Bank. April 2010. Web. 12 January 2016. http://www1.worldbank.org/prem/PREMNotes/Note2_role_carbon_taxes.pdf

Pursuing a purely efficient and cost-effective carbon tax policy may not necessarily be the most equitable approach to international climate policy. The extra stock of carbon in the atmosphere that may be responsible for anthropogenic climate change is the counterpart to past economic development activities of today’s richer nations. In this context, imposing the same carbon tax rate on the consumption of energy in countries substantial differences in per capita incomes may be viewed as regressive and unfair. The equitable approach to emission targets in the Kyoto Protocol suggests a fairly progressive assignment of stringency by incomes among industrialized countries. A carbon tax, by design, does not create endowments (like emission permits) that can be allocated to lower-income countries as a means of compensation. At the risk of undermining cost- effectiveness in the near term, a system of graduation could be employed in which only countries that have cleared a specified income threshold would be expected to implement a carbon tax.

Con teams can use advocacies to counter the regressive taxation point on a domestic level. The inherent anarchy to international governance precludes Pro rebuttals from having international scope, but the regressive nature of a carbon tax is still necessarily present as a global phenomenon. For Con teams arguing the endgame—reduction of emissions worldwide—the scalability of carbon taxation is a point worth exploring.



Carbon Taxes Are Not Simple or Transparent

Carbon taxes carry the same complexities and implementation problems as caps. DATRamseur, Jonathan [Environmental Policy Analyst] and Larry Parker. “Carbon Tax

and Greenhouse Gas Control: Options and Considerations for Congress.” Congressional Research Service. 10 March 2009. Web. 12 January 2016. https://www.fas.org/sgp/crs/misc/R40242.pdf

Although the concept of a carbon tax is arguably a simpler approach, many argue that the U.S. tax code is complex. Congress could establish a carbon tax framework that rivals the complexity of a cap-and-trade program. For instance, a carbon tax that only applies to CO2 emissions from fossil fuel combustion may be more transparent than a carbon tax that address non-CO2 GHG emissions. Moreover, policymakers could provide subsidies or exemptions to the fossil fuel industry that would run counter to a carbon tax. In addition, policymakers could allow for tax credits for carbon sequestration projects, similar to carbon offsets in a cap-and-trade regime. As with carbon offsets in a cap-and-trade program, this would require a further level of administrative responsibilities, and potentially weaken the program if the sequestration projects lack credibility.

While a carbon tax can be simpler, there’s nothing inherent to a carbon tax that makes it easier to enforce or implement than an alternative solution. The complexity floor is lower, but the ceiling goes just as high.



AT: Innovation We should focus on innovation, not carbon taxes. LWZ

Stepp, Matthew, and Megan Nicholson. "Carbon Pricing Won't Solve Climate Change. Innovation Will." The Christian Science Monitor. The Christian Science Monitor, 13 June 2014. Web. 02 Aug. 2015.<http://www.csmonitor.com/Environment/Energy-Voices/2014/0613/Carbon- pricing-won-t-solve-climate-change.-Innovation-will>.

The primary goal of both national and international climate policy should be to make the unsubsidized cost of clean energy cheaper than fossil fuels so that all countries deploy clean energy because it makes economic sense. This means a fundamental focus on innovation, including substantially more public investment in clean energy research, development, and demonstration (RD&D), and reforms of clean energy deployment policies so that subsidies incentivize the development of better technologies.International climate negotiations should also address innovation by offering high- income‐ and emerging economies the option to gradually increase clean energy RD&D investment as a complement to an emissions reduction target. To start, a modest 0.065 percent target would increase global investment by$26 billion per year.

Focus on carbon taxes won’t help the climate. LWZStepp, Matthew, and Megan Nicholson. "Carbon Pricing Won't Solve Climate Change.


It is time to recognize that carbon taxes alone will not address global climate change. The fixation on carbon pricing within the climate debate has distracted the world from adopting a more effective and comprehensive set of climate policies that make economic sense. The debate needs to change for more viable, pragmatic, and high- impact‐ solutions to emerge.


February 2016 Con CountersEmpirics prove – a carbon tax doesn’t stimulate innovation. LWZ

Matthew Stepp is senior policy analyst at the Information Technology and innovation Foundation (ITIF) and Alex Trembath is a policy analyst at the Breakthrough Institute. Innovation Before Carbon Pricing How Economists Misrepresent Energy and Technology. The Breakthrough. October 11, 2013. http://thebreakthrough.org/index.php/programs/energy-and-climate/innovation- before-carbon-pricing

This gets to the second major problem with the carbon tax. The only way to get to dramatic cuts in global emissions is by developing significantly cheaper and better clean energy technologies. Current clean energy alternatives cost significantly more than conventional energy. Expecting consumers and businesses, especially in poor developing nations, to pay a large price premium for clean energy is wishful thinking. The only path to cheap and reliable clean energy is innovation: better batteries, better solar cells, better biofuels, better nuclear reactors, etc. Unfortunately, few economists focus on innovation and to the extent they do they see it as “manna from heaven,” something that just happens. To the extent a carbon tax induces innovation it is through the magic of the market: higher prices provide an incentive for entrepreneurs to develop a better energy mousetrap. Economists have built a cottage industry out of comparing carbon taxes, cap-and-trade, and conventional pollution regulations. But an innovation strategy to develop cheaper, better clean energy technologies doesn’t make the cut. Frankly, this shouldn’t be a surprise as innovation is not part of neoclassical economists’ lexicon. In Mankiw’s seminal textbook Principles of Economics, the word “innovation” is barely mentioned in almost 900 pages of text. But breakthrough technologies like jet aircraft, gas engines, computers and cell phones have never emerged because their competitors’ price increased. Steve Jobs didn’t develop the PC because the price of a typewriter went up. We have to only look to Europe for a natural experiment. Their gas prices are more than twice as high as in the United States and serve as a defacto carbon tax. While Europeans buy smaller cars and take more mass transit, they don’t buy more electric vehicles because they are expensive and provide limited range. While a higher gas price can spur carmakers to make smaller, more fuel efficient internal combustion engine cars, it has not and will not spur them to develop cheap batteries that let you drive 500 miles without a charge.


February 2016 Con CountersA carbon tax would not promote innovation. LWZ

Oren Cass is a Senior Fellow at the Manhattan Institute. What Would A U.S. Carbon Tax Accomplish? July 8, 2015. The National Review. http://www.nationalreview.com/corner/420913/carbon-tax-climate-change-policy

B&B’s approach on innovation also stands out. For one thing, they concede that a U.S. carbon tax “would not change investment decisions much,” which I think undermines their case significantly. For another, they point to Europe’s more efficient cars and higher adoption of renewable power as evidence that higher prices there are “driv[ing] innovation.” But this conflates changing consumption with actual innovation. If what the world needs is small cars and expensive wind turbines, it can already buy those. If a U.S. carbon tax compels the U.S. consumer to pay for them, it will have an effect on U.S. emissions. But without low- carbon/low-‐ cost‐ breakthroughs that other economies would voluntarily adopt, there is no transmission mechanism to alter behavior around the globe. If a U.S. carbon tax depends on global impacts, and the only global impact comes not from the tax but from a different policy (wealth transfers) that has not been defended, the benefits are hard to see.



AT: Warming The latest NASA data confirms that there are no melting ice caps. LWZ

Taylor, James, Senior Fellow for Environment Policy at the Heartland Institute and Managing Editor of Environment & Climate News. "Updated NASA Data: Global Warming Not Causing Any Polar Ice Retreat." Forbes. Forbes Magazine, 19 May 2015. Web. 10 Aug. 2015.<http://www.forbes.com/sites/jamestaylor/2015/05/19/updated-nasa-data-polar-ice- not-receding-after-all/2/>.

Updated data from NASA satellite instruments reveal the Earth’s polar ice caps have not receded at all since the satellite instruments began measuring the ice caps in 1979. Since the end of 2012, moreover, total polar ice extent has largely remained above the post-1979 average. The updated data contradict one of the most frequently asserted global warming claims – that global warming is causing the polar ice caps to recede. The timing of the 1979 NASA satellite instrument launch could not have been better for global warming alarmists. The late 1970s marked the end of a 30-year cooling trend. As a result, the polar ice caps were quite likely more extensive than they had been since at least the 1920s. Nevertheless, this abnormally extensive 1979 polar ice extent would appear to be the “normal” baseline when comparing post-1979 polar ice extent. Updated NASA satellite data show the polar ice caps remained at approximately their 1979 extent until the middle of the last decade. Beginning in 2005, however, polar ice modestly receded for several years. By 2012, polar sea ice had receded by approximately 10 percent from 1979 measurements. (Total polar ice area – factoring in both sea and land ice – had receded by much less than 10 percent, but alarmists focused on the sea ice loss as “proof” of a global warming crisis.) A 10-percent decline in polar sea ice is not very remarkable, especially considering the 1979 baseline was abnormally high anyway. Regardless, global warming activists and a compliant news media frequently and vociferously claimed the modest polar ice cap retreat was a sign of impending catastrophe. Al Gore even predicted the Arctic ice cap could completely disappear by 2014. In late 2012, however, polar ice dramatically rebounded and quickly surpassed the post-1979 average. Ever since, the polar ice caps have been at a greater average extent than the post-1979 mean. Now, in May 2015, the updated NASA data show polar sea ice is approximately 5 percent above the post-1979 average. During the modest decline in 2005 through 2012, the media presented a daily barrage of melting ice cap stories. Since the ice caps rebounded – and then some – how have the media reported the issue? The frequency of polar ice cap stories may have abated, but the tone and content has not changed at all. Here are some of the titles of news items I pulled yesterday from the front two pages of a Google News search for “polar ice caps”: “Climate change is melting more than just the polar ice caps” “2020: Antarctic ice shelf could collapse” “An Arctic ice cap’s shockingly rapid slide into the sea” “New satellite maps show polar ice caps melting at ‘unprecedented rate’” The only Google News items even hinting that the polar ice caps may not have melted so much (indeed not at all) came from overtly conservative websites. The “mainstream” media is alternating between maintaining radio silence on the extended run of above-average polar ice and falsely asserting the polar ice caps are receding at an alarming rate. To be sure, receding polar ice caps are an expected result of the modest global warming we can expect in the years ahead.In and of themselves, receding polar ice caps have little if any negative impact on human health and welfare,


February 2016 Con Countersand likely a positive benefit by opening up previously ice-entombed land to human, animal, and plant life. Nevertheless, polar ice cap extent will likely be a measuring stick for how much the planet is or is not warming. The Earth has warmed modestly since the Little Ice Age ended a little over 100 years ago, and the Earth will likely continue to warm modestly as a result of natural and human factors. As a result, at some point in time, NASA satellite instruments should begin to report a modest retreat of polar ice caps. The modest retreat – like that which happened briefly from 2005 through 2012 – would not be proof or evidence of a global warming crisis. Such a retreat would merely illustrate that global temperatures are continuing their gradual recovery from the Little Ice Age. Such a recovery – despite alarmist claims to the contrary – would not be uniformly or even on balance detrimental to human health and welfare. Instead, an avalanche of scientific evidence indicates recently warming temperatures have significantly improved human health and welfare, just as warming temperatures have always done.

Global warming won’t cause extinction. LWZRichard Tol 14, Prof of the Economics of Climate Change at Vrije Universiteit and of

Economics at the University of Sussex, Author in Working Groups I, II and III of the IPCC, author and editor of the UNEP Handbook on Methods for Climate Change Impact Assessment and Adaptation Strategies, Editor of Energy Economics and Associate Editor of Environmental and Resource Economics, PhD in Economics from Vrije Universiteit, Mar 31 2014, “Bogus prophecies of doom will not fix the climate,”http://www.ft.com/cms/s/0/e8d011fa-b8b5-11e3-835e-00144feabdc0.html

Humans are a tough and adaptable species. People live on the equator and in the Arctic, in the desert andin the rainforest. We survived the ice ages with primitive technologies. The idea that climate changeposes an existential threat to humankind is laughable. Climate change will have consequences, of course. Since different plants and animals thrive in different climates, it will affect natural ecosystems and agriculture.Warmer and wetter weather will advance the spread of tropical diseases. Seas will rise, putting pressure on all that lives on the coast. These impacts sound alarming but they need to be put in perspective before we draw conclusions about policy. According to Monday’s report by the Intergovernmental Panel on Climate Change, a further warming of 2C could cause losses equivalent to 0.2-2 per cent of world gross domestic product. On current trends, that level of warming would happen some time in the second half of the 21st century. In other words, half a century of climate change is about as bad as losing one year of economic growth. Since the start of the crisis in the eurozone, the income of the average Greek has fallen more than 20 per cent. Climate change is not, then, the biggest problem facing humankind. It is not even its biggest environmental problem.


AT: Oil Dependency We are already lowering our dependence on oil. LWZ

Herman Franssen, executive director of the Energy Intelligence Group, is also president of International Energy Associates, Inc. Obama and Declining U.S. Dependence on Imported Oil and Gas. Middle East Institute. Nov 25, 2014. http://www.mei.edu/content/article/obama-and-declining-us-dependence-imported- oil-and-gas

The domestic energy situation in the United States has also dramatically changed since the first year of the Obama administration. Net crude oil and product imports have been halved between 2007 and 2014 to about five million b/d and continue to decline. As for natural gas imports, net LNG and pipeline gas imports are down by almost two thirds since 2007. Obama can claim that during his tenure in office U.S. dependence on imported oil and natural gas has been reduced significantly, though this shift is largely due to the private sector operating on private rather than federal lands. Obama’s biggest contribution has been the passing of new Corporate Average Fuel Economy (CAFE) standards, which are already having an impact on automobile efficiency and will continue to reduce gasoline consumption in the United States for many years to come. A combination of initial market forces and later EPA implementation of the Clean Air Act has reduced U.S. CO2 emissions, a trend that is expected to continue. The administration expects to play a leading role at the Paris Climate Conference in 2015. The success in reducing U.S. oil imports by about 50 percent since 2008 has had a positive impact on global oil prices. There is little doubt that without the increase in U.S. oil production oil prices would have been higher in recent years. Geographically, the decline in U.S. oil and other liquids imports has not been spread evenly. The biggest decline (about 50 percent) was from non-OPEC countries. Oil imports from OPEC producers, including the Persian Gulf countries, are down by about 40 percent, and imports from Saudi Arabia have declined by only 13 percent between 2008 and 2013. The main reason for the differences between the Persian Gulf countries and, for example, Nigeria and North Africa is related to the gravity and sulfur content of crude oil. The incremental U.S. crude oil production is light and sweet oil, replacing similar oil from OPEC and non-OPEC countries. The Persian Gulf countries produce a heavier and sourer crude oil, which is a desirable crude oil for sophisticated upgrading refineries in Texas. In addition, Saudi Arabia is the part owner of the Motiva refinery in the United States, which has a capacity of 600,000 b/d. These refineries use primarily Saudi crude oil. And, by August of 2014, net crude oil and product imports from Canada had become almost one third higher than net crude oil and product imports from the Middle East. Drivers and Dynamics U.S. production of tight oil and conventional oil from the Gulf of Mexico will continue to be a major driver for several more years, further reducing U.S. net crude oil imports. It should be noted, however, that since the summer of 2014, oil prices have dropped by about $25 a barrel to around $75 a barrel. It is not yet clear what will happen to U.S. tight oil production after 2014 if the current or lower oil prices prevail for several years. While most oil analysts are cautiously optimistic that at $80 a barrel U.S. tight oil production will continue to increase, albeit at a slower pace, they do not exclude a slowdown in production growth or temporary stagnation until oil prices increase again. Lower oil prices will also impact the production of Canadian non-conventional oil, most of which is exported to the United States. The administration can positively impact the growth in tight oil and shale gas production by making more federal land available to the industry and minimizing federal interference on the


February 2016 Con Countersdevelopment of oil and gas on private land. It is feared that local objections to fracking may lead to additional federal government regulations.

People’s dependence is fixed so carbon pricing wouldn’t reduce dependence. LWZMulkern, Anne C [West Coast Bureau Chief for Environment & Energy

Publishing]. "Would a Push to Curb Carbon Really Reduce U.S. Dependence on Oil?" New York Times. New York Times, 22 June 2010. Web. 12 Aug. 2015.<http://www.nytimes.com/gwire/2010/06/22/22greenwire-would-a-push-to-curb- carbon-really-reduce-us-d-19627.html?pagewanted=all>.

When it comes to oil products, people's behavior is fairly fixed, especially over the short term, analysts said. Even when prices rise, people initially don't make adjustments, because there aren't ready substitutes for oil, said Ken Green, resident scholar at American Enterprise Institute. People must drive to get to work, he said, and most lack options like public transportation or moving closer to their job. "There's a fundamental misconception that there are alternatives that are available in sufficient quantities," Green said. "People have been convinced by the environmentalists that something exists that doesn't." In addition to gasoline, Green said, oil is used for jet fuel, diesel for trucks and a host of manufactured products, including plastic. Policies in the climate bills would render only small changes in fuel prices in the short term. A $20 price for a carbon ton under Waxman- Markey, Kerry-Lieberman and Cantwell-Collins would result in about a 20-cents-per-gallon increase in gasoline pump prices, Ellerman said. "We've seen much bigger changes through crude oil price swings," Ellerman said, adding, "It's not going to drive people out of cars. Let's not kid ourselves." He added, "It will have some marginal effect. It's not going to be that noticeable." Kerry spokeswoman Whitney Smith cited an analysis from the PPeterson Institute for International Economics that "shows Senator Kerry's legislation will create 200,000 new jobs a year and will reduce foreign oil imports." The report says that the bill would cut imports "33 to 40 percent below current levels and 9 to 19 percent" below levels expected by 2030 without the bill. The analysis shows, however, that the Kerry-Lieberman bill would trim total U.S. petroleum consumption less than 6 percent by 2030 compared to without the bill in that year. "The 'American Power Act' is fundamentally different than other pieces of energy and climate legislation that have come before it, which is why Senators Kerry and Lieberman were able to rally an unprecedented coalition behind the legislation who have never before endorsed a climate change bill," Smith said. The White House did not respond to a request for comment, but Obama in a speech to members of Congress a week after the BP well began spewing crude noted the country's continued need for fossil fuels, saying "we're not going to transition out of oil next year or 10 years from now." But Obama insisted that climate legislation would start a shift toward cleaner-burning fuels. A day earlier, in a speech in San Francisco, Obama said, "We've got to start cultivating solar and wind and biodiesel. And we've got to increase energy efficiency across our economy in our buildings and our automobiles." Ellerman agreed that "a carbon price would make biofuels more viable." But there are also problems with biofuels, he and other analysts said, like competition with food and trees for land, and the greenhouse gas that is produced from turning plants into energy. Products like algae-based fuel remain in the infancy development stage. Green argued that government incentives for biofuels are moving income from one place to another, and that they're offered "because the technology is more expensive." The argument that the existing climate bills won't affect oil consumption is a "straw man," said environmentalist Joe Romm, senior

February 2016 Con Countersfellow at Center for American Progress, because those bills were written before the oil spill. s, people will drive more miles," Green said.

Increases dependence. LWZRoy Cordato [vice president for research at the John Locke Foundation and a member

of the visiting economics faculty at North Carolina State University.] A Carbon Tax Will Fix Global Warming? It Just Aint So! Foundation for Economic Education.May 01, 2007. http://fee.org/freeman/detail/a-carbon-tax-will-fix-global-warming-it- just-aint-so

Then Applebaum gets to what she sees as the real benefit of the tax—more money. “More to the point, [the carbon tax] would produce a big chunk of money that could be used for other things.” (Apparently she means things other than what those who have earned it want to use it for.) She goes on to suggest balancing the budget or “fixing” Social Security. As an aside, she also claims that there is “a foreign policy benefit.” Countries that use the tax “would suddenly find themselves less dependent on Persian Gulf oil . . . ,” proving my initial point that most columnists have no problem writing on topics they know nothing about. It is very likely that such a tax would increase dependence on Middle East oil because oil refiners would reduce their use of the most expensive oil first. Middle East oil happens to be the least expensive.

We don’t need a carbon tax to solve oil dependency. LWZMomani, Bessma [senior fellow at The Centre for International Governance

Innovation, and associate professor of political science at the University of Waterloo and the Ballsillie School of International Affairs]. "It's Time to End Our Dependence on Oil." The Huffington Post. The Huffington Post, 22 Apr. 2015. Web. 03 Aug. 2015.<http://www.huffingtonpost.ca/bessma-momani/oil-climate- change_b_7112512.html>.

To move away from our dependence on oil, we need governments to help the private sector to offset decreased private sector motivation to develop renewable energy sources through market and non-market mechanisms. Oil exporting nations, which have fallen victim to the resource curse, can also take this time to diversify their state economies away from the fossil fuel sector, a move that may involve expanding the service-based and high-tech fields. Such restructuring will lead to the creation of strong and resilient economies as well as an implicit reduction in fossil fuel consumption.

February 2016 Con CountersRenewable energy and tech diversification solve. LWZ

Momani, Bessma [senior fellow at The Centre for International Governance Innovation, and associate professor of political science at the University of Waterloo and the Ballsillie School of International Affairs]. "It's Time to End Our Dependence on Oil." The Huffington Post. The Huffington Post, 22 Apr. 2015. Web. 03 Aug. 2015.<http://www.huffingtonpost.ca/bessma-momani/oil-climate- change_b_7112512.html>.

To move away from our dependence on oil, we need governments to help the private sector to offset decreased private sector motivation to develop renewable energy sources through market and non-market mechanisms. Oil exporting nations, which have fallen victim to the resource curse, can also take this time to diversify their state economies away from the fossil fuel sector, a move that may involve expanding the service-based and high-tech fields. Such restructuring will lead to the creation of strong and resilient economies as well as an implicit reduction in fossil fuel consumption.Ironically, transparency, particularly in regards to costs, could be a political liability for a carbon tax. Although both a carbon tax and a cap-and-trade program would impose higher energy costs, the costs from a cap-and-trade program would be more difficult to estimate, because the market would determine the price of emission allowances (and thus the overall costs of the program). In other words, cap-and-trade proponents may have an advantage in promoting their approach, because they can cite studies that estimate relatively low program costs.



Carbon Taxes Are a Red Herring

A carbon tax fails to cover many emissions sources. DAT“Options and Considerations for a Federal Carbon Tax.” Center for Climate and

Energy Solutions [Successor to Pew Center on Global Climate Change]. February 2013.Web. 12 January 2016. http://www.c2es.org/publications/options-considerations- federal-carbon-tax

A truly comprehensive and cost-effective carbon tax would target greenhouse gas emissions beyond CO2 from energy-related activities. There are non-energy sources of CO2 emissions, including land-use emissions from agriculture and forestry and industrial process emissions. Emissions of other greenhouse gases like methane and nitrous oxide arise in the agricultural, energy production and waste processing sectors as well as from land-use activities and can be measured and taxed in terms of their CO2 equivalence. Inclusion of these and other high global-warming-potential greenhouse gases under the carbon tax policy as a means of reaching the same target reductions is estimated to offer a significant source of cost savings, particularly in the early years of a program.17 However, while such an approach would be cost-effective, it could be more difficult. The difficulty arises because of the larger number of sources, difficulty with monitoring, and even assessing the greenhouse gas ratios (and the resulting social cost) are more uncertain. Taxing greenhouse gas emissions rather than simply CO2 should also be accompanied by provisions that extend tax credits to activities that sequester carbon or greenhouse gases as they become available, such as carbon capture and storage, forestry conservation, and feedstock uses of fossil fuels in manufacturing activities.

The harm arises from carbon taxes being marketed as a catchall solution to emissions. The impact is that non-energy sources (and non-carbon sources) of greenhouse gases risk going unaddressed as focus mistakenly shifts to taxing “carbon”.


Cases


February 2016 Pro Contentions

Pro Case

Introduction:Rising seas, rising debts. Crippling agricultural droughts, crippling funding droughts. Freak storms, freak market oscillations. Climate change is one of the biggest issues the world is going to face this century. This much is undeniable. A phenomenon caused by the emission of greenhouse gases, climate change entails huge potential harms for man’s quality of life. This is not to be taken lightly. But let’s zoom in on the United States for a moment. The U.S. has seen unsustainable debt levels keep rising exponentially while infrastructure crumbles and welfare programs run dry. Much like current levels of climate change, it’s unsustainable. But the federal government is not bereft of options. Climate change and budgetary policy, both, together, constitute the biggest hurdles the federal government will need to clear over time. And it’s all doable in one big leap. It is for this reason that my partner and I affirm today’s resolution, Resolved: The United States federal government should adopt a carbon tax.

Contention One: Carbon taxes mitigate climate changeAs a world leader and one of the largest emitters on Earth, the United States has no shortage of obligations to the environment. This obligation entails reducing emissions of greenhouse gases, of which carbon dioxide is a major constituent. Just as a basic primer on any discussion of the carbon tax, carbon dioxide emissions are priced like any other commodity: by the ton, which is a stand-in for the quantity of emissions.

It’s no secret that carbon taxes work. This is a matter of basic economics: when the price of something increases, the demand for it correspondingly falls. Let’s put some real numbers on that, courtesy of Donald Marron of the Tax Policy Center citing Congressional Budget Office statistics. The CBO found that, under a$25 per ton charge for emissions on the main sources of those emissions—electricity, manufacturing, and transportation—there would be an 10% cut in those taxed emissions within a decade. Considering the relative intractability of the problem—the economy runs on carbon—that’s huge. Considering that otherwise, emissions would naturally rise, this is even more impactful. Even though a carbon tax is strictly on CO2 emissions, It has impacts across the full scope of greenhouse gas emissions. Gilbert Metcalf, writing for the Brookings Institution, found that a 14% reduction in greenhouse gas emissions would accompany a carbon tax. The kicker was that emissions of other greenhouse gases—methane, for instance, which is substantially more potent than CO2—would fall by half. The rationale behind this is surprisingly clear: as carbon is taxed, this also places limits on industrial processes which emit secondary gases. A specific tax on carbon has the power to cover greenhouse gas emissions in their entirety effectively.


February 2016 Pro Contentions

Contention Two: Carbon taxes are an economic salveLet’s cover the other side of the United States’ generational problem coin: fiscal policy and the economy. Usually, taxes don’t directly help the economy. But a carbon tax is fundamentally different from the taxes we pay in a fundamental way: it targets harmful activity. Most taxes—income tax, VAT, sales tax—are treated as a penalty for constructive behavior. They’re fees for things like commerce and productivity. A carbon tax, meanwhile, directly targets harmful activity. This is important, because a carbon tax can generate long-run benefits for both the government and the economy. Terry Dinan of the Congressional Budget Office, for instance, writes that “Federal budget deficits tend to result in lower economic output over the long run than would otherwise be the case, by crowding out private-sector investment. Thus, policies that reduce deficits generally have a positive effect on the economy in the long run.” By tackling carbon, the United States gets the double whammy of environmental protection and budget-balancing income. This is also where carbon taxes get a huge leg up on the other major alternative to limiting emissions: cap-and-trade. Cap-and-trade essentially sets up a market for carbon based on what are essentially permits for emissions. While a carbon tax is guaranteed to generate revenue, cap-and-trade, based on implementation, has the potential to create a market of tradeable allowances from which the government cannot extract revenue.

Contention Three: The United States can bolster soft power and win the climate fight on an international level

If the U.S. adopts irrelevant or unworkable climate policy, the rest of the world cannot cooperate or follow suite. This is a highly harmful outcome, because real climate change mitigation is contingent on international action. Even if the U.S. accounts for its slice of the pie, it’s still just a slice. Imagine the Kyoto Protocol in perpetuity—teeth gnashing and worthless agreements leading to worse outcomes for the world as a whole.Carbon taxes actually present the United States with its best opportunity to be a world leader on climate action. Jean Tirole and Christian Gollier of the Tououse School of Economics elaborate further: “A carbon tax, collected by individual countries, looks a far more effective tool. Countries could be required to impose the common price as long as all others do too, and domestic revenues from the tax could be recycled internally.” By becoming the largest, most powerful state to adopt a carbon tax, the United States positions itself as a global leader in climate policy. Because carbon taxes can be handled at the domestic level, the United States’ precedent is meaningful internationally—it can be copied. And because carbon taxes have much more viability globally, this precedent is the best opportunity to create real impacts in the climate fight.

The United States can take charge on the climate while simultaneously making positive economic strides, or it can start letting things fall by the wayside. As an effective, economically sound, internationally agreeable policy, carbon taxes present the United States with its best hope of solving big problems without shooting itself in the foot. The balance is difficult; carbon taxes make it doable.


Con Case 2/8/16 Both teams wish to save the environment. At this moment in time, the U.S. is not ready for a CT which would make working class Americans pay for insignificant emissions reductions. It is for this reason we oppose Resolved: The United States federal government should adopt a carbon tax.

Instead, choose our FRAMEWORK: the team which makes sense of the best short term solution that will CONTINUE into the long term to cut pollution, save lives, and save the economy is the logical way to vote.

At this moment with our U.S. economy and worldwide regulation where it is today, only the mutually exclusive policy of INCENTIVE FOR INNOVATION for renewables, where we can leap frog ahead to deep and CONTINUING emissions reductions must preceed the ultimately insufficient and economy-dragging Carbon Taxes.

Contention One: Carbon taxes don’t impact the environmentIf the cost-benefit ratio of the pure tax-to-carbon interchange was even, there might be an argument for a carbon tax. As Megan McArdle of the Atlantic explains, however, it’s not even close: It is a staggering 10

E. A 1% increase in price leads to less than a 0.1% decrease in consumption over the long term. And that's the best- case; in the short term, and in poorer countries, it's even less. Meanwhile, income elasticity (how demand changes with rising or falling incomes or oil prices) means demand will also grow unless the price changes are very, very large.

The problem is, to get the big results would mean massive price increase (essentially a high tax rate), which would simply be an even more huge, unfair regressive tax on the working poor.

F. It may be working in other countries, but the effects will flatline without achieving the target scientists scream for. –Unless viable renewables and clean transportation become practical and affordable.

G. Also, CT will not decrease emissions due to carbon leakage.H. Also, if the U.S. acts unilaterally, reduction will not meet the target since will not be enough

because the U.S. acting unilaterally, without India or China on board.

Contention Two: Carbon taxes starve the economy We’ve just shown you that the CT is ultimately ineffective for the solutions we so desperately need. In case you think it wouldn’t hurt to cut a little emissions, think again. This tax or economic penalty carries nasty side effects regressive pricing and economic shrinkage, It continues to mask the real offenders: big oil money.

B. Though many countries and literature deem a Carbon Tax as a necessary solution, this is not the time. Terry Dinan of the Congressional Budget Office explains this in more detail:

The higher prices it caused would diminish the purchasing power of people’s earnings, effectively reducing their real (inflation-adjusted) wages. The costs of a carbon tax would not be evenly distributed among U.S. households. For example, the additional costs from higher prices would consume a greater share of income for low-income households than for higher-income households, because low income households generally spend a larger percentage of their income on emission intensive goods

The issue isn’t simply that the American people are asked to pay for a piece of environmental legislation: it’s that a) the poorest Americans are asked to pay, proportionally, the most, and b) the legislation comes with the nasty side effect of economic stagnation at a time when the economy is in a vulnerable stage of growth.

B. It masks a real longterm solution and opportunity for investment for RENEWABLES> Even if the other team

says it is revenue neutral, with money put back in American’s pockets through homeowner heating rebates and more, then where is there money left for the claims that the deficit will be cut? Or, and this is crucial, for true development of the ultimate solution: energy renewables and clean transport?!?

Yet a Ct also ruins American competitiveness.

Contention Three: A CT is the worst of mutually exclusive optionsLet’s discuss opportunity costs for a moment. The principle is essentially that if one action is taken instead of another better action, that action is harmful. It is essentially a harm on top of the iffy benefit you go for Well, the opportunity costs for carbon taxes are massive.

Now some may say this is not topical, but if we know there are other effective policies that will gain what CT wishes and MORE, we are morally obligated to warn everyone. Further, these other options can’t be done ALONG WITH CT.

Here’s the problem with limiting carbon emissions: realistically, under the modern paradigm, there are no alternatives. Craig Pirrong of the University of Houston elaborates further: “With respect to electricity generation, the major renewables (wind and solar) are both intermittent and diffuse. These are obstacles inherent in the source of the energy that will be difficult to surmount.” As for transportation technology, “With respect to transportation fuels, the outlook is even more problematic. Battery technology has proved a major constraint on the ability to turn electricity (including electricity generated from renewable sources) into an efficient transportation fuel.” If the United States had viable alternatives ready to go for fossil fuels, then a carbon tax policy could have merit as a means to “push” a greener future. A greener future does not yet exist. Rather than shooting itself in the foot economically and creating negligible gains environmentally, the U.S. should aim heavy investment in R&D.

One way is a cap-and-trade system, whereby instead of putting a price on carbon, carbon allowances are disbursed whereby efficient enterprises can “sell” emissions to dirtier ones. Theoretically, total emissions get reduced. If the end goal of environmental policy truly is to limit total emissions, cap-and-trade is a far more direct way to do so. The United States would also ensure internationally compatibility on a grander environmental framework, since cap-and-trade is more popular internationally. But both CT and Carbon Trading can’t co-exist.

Better still, if your wish is to cut off carbon emissions quickly without harming the economy or saddling the working class with economic burdens, then intensive research and development to make revewable energy and clean transport affordable and viable (solar, hybrid cars etc.) must be the focus, which CT would only hinder and distract. ________

Some may feel the government tried to subsidize solar development and green jobs and failed…but…

While Public Forum Debate does not include laying out a policy, we need to just show you that other competing policies exist, and their ability to solve sooner and greater AND continually over the long term ---AND with no nasty price to pay with unfair regressive pricing or inadequate focus on green technology solutions make us plead for you to see with we have little time to waste on CT, and must beg for other policies the link green technology development to conservation!

Why opt for a plan that will only limit U.S. carbon emissions insufficiently for a global plan, and mostly in the short term, when the fallout will also mean economic contraction and environmental stasis.

Instead of standing on the backs of American consumers—particularly the poorest ones—the United States government can use its economic leadership to drive investment and ride this country’s scientific and cultural

prowess into a clean, economically sound future. A carbon tax isn’t progress; it’s a roadblock to it.


con case 2/8/16 - file · web viewat this moment with our u.s. economy and worldwide...

Documents