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Economy
Obama May Levy Carbon Tax to Cut U.S. Deficit, HSBC Says
2012-11-07
Barack Obama may consider introducing a tax on carbon emissions to help cut the U.S. budget deficit after winning a second term as president, according to HSBC Holdings Plc.

A tax starting at $20 a metric ton of carbon dioxide equivalent and rising at about 6 percent a year could raise $154 billion by 2021, Nick Robins, an analyst at the bank in London, said today in an e-mailed research note, citing Congressional Research Service estimates. “Applied to the Congressional Budget Office’s 2012 baseline, this would halve the fiscal deficit by 2022,” Robins said.

Hurricane Sandy sparked discussion on climate protection in the election after presidential candidates focused on other debates, HSBC said. A continued Republican majority in the U.S. House of Representatives means ObamaÂ’s scope for action will be limited, Robins said. Cap-and-trade legislation stalled in the U.S. Senate after narrowly passing the house in 2009.

North American discharges fell 1.3 percent last year amid slowing economic growth. In China, the worldÂ’s biggest emitter, greenhouse gases from fuel use rose more than 9 percent in 2011, according to BP Plc (BP/) statistics published on June 13.

“Cap-and-trade has been demonized” and Obama probably won’t seek to install such a program in his second term, Richard Sandor, founder of the world’s biggest carbon trading exchange in Europe, said today at the presentation in London of his book titled Good Derivatives.

New carbon trading programs in California, China and Brazil may encourage U.S. lawmakers to introduce greenhouse gas trading by about 2020, Sandor said.
Posted by:Au Auric

#8  Technocrats believe they can create the Perfect Society. Turn this dial here, tweak this parameter there, change one thing and Voila!

But anyone working with complex systems knows there is no such thing as 'one thing'. Everything is deeply inter-twingled. Sure, a carbon tax will generate a trifling bit of deficit reduction. But it will drive up the cost of fuel, of energy production and it will make any manufacturer with an energy-intensive process look elsewhere before building a plant in the US. One teensy change in a parameter, but a BIG hit on the economy.
Posted by: SteveS   2012-11-07 22:08  

#7  What they are not talking about is how that would effect the price of gasoline because it seems to me that's how they would implement the tax, on either the oil or the pumps. It might generate a lot of cash but it would be extremely unhelpful to our economy.
Posted by: rjschwarz   2012-11-07 21:08  

#6  carbon tax would be less destructive than a big jump in the Cap Gains tx
Posted by: lord garth   2012-11-07 18:58  

#5   the US House of Representatives initiates tax-writing.

Of course, Rivrdog. But bureaucrats write regulations at the behest of the White House without need for old-fashioned laws.
Posted by: trailing wife   2012-11-07 18:09  

#4  I'd just love to know how that would "halve the fiscal deficit"
It's a post-normal science thing RandomJD. Math doesn't matter, feeling good is everything.
Posted by: tipper   2012-11-07 17:34  

#3  Hmmmm....last I checked, under our Constitution's Separation of Powers Doctrine, the US House of Representatives initiates tax-writing. Sure, they can do it at the suggestion of the President, but they are under no requirement to write up his taxes on demand.
Posted by: Rivrdog   2012-11-07 16:06  

#2  A moron elected by morons.
Posted by: g(r)omgoru   2012-11-07 14:24  

#1  could raise $154 billion by 2021

As of the end of FY12, the US government was hemorrhaging spending about $10.5 billion per DAY. So this tax would take 8 YEARS to raise enough to cover about 15 DAYS worth of spending.

I'd just love to know how that would "halve the fiscal deficit" by any year when any of us (or our children, for that matter) would still be alive.
Posted by: RandomJD   2012-11-07 14:19  

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