By Brian Kahn
On Thursday, President Obama dropped a surprise in his transportation plan as part of his annual budget. The plan — dubbed the 21st Century Clean Transportation System — calls for $300 billion in investments over the next decade in high speed rail, driverless cars and mass transit across the U.S.
That would cut down on carbon pollution and could help the U.S. meet its 10-year climate goal of reducing carbon emissions 26 to 28 percent below 2005 levels.
That Obama wants to reduce transportation emissions is no surprise. Twenty-seven percent of the nation’s greenhouse gas emissions are due to transportation, second only to electricity generation as the main source of emissions.
The surprise, though, is how he wants to pay for it. The $300 billion would come via a “fee” of $10 per a barrel of oil, phased in over five years. According to CNN, it would apply to both domestic and imported oil used in the U.S. but not exports. That translates to roughly an extra 25 cents tacked onto a gallon of gas if oil companies decided to pass the cost onto consumers.
We asked leading climate economists for their thoughts on the proposal. The answers below have been edited lightly for clarity.
Could a tax like this eventually be part of an effective suite of climate policies in the U.S.?
Michael Greenstone, University of Chicago Milton Friedman Professor of Economics: The proposal would certainly raise a lot of desperately needed money for infrastructure and that in itself is important. Along with that, there are two somewhat subtle ways that this is quite a bold proposal from a climate perspective. First, it could be used in international negotiations to spur pricing carbon emissions from petroleum around the world. Second, on the domestic side, it might also set the stage to trade CAFE regulations for pricing carbon emissions from petroleum directly, which is likely to be less costly for the U.S. economy overall.
Continue reading at Climate Central…