One of the many amendments that didn’t pass in the Democrats’ 2014 budget bill would have permanently barred any attempt to pass a carbon tax.
But it turns out that Americans are already paying a carbon tax.
"If the total cost of climate disruption in 2012 were paid in each state like a sales tax, it would add 2.7% to every purchase in the US," says Peter Lehner in a Natural Resource Defense Council blog. His colleagues did the math.
Extreme weather during 2012 shaved about 1% off our country’s GDP, reaching a staggering $140 billion in damages.
Although South Dakota failed to pass legislation that would add a penny to the sales tax, the irony is that state’s residents are paying a far higher, hidden tax, Lehner says.
"Last year’s prolonged and severe drought, which reduced corn yields 18% and led ranchers to sell off their cattle and sheep, cost the state an estimated $1.7 billion – the equivalent of tripling their sales tax rate, from 4%-12%."
And this climate disruption tax won’t fix potholes, build elementary schools or any of the range of services paid for through a sales tax. It just adds to the burden because it has to be used to dig people out of snowstorms or re-build washed out roads.
In contrast, a real tax on carbon is "one of the obvious solutions to our budget, energy and environmental problems – the one that would be the least painful and have the best long-term impact – is off the table," says Tom Friedman in the New York Times.
"Shrinking the tax deduction for charity is on the table. Shrinking Social Security, Medicare and Medicaid are on the table. But a carbon tax that could close the deficit and clean the air, weaken petro-dictators, strengthen the dollar, drive cleantech innovation and still leave some money to lower corporate and income taxes is off the table," he says.
Recent polls show Americans prefer a carbon tax over program cuts to reduce the deficit.
NY State Includes Climate Risk in Bonds
The connection between climate disruption and the financial markets is also becoming clearer.
For the first time, a state is including climate change among the fiscal risks discussed in bond offerings.
That state is New York. Climate disruption is listed as a risk along with federal budget cuts and unsettled labor negotiations, reports Bloomberg.
"Significant long-term planning and investment by the federal government, state and municipalities may be needed to adapt existing infrastructure to the risks posed by climate change," says the risk statement.
Strong legislation has been introduced in the Senate to combat climate change – it’s just sitting there at the moment.