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Congress is likely to consider domestic climate change legislation during 2009, with a cap-and-trade system continuing to draw support from the Obama Administration and many leaders in Congress. Yet cap-and-trade regulations would take years for EPA to develop and implement, the desired price signal for carbon dioxide might be difficult to achieve until years later, and administration and enforcement of a comprehensive cap and trade system poses significant challenges. The urgency of the climate change crisis calls for immediate action, which can be provided best by a carbon tax imposed on all coal, natural gas, and oil produced in the United States and imported from other countries. A carbon tax could be implemented and enforced without the need for a complex new regulatory scheme and would provide an immediate carbon price signal. In addition, revenue from a carbon tax could support research and development of alternative energy and ease any regressive effects of the tax. Moreover, adoption of a carbon tax during 2009 would provide the United States much needed credibility on climate change issues and would allow the United States to focus its climate change efforts on negotiation of a new international agreement that provides meaningful carbon dioxide emission reductions by industrialized nations and less developed countries.

Combating Global Climate Change: Why a Carbon Tax is a Better Response to Global Warming than Cap and Trade