Carbon tax touted as simpler

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By Tom LoBianco

The carbon tax — an idea long favored by environmentalists to reduce pollution — has started to make a quiet comeback among leading Democrats on Capitol Hill despite being shunned by lawmakers in the past who were wary of the word "tax."

As action on a carbon trading proposal — considered an alternative to a plain carbon tax and favored by President Obama, Speaker Nancy Pelosi and Senate Majority Leader Harry Reid — has sputtered and stumbled through Congress, carbon-tax advocates have pushed their alternative.

Tax supporters, including former Vice President Al Gore and NASA climate scientist James Hansen, have questioned the complexity of a cap-and-trade plan, saying a carbon tax is much simpler, would make it easier for businesses to factor in increased costs and still reduce greenhouse gasses.

A cap-and-trade plan would set a hard limit on carbon emissions and build a market for companies to trade allowances, while a carbon tax would apply a levy on emissions.

Rep. John Larson, Connecticut Democrat and the fourth-ranked Democrat in the House leadership, introduced a plan last month to levy $15 per metric ton of carbon dioxide and return the money to taxpayers. He has long advocated for a bare-bones carbon tax.

"Unlike a cap-and-trade system, my carbon tax would create no complex new bureaucracies or complicated auction schemes," Mr. Larson said in a statement last month.

Despite the carbon tax's simplicity, Democratic leaders have tended toward the cap-and-trade plan on grounds that it carves a moderate path necessary to win political support.

"A carbon tax is the surest way to fix prices, while cap-and-trade is the surest way to meet environmental goals," said William Whitesell, director of policy research at the Center for Clean Air Policy, at a hearing last month.

In the House, a turf war has developed between Energy and Commerce Committee leaders who introduced a cap-and-trade proposal last week and Ways and Means Committee leaders who argue that any measure that brings money into federal coffers falls under their jurisdiction.

Ways and Means Committee Chairman Charles B. Rangel, New York Democrat, has led hearings over the past two months and debated the merits of a carbon tax as an alternative to the cap-and-trade plan introduced last week.