I eagerly read a story about the windfall profit tax announced by Obama yesterday on the heals of Exxon Mobil's announcement on record profits. Skirting into the tax discourse is a potentially dangerous area for politicians, so I can perhaps justify his focus on the redistributive consumer rebate that will be funded by such a tax. But in the big picture this policy is very weak on substance, much to my disappointment.
If this political economic opportunity to pass a windfall profits tax is lost, and fails to correct some of the fundamental distortions in the carbon energy economy, it would be a terrible missed opportunity that may not reemerge anytime soon. It will have repercussions far beyond high energy costs, and postpone attempts to foster a low-carbon energy system.
Obama Remarks on the Economy are here on the nyt
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2 comments:
I don't see this as weak on substance at all. First of all, the energy rebate is not a gimick, it is short-term relief. It doesn't force consumers to buy more fuel. As a universal redistribution it is progressive. It allows consumers to chose to spend the money on food, or rent, or even to save it. This is the opposite of the McCain elimination of the gas tax. More importantly, it includes a windfall profits tax. By converting it directly to a rebate, it takes the political sting of a "tax" out and makes it a populist position. This would have precedential value as well. Any responsible carbon tax plan or cap-and-auction plan (Obama supports the latter) would have to be revenue neutral to fly in our anti-tax culture. A universal rebate based on a share of the revenue from either system would help mitigate the regressive aspects. This is an opportunity to make the idea of a carbon tax (my preferred option) or a cap-and-trade system palatable to the general public.
Obama's energy policy has become more clear since that announcement. Climate progress describes it well here.
http://climateprogress.org/2008/08/04/barack-obama-new-energy-plan-for-america-efficiency-now-10-renewables-by-2012-1-million-plugs-in-by-2015/
Though progressive, a rebate is not any solution, its political posturing. I know that is part of the game (despite my nagging idealism). Yet, if that wfp tax passes, its a once in-many-generations opportunity that can't be squandered for the sake of modest consumer spending. I would rather see this invested more substantially in means to help conserve and produce energy more efficiently... Maybe that is the ultimate plan for wfp tax, some rebate, some reinvestment...
I think this more recent announcement is moving the right direction...but not far enough... 10% renewables by 2012 seems like a marginal foray into the carbon energy economy, since we are 7% as of 2006 according to the EIA...
http://www.eia.doe.gov/cneaf/solar.renewables/page/prelim_trends/rea_prereport.html
Its particularly the details about that $150 billion in green jobs that still seem quite abstract. We need that Apollo vision advocated by Shellenberger and Nordhaus.
http://www.apolloalliance.org/
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