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carbon tax

Thomas Friedman’s Evolving Support for an Innovation Carbon Tax

New York Times columnist Thomas Friedman is nothing but consistent: he wants a carbon tax and he wants it bad. Since 2005, he’s mentioned “carbon tax” 41 times in his column. Yet, while his support for a carbon tax hasn’t waned, the characteristics of his preferred carbon tax policy have.

As ITIF argues in Inducing Innovation: What a Carbon Price Can and Can’t Do, pricing carbon by itself does little to support clean energy and carbon reductions. It can be a useful tool for nudging near-competitive low-carbon technologies into the market and spurring modest carbon cuts, but it’s at best a complementary climate policy. That changes if we use a carbon tax as a revenue-raiser to support additional policies aimed at making clean energy cost and performance competitive with fossil fuels. In other words, tying a carbon tax to aggressive energy innovation policy can get us better climate mitigation “bang” for our climate policy “buck.” It’s why I proposed an “Innovation Carbon Price” that ties 20 percent of carbon tax revenue to public energy innovation investments and 80 percent to strengthening corporate tax incentives for training, research,

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IEA Report Cover

Finding a New Direction in Climate Change Policy

It’s clear that the world is losing the race against global climate change. The International Energy Agency put numbers to this fact in a new report, Tracking Clean Energy Progress 2013, which finds that, “the amount of CO2 emitted for each unit of energy supplied has fallen by less than one percent since 1990.” In other words, for all of the global growth in renewable energy in the last decade, the world continues to rely on fossil fuels to the detriment of more global warming. Of course, this has to change and change fast.

This past weekend, I participated in a day-long symposium at Villanova University aimed at discussing what kind of changes need to be made. The conference hook was brought on by Rutgers Law Professor Howard Latin who provided the keynote address based on a book he published late last year titled Climate Change Policy Failures that argues conventional climate policy approaches fought for during the last twenty years such as cap-and-trade, international negotiations, and emission regulations won’t successfully produce deep carbon reductions. Latin contends that these “incremental” policy approaches simply kick the emission reduction can

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