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Posted: Friday, 02 November 2007 11:50AM
Bloomberg to Propose Pollution Tax
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NEW YORK (AP) -- Mayor Michael Bloomberg, a potential independent presidential candidate, was to propose a national ``pollution pricing'' plan Friday that envisions taxing companies directly for the greenhouse gases they release.
The billionaire businessman, said to be weighing a White House run, was to outline his plan at a climate summit of mayors in Seattle.
Bloomberg also was set to announce that he will travel to the Indonesian island of Bali next month to be a guest participant at the United Nations climate conference, where nations will start discussing a replacement for the Kyoto Treaty. It aims to cut greenhouse gas emissions and expires in 2012.
According to a copy of his prepared remarks for the Seattle gathering, Bloomberg's pollution tax plan envisions a fee of $15 for every ton of greenhouse gas. It would be ``revenue-neutral,'' meaning that the proposal by the Democrat-turned-Republican-turned-independent includes a tax cut that would return $500 a year to the average taxpayer.
Greenhouse gases like carbon dioxide and methane essentially trap the sun's energy, warming the Earth's surface and lower atmosphere. In 2005, U.S. sources produced 7.26 billion metric tons of the gases.
Bloomberg's plan is similar to one already conceived by Democratic presidential hopeful Chris Dodd, who has outlined a $50 billion carbon charging scheme. By including a tax cut - specifically, reducing the payroll tax - Bloomberg also takes a page from Democrat Al Gore, another subject of endless presidential speculation. Gore addressed the mayors' conference Thursday.
Gore has repeatedly touted Dodd's idea and recently suggested incorporating a tax cut with it.
``I'm convinced that we should eliminate the payroll tax and replace it dollar for dollar with a (carbon) tax,'' Gore said in the September/October issue of 02138, a magazine about Harvard alumni.
Former President Bill Clinton also spoke Thursday at the climate summit, where city leaders are gathering to discuss promising strategies for reducing carbon emissions.
Bloomberg, in his remarks, said the voluntary and unenforceable emissions targets favored by President Bush are ``like voluntary speed limits - doomed to fail.''
Bloomberg denies any plans to get into the presidential race, but he refuses to promise unequivocally that he will not run. In an interview on CNN Thursday, he declared the ``country has serious problems'' but insisted people are asking him the wrong question.
``What you have to ask is: Why can't we get the candidates that are running - and there's plenty of declared candidates, both Republican and Democrat - why can't they stop this partisan bickering in Washington, why can't they address the issues, why do we have this continued money-and-influence kind of politics?'' he said.
In his prepared speech, Bloomberg said another carbon-reduction approach known as cap and trade, which many Democratic candidates have endorsed, is a flawed solution.
Under cap and trade, power plants or businesses that exceed pollution caps must buy or trade for additional allowances, usually from others that have been able to cut their emissions.
Bloomberg said cap and trade contains hidden costs; for example, if 100 companies release higher emissions than planned, they all have to purchase more credits, which creates a bidding war and costs companies more money.
He suggested that some politicians support cap and trade ``because it obscures the costs.''
A direct pollution charge ``would be easier to implement and enforce - it would prevent special interests from opening up loopholes,'' he said.
Bloomberg was applauded by environmentalists on Friday for attempting to address the issue, but many said the politically unpopular concept of a carbon tax would be a heavy lift in Congress and also does not guarantee the same benefits as the more widely supported approach of cap and trade.
``It's not a baseless solution, but when it comes to fixing climate change, by far the best option is cap and trade,'' said Tony Kreindler, a spokesman for Environmental Defense.
Kreindler said pushing a carbon tax through Congress would be a guessing game of choosing a price without knowing whether it will result in emissions reductions. And even if such a measure had a chance of passing, the tendency of lawmakers would be to drive the tax down as low as possible, which would water down its overall effect.
Other critics have also said taxing pollution emissions directly would burden consumers and hurt the economy.
Bloomberg suggested it would actually save money.
``Even though energy costs would rise, the savings from tax cuts and energy efficiencies could, over the long run, leave consumers with more money in their pockets,'' he said.
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