Friday, September 28, 2007

The Dingell is in the details on carbon taxes

Several weeks after promising it, Michigan’s House Democratic war horse, John Dingell, has delivered an carbon-tax energy bill. And, as I expected at that time, there’s a lot about which to be concerned; there’s some halfway good stuff, too, but even that has the lingering aroma stench of pandering to it.

I have several points of analysis:

• I’m OK with a carbon tax. But, if you’re going to submit something so serious, and you intend for it to succeed (whether Dingell does so or not is an open question, at best), you’d better put plenty of negotiating padding in there. And, I don’t think $50 a ton does. I think you would need to start at $100 a ton (too much more than that would turn people off right away) to bargain down to $50 a ton.

• Exempting biofuels? Crazy, and scientifically illiterate. Carbon dioxide is carbon dioxide, no matter its source. But, Michigan grows some amount of corn, and sugar beets, which some wonder whether they might substitute for cane sugar for ethanol. Michigan/Midwestern political pandering, at least to a fair degree, I think.

• A 50-cent a gallon gas tax is good, but, exempting diesel fuel? The Oil Drum argues that Dingell is pandering to the Teamsters. It’s possible, is what I’ll say, at the least. Dingell ranks 17th among Representatives from 1990-2006 in Teamsters political contributions, according to Open Secrets, receiving $71,000.

• Eliminating the mortgage writeoff above 3K square feet on homes? The size standard panders somewhat to anybody not moving to the upper edge of the middle class and beyond, but, as more and more cookie cutter McMansions beyond this size are built by cheap builders, I welcome this. Dingell does soften the blow by having homes over 3K in size lose the mortgage deduction on a sliding scale and not all at once.

• The “revenue-neutral” part? I’m OK with putting part of the money this raises toward health care issues, but think part of it should be used for budget reduction, too, rather than all of it being spent.

Bottom line? If Dingell’s bill is intended in addition to the 35mpg CAFÉ standard for cars (and trucks being finally included), I’ll give him a B-minus. It doesn’t get higher because we need to nail a first effort on carbon tax. In addition to junking the gas tax free ride for diesel and the carbon tax loophole for biofuels, I’d like to see a carbon cap-and-trade program as part of this legislation.

If this is intended to substitute for a CAFÉ increase, there’s enough here I won’t give Dingell an F. But, that’s about all I’ll say.