New energy taxes could bring $6 gas

April 22, 2013

By Warren Duffy

Is gas at more than $4 a gallon in California high enough?

Not if David Lipton gets his way. The former member of the Clinton administation now is the deputy director of the International Monetary Fund. He recently urged, “It is time for subsidies to end and carbon taxation to be put in place.”

Ending subsidies taken from taxpayers is one thing. But actually raising taxes yet again is another.

According to the Washington Post, “For the United States, the IMF estimated that would require a $1.40 levy per gallon of gas and other fees totaling more than $1,400 per person each year — around $500 billion in total, or more than 3 percent of the country’s annual economic output.” The money would be used to “battle climate change and pay for social programs.”

That echoed the words of former Energy Secretary Steven Chu, “Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.”

So the $4.50 a gallon you just paid for gas soon could be $6. A 16-gallon fill-up could rise from $72 to $102. 

Lipton’s approach stems from the ongoing global warming debate.  For him it is only logical to fund social programs for more underdeveloped countries that fall victim to the aftermath of global warming through no fault of their own.

Energy taxes

Lifton and the IMF agree that, from the United States and China to the poorest of the poor, countries should be more aggressive in developing energy tax and pricing policies that reflect the true cost of fossil fuel use. That would include such “externalities” as pollution and the steps needed to mitigate the effects of a warming climate. In other words, it is once again time for the rich to pay “their fair share,” with “the rich” defined as all Americans.

This IMF scheme, fundamentally a transfer of wealth, is no different from the carbon auctions that began in November 2012 by the California Air Resources Board.  From the $400 Million of revenue brought in from the auction, Gov. Jerry Brown supports a similar wealth redistribution scheme to be passed along to low-income communities located near freeways and industrial pollution sources.  

This latest idea for “wealth redistribution” was announced when the Governor’s Office of Planning and Research came up with a new environmental issue called “the urban heat island effect.”  This scientific-sounding theory claims there is a “high temperature dome of heat created over an urban or industrial area by hot layers forming at building top or chimney levels.”

We’ve seen this before. Specifically, the supposed threat of global warming brought the passage of AB 32, the Global Warming Solutions Act of  2006. At the time, we were told passage of this law was critical to California in order to address the problem of global warming presumably caused by greenhouse gases, such as carbon dioxide, being trapped in the atmosphere and causing the earth’s temperatures to skyrocket. 

This law allowed for the implementation of the cap and trade auction and the necessity for those CO2 emitters to “cap” their gases and pay the state in “trade” for a credit so they might continue polluting.  It would appear since the globe has not warmed for 16 of the last 18 years, as the latest studies show, supporters of the California’s cap and trade scheme have been forced to rethink their strategies for the redistribution of wealth.  Hence, the urban heat island effect has been suddenly unearthed in Sacramento.

No global warming

Indeed, the lack of evidence for recent “global warming” has forced a change in terminology. In his 2013 State of the Union Address, for example, President Obama used the new phrase, “climate change,” which covers just about anything.

Whatever the supposed environmental problems might be, state and federal governments are more than willing to solve any issue with increased taxes and fees or more rules and regulations that add to the cost of just about everything.  The California Chamber of Commerce is preparing for a May 2013 hearing claiming that CARB’s cap and trade program is nothing more than an “illegal tax.”

And both the Chamber and the Pacific Legal Foundation have sued to throw out cap and trade as an illegal tax.

Ernest Moniz is Obama’s nomination to replace Chu as Energy Secretary. Although Moniz has not yet weighed in on a carbon tax, we know his boss is increasingly frustrated that Congress has not taken more direct action on the White House’s environmental agenda.  A carbon tax or possible alternative, a national cap and trade scheme modeled on California’s, might be tried through executive orders.