Energy

CBO Suggests $1 Trillion Carbon Tax As France Reels From Anti-Carbon Tax Riots

No featured image available

• The Congressional Budget Office suggested a $1 trillion carbon tax to help plug the budget deficit.
• Its report comes as thousands rioted in France, and even in Belgium, over planned increases in fuel taxes.
• France wanted to raise fuel taxes to reduce oil consumption and fight global warming.

It’s been just nine days since the French government abandoned plans to increase the carbon tax on fuel, and the congressional budgeting arm is suggesting a $1 trillion tax on carbon dioxide emissions to close the budget deficit.

“This option would impose a tax of $25 per metric ton on most emissions of greenhouse gases in the United States,” reads a Congressional Budget Office (CBO) report released Thursday. “The tax would increase at an annual inflation-adjusted rate of 2 percent.”

The CBO suggested a carbon tax as one of “121 options that would decrease federal spending or increase federal revenues over the next 10 years.” The CBO published several reports looking at the budgetary impacts of a carbon tax.

However, the CBO’s carbon tax suggestion comes after French President Emmanuel Macron and lawmakers were forced to scrap plans to raise fuel taxes after weeks of violent protests. Those protests also spread to Brussels, where protesters clashed with police over fuel tax rises.

Tens of thousands of protesters, called “yellow vests,” took to the streets in November, sparked by a planned rise in diesel and gasoline taxes. The tax increases were part of Macron’s plan to wean France off oil and fight global warming.

Instead, the tax increases angered drivers who were already paying high fuel prices. A gallon of gas already costs about $7 in France, about half of which is made up of existing taxes. The yellow vests also vented frustrations about their dimming economic prospects. Protests are expected to continue in the coming days.

Macron initially resisted backpedaling on fuel taxes, but officially threw in the towel in early December. Macron’s concession hurt his image as an environmental warrior at the United Nations conference occurring in coal-hungry Poland.

Protesters did nearly $3 billion worth of damage to France’s economy, according to estimates, including in Paris, where violence broke out on several occasions. Protesters vandalized public monuments, broke windows, overturned vehicles, lit fires and clashed with police. Police arrested hundreds of protesters and at least four activists died in the rioting.

“Many estimates suggest that the effect of climate change on the nation’s economic output, and hence on federal tax revenues, will probably be small over the next 30 years and larger, but still modest, in the following few decades,” the CBO reported.

“Uncertainty about the effects of climate change — and the potential for unlimited emissions to cause significant damage — grow substantially in the more distant future,” the CBO contended.

The CBO estimated a carbon tax would raise over $1 trillion between 2019 and 2028 and reduce greenhouse gas emissions 11 percent more than under current law.

While some lawmakers introduced carbon tax bills, Democrats distanced themselves from such a policy in the wake of French riots. Democrats seem to be rallying around “Green New Deal” legislation supported by environmentalists and incoming New York Rep. Alexandria Ocasio-Cortez.

Top House Democrats, though, oppose a key part of the still vague “Green New Deal” — the creation of a special committee to handle the legislation.

Follow Michael on Facebook and Twitter