Column: Carbon limits will help environment and economy, and even better if paired with a “carbon tax”

Column: Carbon limits will help environment and economy, and even better if paired with a carbon tax

President Barack Obama proposed a new set of carbon limits on Friday, kickstarting a program he’s been meaning to implement since his second inaugural address. They are meant to be more of a compromise than his first proposal, which was shot down by Republicans in Congress. This new proposal, however, seems to have more traction within the political community, and will hopefully see implementation within the year. The goal of the new plan is to limit new gas-fired power plants to 1,000 pounds of CO2 emissions per megawatt-hour of electricity, and to limit new coal powered plants to 1,100 pounds of CO2 per megawatt-hour (the current emission standard is 1,800 pounds per megawatt-hour for a coal driven power plant). This reduction is twofold: First, it dramatically cuts down on the amount of carbon dioxide emitted into the atmosphere by the United States, which would help reduce the effects of global climate change and make America a much greener nation. Secondly, the carbon limits will start shifting America away from its coal dependency, instead moving towards natural gas. This would be monumental, since it would lead America towards a much more reliable and sustainable energy source that can both mitigate climate change and stimulate American growth. There are massive deposits of natural gas all across the United States, so utilizing that technology will only kickstart the economies of rural locations more. In fact, this phenomenon can be seen already in parts of North Dakota where fracking is used extensively. Energy companies come in, invest heavily into the town to create infrastructure, living space, and opportunity, and then provide job spaces for the local residents. Having more upstarts like this can only have a positive effect on the American economy, as more people will be become consumers even while they are helping the rest of society.

The new carbon limits are great, but there is a next step that must be taken to ensure the best possible outcome. With the current proposal, there are no clear-cut repercussions if a company wouldn’t comply. As a result, it seems to be fairly easy for a large energy company to simply not reduce their emissions without being reprimanded. Instead, the government needs to enlist a form of ‘carbon tax,’ meaning they fine, or tax, a company for exceeding a certain level of CO2 emissions. On the flip-side, the government can offer tax cuts or monetary relief for companies that reduce their carbon dioxide emissions to a certain level below the required rate of 1,100 pounds per megawatt-hour. This is the direction for the future, as it would ensure a shift from coal to natural gas and would help combat climate change effectively. Carbon limits are a good start, but enforcement and incentive need to follow, and quickly at that. If this proves to be a hollow limitation, no one will benefit and Mr. Obama will lose a great deal of credibility. So for his sake, I hope that he installs carbon taxes to go along with his carbon limits.