A YES FOR THE CARBON TAX? REALLY?

The appeal of this new idea from Congressman Dingell: The tax applies where it can be afforded. The downside: He has the carbon tax advocates and the environmentalists and when he convinces the house builders and realtors and home owners he may have something. NewEnergyNews can’t wait to report on the debate – if the proposal ever gets that far. The congressman seems to be daring his colleagues to do what is probably politically impossible.

‘Carbon tax’ gets green groups’ thumbs up; Energy-saving proposal to penalize owners of large homes and tax fuels is winning support from environmentalists
Kenneth R. Harney, October 14, 2007 (Washington Post via LA Times)

WHO
Rep. John Dingell (D-Mich.), chairman of the powerful House Energy and Commerce Committee; House Ways and Means Committee

Congressman Dingell's proposal is a great idea except for one small point: He isn't talking about a piece of paper, he's talking about the American Dream of Home Ownership.

WHAT
Dingell proposes a variation on the “carbon tax.” He suggests cutting back mortgage interest deductions on houses over 3000 sq ft, graduating upward to zero mortgage interest deductions on houses larger than 4200 sq ft.. Historic homes (pre-1900), farmhouses, certified energy-efficient homes and carbon-neutral houses may be excluded.

WHEN
- 2006-2010: $402.7 billion in mortgage tax deductions.
- Dingell says he wants to cut US emissions 60% by 2050.

WHERE
Dingell is from Michigan and has in the past staunchly defended the auto industry. But recently he called for a 50c/gallon gas tax as well as $50/ton tax on fossil fuels.

WHY
- The bill must get out of the House Ways and Means Committee to be brought before the full House for a vote. (NewEnergyNews: Unlikely.)
- 3000-3200 sq ft: 85% of mortagage interest deduction; 3600-3800=40%; 4000-4200=10%.
- Mortgage interest deductions are the US’ biggest tax writeoff.
- A Union of Concerned Scientists representative pointed out that this tax gets at residential emission problems which are a big and heretofore little addressed. A Friends of the Earth spokesman agreed.
- Advocates of the tax as a way to reduce emissions are also enthusiastic.
- National Assn. of Home Builders and National Assn. of Realtors oppose.

Dingell is right: Residential emissions are rising as fast or faster than any other electricity-consuming sector. But could this tax proposal be a ploy to get attention away from auto emission standards increases? (click to enlarge)

QUOTES
- Dingell: “[Though larger houses may be] more energy-efficient…sheer size, sprawl and commutes lead to dramatically more energy use -- or to put it more simply, a larger carbon footprint."
- Erich Pica, Friends of the Earth: “[The Dingell plan] overall is good…The mortgage interest deduction was meant to be an incentive for people to buy and afford a home, but now we see it has significant energy impacts…[the 3,000-square- foot cutoff] may be a little arbitrary, the intent is right."
- Charles Komanoff, Carbon Tax Center: "…we think Dingell's idea is terrific -- the carbon tax would give important incentives to minimize energy consumption."