Obama Proposes Oil Tax and Clean Energy Infrastructure Investments

President Obama has recently proposed an oil tax and a clean energy infrastructure investment plan that would create a “more integrated, sophisticated and sustainable transportation sector.” The proposal is part of a budget request that calls for annual spending of $32 billion and it will be paid for with a $10 a barrel oil tax. The ten year 320 billion is designed to finance a 21st century clean energy infrastructure in the US. This includes annual spending of $20 billion for national transportation initiatives, $10 billion in for cities and states and $2.4 billion for green vehicle research.

The President’s proposal is in addition to his successful push to raise fuel-efficiency standards for cars and trucks, green energy subsidies and the clean power plan that will reign in carbon pollution from power plants. He has also succeeded in pushing through a global climate deal in Paris.

This proposal would reduce emissions from the transportation sector which is responsible for almost a third of US carbon emissions. Transportation sector investments include among other things, high speed rail. There are also investments in what is known as the Transportation Income Generating Economic Recovery (TIGER) stimulus program. TIGER awards grants for transportation projects with “measurable economic and environmental benefits.” Another $10 billion a year would go to local, regional and state governments to invest in green infrastructure and more livable cities. The Climate Smart Fund would reward states that make greener choices with existing federal dollars, as well as competitive grant programs to promote region-wide planning, more livable cities, and infrastructure projects with greater resilience to climate impacts.

In addition to the tax on oil and clean infrastructure investments, the Obama administration is also creating private sector incentives for low carbon technologies. Together these cleantech investments will not only enable the US to transition away from fossil fuels they will create jobs and grow the economy.

Despite the fact that Obama’s plan would supply jobs, drive the economy and advance climate action, Republicans can be counted on to kill the proposal. While environmental groups lauded the fact that Obama is standing up to big oil and putting a price on carbon pollution. Conservatives,well known for their opposition to climate action, say that they are concerned that gas prices could increase by as much as 25 cents a gallon.

“President Obama’s proposed $10 per barrel tax on oil is dead on arrival in the House,” Majority Whip Steve Scales (R-La.) said in a statement. “The House will kill this absurd proposal.”

The oil industry, which has seen declining profits is also pushing back against the plan spinning the proposal as a jobs killing tax grab that will hurt consumers.

“The White House thinks Americans are not paying enough for gasoline, so they have proposed a new tax that could raise the cost of gasoline by 25 cents a gallon, harm consumers that are enjoying low energy prices, destroy American jobs and reverse America’s emergence as a global energy leader,” American Petroleum Institute President Jack Gerard said in a statement.

The White House does not deny that the President’s clean transportation proposal would increase fossil-fuel prices, however they said that this would create “a clear incentive for private-sector innovation to reduce our reliance on oil and invest in clean-energy technologies that will power our future.”

There is little chance that Republicans will turn on their petrochemical puppet master. However, a future administration and legislators with more common sense will eventually get behind the initiative.

Related Posts
Low Oil Prices and Climate Action (carbon pricing and subsidies)
Market Based Approaches to Combating Climate Change
China Carbon Pricing and US Climate Cooperation
 Market Based Green Growth
 US States Show Carbon Pricing Works
 Corporate Actions Buoy US Carbon Pricing
 A Compelling Argument for Carbon Pricing
 We Can Reduce Emissions and Tackle Climate Change
Curbing Fossil Fuels – Carbon Pricing and an End to Subsidies (WEF Summaries)
The Prospects for Putting a Price on Carbon
RGGI States’ Third Consecutive Year of GHG Declines
The Merits of Carbon Pricing in B.C.
Video – Why a Carbon Tax May be the Best Way to Reduce CO2

All I Want is a Price on Carbon
Hansen on How the GOP Could Support a Carbon Tax
World Bank President Advocates Putting a Price on Carbon
California’s Cap-and-Trade Leadership
South Korea Passes Cap-and-Trade Legislation
Mexico Passes Climate Change Law
US Cap-and-Trade: What and Why
US Cap-and-Trade: Obstacles and Solutions