Environment Forum

A tax by any other name…

Can semantics help save the planet?

A showdown between leaders of Chevron Corp and the Sierra Club on Wednesday night revealed a number of shared beliefs between the two California institutions, particularly about the need for a transparent way of pricing carbon.

The debate at San Francisco’s Commonwealth Club on Wednesday night pitted Chevron CEO David O’Reilly against Carl Pope, executive director of the Sierra Club, and both agreed that limiting carbon emissions should involve some sort of levy imposed by the government – if only there was a word for such a thing.

“It would be much cleaner if there was a transparent cost on carbon that one could see,” O’Reilly said.

The moderator suggested that was a ‘tax’. “Nobody wants to talk about it,” O’Reilly replied. 

“Call it a fee,” Pope then suggested.

Chevron CEO sees smoke and mirrors in cap and trade

“If you liked credit derivatives swaps, you’re going to love cap-and-trade.”

One can presume that Chevron Chief Executive David O’Reilly is not a fan of the current deep worldwide recession — which was worsened by a credit-market lockup blamed in part on hard-to-value securities.

And, he made it very clear on Thursday that he is not enamored of the system the Obama administration hopes to use to reduce U.S. emissions of greenhouse gases including carbon dioxide, which are produced through the burning of fossil fuels sold by the No. 2 U.S. oil and gas company.

“It’s smoke and mirrors,” O’Reilly told a Boston business group. “Personally, I think it’s going to be a difficult system. I don’t think the American people trust it.”

A proposal working its way through the U.S. Congress would put in a place a cap-and-trade system that would give individual U.S. companies the right to emit certain quantities of greenhouse gases, which contribute to global climate change. Companies whose emissions are below their allotment could sell their extra rights to other companies.

The Obama administration in its budget proposal released on Thursday called for the initial emissions permits to be sold, rather than given away free. That would give businesses a financial incentive to reduce their emissions.

O’Reilly argued that an easier way to reduce emissions would be to raise taxes paid on gasoline for cars. He said Washington has embraced cap-and-trade to avoid the appearance of raising taxes.

California gas stations defy new pollution rule

Wednesday is the deadline for California’s gas stations to install sophisticated nozzles and hoses to control vapor emissions at the pump, and the Los Angeles Times reports that some one in five station owners are in open defiance of the new state order.

Gas station owners say that the new equipment is so expensive that buying it during the worst economic slump in decades would put them out of business.

“It may be necessary to protect public health, but it’s unaffordable,” James Hosmanek, who owns a Chevron station in San Bernardino, told the newspaper.

Hosmanek, who has already laid off eight employees as his business struggles to survive the recession,  said banks and equipment lenders have rejected his requests for some $60,000 in loans he would need to buy eight new nozzles and hoses and that “even if I could get the funding, I couldn’t make the payments.”

He told the Times that the owner of a Shell station down the street complied with the new order by putting the equipment on credit cards, a solution he calls “financial suicide.”

Hosmanek and his fellow resistance fighters are hoping for a last-minute reprieve with the help of California Gov. Arnold Schwarzenegger, who last week asked the state legislature to give the station owners another year to comply. And a Democrat Assemblyman has introduced legislation that would provide $8 million in grants to the stations.

But public health and environmental groups are fighting back, saying that the gas stations have long known the new rules were coming.