The Post Editorial Pollution tax is not ready for prime time

Acarbon tax will likely need to play some role in the future of combatting climate change, but the city and county of Denver is poorly positioned to propose a pollution tax on Xcel energy bills of commercial and industrial properties this fall.

Voters would have the final say on the issue, but much more research and thought should go into this type of tax, specifically details about how the tax revenue will be spent once generated.

Denver City Council president Jolon Clark’s heart is in the right place. Scientists around the world tell us we have precious little time to curb our greenhousegas emissions before average global temperatures rise with catastrophic effects. The global goal once set by the Paris climate accord of keeping global warming this century to 1.5 degrees Celsius now seems impossible, especially with President Donald Trump telling the world that climate change isn’t real by taking actions to reverse previous progress toward reducing emissions.

However, Clark’s proposal does not seem ready for prime time.

Imposing a tax to change human behavior is often effective, especially when other methods have been tried and failed to produce the required outcome. But if we are going to use a stick to punish industrial and commercial businesses into reducing their energy consumption, we must make certain to provide the support necessary so those companies don’t simply move outside Denver city limits.

Clark’s bill is short on details of how the estimated $43 million a year generated by his 0.6 cent tax per kilowatt-hour of electricity would be spent. The Denver Post’s Andrew Kenney reported that the money would be used “to help residents and businesses cut their use of the energy grid.” But such a grant or incentive program needs to be meticulously laid out before the money comes streaming in, or it’s likely to be wasted away in a grab-bag, scattershot mess. If we’re going to inflict pain on businesses — an average of $3,200 a year for industrial and $1,400 a year for commercial — it must be well-executed and precise.

For example, we would think it wise to dedicate all of the money toward helping businesses reduce their utility bills, rather than siphoning some of the money to residential utility customers who aren’t paying the tax. Let’s offer a carrot as we offer the stick, similar to proposals that a carbon tax be refunded to Americans on a per-capita basis so it doesn’t adversely affect the poorest, who would be most unable to reduce their fossil fuel consumption. Such a program should offer more help for smaller businesses for whom adding solar panels or investing in more efficient machinery may be impossible.

We hope Clark will slow down this process and consider placing something on the next ballot, instead of rushing it through for this fall. And any such plan should take into consideration that Denver is surrounded by a sea of suburbs with open arms for commercial and industrial businesses that might be hardest-hit by such a tax. It would make sense to work with all Xcel Energy customers on the Front Range to see if a regional program could be implemented to greater effect and less detriment to this thriving city.