The Hidden, Very Good Reason for the $10 Oil Tax

Doomed as it may be, an oil tax is a step toward redefining energy as a public good—for which everyone pays the cost of overuse and abuse.

by Arun Gupta

Going for broke with his final budget, President Obama recently proposed a $10-a-barrel tax on oil to fund a $32 billion annual investment in low-emission vehicles, public transit, and urban planning. It’s a bold proposal that could steer the economy toward a low-carbon future and revives the idea of a carbon tax that Obama proposed upon first taking office in 2009.

Back then, the carbon tax withered on the vine even though it could have done double duty to boost the economy while fighting climate change. This time Republicans pronounced the oil tax “dead on arrival.” But simply introducing the idea now can help make it a priority should Democrats retain the White House. It also affirms that government is better suited to reducing fossil-fuel usage than the market, which has been profiting off fossil-fuel consumption for hundreds of years.