U.S., China, Europe should tax CO2 - NASA expert

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OSLO, March 16 (Reuters) - U.S. President Barack Obama should seek an alliance with China and Europe to tax greenhouse gas emissions and abandon his plans for carbon trading, a leading U.S. scientist said on Monday.

James Hansen, director of NASA’s Goddard Institute for Space Studies, said the U.N.’s Kyoto Protocol had exposed flaws in a cap-and-trade plan favoured by Obama for fighting climate change.

An international tax of perhaps $1 per gallon (3.8 litres) of gasoline, he said, was simpler and better.

“We need stronger measures in terms of a price signal on fossil fuels,” he said during a visit to Norway. Two decades ago, Hansen alerted the U.S. Congress to risks of global warming such as floods, droughts and rising sea levels.

“My suggestion is that if Europe, the United States and China would agree on a carbon price, and the carbon price has to be significant … that would be enough of a signal to make a change in lifestyles,” he told a news conference.

He said China, which has overtaken the United States as top greenhouse emitter according to many experts, should also embrace a tax to help curb pollution and help diversify its economy away from fossil fuels blamed for stoking warming.

“They have every reason, the same as the United States and Europe, to want to move to a more energy efficient economy,” he told Reuters.

China and other developing nations say rich nations must do most to cut emissions because poor nations need to use more energy to grow their economies. U.S. emissions per capita are about four times those of China.

$3,000 EACH

The United States would raise an average of $3,000 per person per year in taxes under Hansen’s suggested $1 tax per gallon of gasoline that would serve as a benchmark for taxing fossil fuel emissions throughout the economy.

The receipts would be repaid equally to all adults — children would get a half share. Anyone cutting back and emitting less than the national average would make money since the $3,000 income would exceed their personal tax payments.

Obama favours a cap-and-trade market, along the lines of the EU’s market which sets caps for big emitters, such as coal-fired power plants, cement makers or oil refineries.

In such a market, industry has to hold a credit for every tonne emitted. If they overshoot their quota they have to buy extra permits and can sell if they undershoot.

Backers say such markets are more efficient because they put pressure on the big polluters to clean up.

“The key is to spur the technology revolution we need,” Norwegian Environment Minister Erik Solheim, who backs a cap-and-trade system, told a news conference with Hansen.

Hansen said countries inside the tax system could impose an import duty on products bought from outsiders.

In 1988, Hansen testified before a Senate committee that “the greenhouse effect has been detected, and it is changing our climate now.”