Industrial Energy Efficiency and Corporate Tax Reform: Two Proposals

It is anchored to the numerous steps within the production process, from the extraction of materials, chemical feedstocks, and energy resources themselves to the processing and fabrication of the final goods demanded by other sectors of the economy. [...] The increase in investment would be shared by all other sectors 2 A quad is a quadrillion (1015) Btu’s of energy, about the amount of energy used in all sectors of the economy by the state of Arkansas, Kansas, or Oregon in a year. [...] For example, if steam is derived from burning coal, is the consumption of coal taxed, or the consumption of steam? If the steam is created by burning natural gas, is the tax rate the same? Assessing a tax as close to the beginning of the fossil fuel energy supply chain as possible would do much to simplify collection and resolve the issues mentioned above, though it would then start to look more l. [...] Potential to Save Energy To the degree that energy efficiency will be a component of efforts to reduce carbon dioxide emissions, a carbon tax is a very promising mechanism to drive down the energy intensity of the industrial sector as there is a straight forward market signal that encourages less use of energy. [...] It is in the long-term interest of the nation to use energy more efficiently and so it is also in the best interest of the county to have a tax code that encourages energy efficiency for the long term.