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Originally published November 2, 2007 at 12:00 AM | Page modified November 2, 2007 at 4:16 PM

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Bloomberg to propose pollution tax at Seattle climate summit

New York Mayor Michael Bloomberg, a potential independent presidential candidate, proposed a national "pollution pricing" plan Friday that...

The Associated Press

SEATTLE — New York Mayor Michael Bloomberg, a potential independent presidential candidate, proposed a national "pollution pricing" plan Friday that envisions taxing companies directly for the greenhouse gases they release.

"If you really want to reduce carbon emissions, tax carbon at the source, which would mean at the mine head, at the oil well, whatever," Bloomberg said.

The money raised could be used to reduce payroll taxes or invest in new environmental technologies, such as wind power and fuel cells, he said.

The billionaire businessman was scheduled to discuss his plan in more detail at a luncheon speech to more than 100 mayors in town for a climate summit sponsored by the U.S. Conference of Mayors. He also was set to announce that he will travel to the Indonesian island of Bali next month to be a guest participant at the United Nations climate conference, where nations will start discussing a replacement for the greenhouse-gas-limiting Kyoto Treaty.

Bloomberg spoke briefly as he toured the Olympic Sculpture Park with Seattle Art Museum director Mimi Gates, the stepmother of Microsoft co-founder Bill Gates. Minutes after picking up a 13-month-old toddler, the Democrat-turned-Republican-turned-independent said his proposal for a national carbon tax should not be taken as an indication he'll run for president.

"It's an indication of the fact that as a New Yorker, we have to worry about 8.2 million people, the air they breath and the future that they're going to leave for their children," Bloomberg said. "I don't think there's any question that our society is polluting the air and damaging the planet. You have to reduce car emissions."

He also credited Seattle Mayor Greg Nickels and the other mayors meeting at the two-day climate conference, where city leaders are gathering to discuss promising strategies for reducing carbon emissions. He said that even if the federal government were doing much to combat global warming — which it's not — cities must take steps locally.

On his way out of the sculpture park, he pulled a $5 bill with a ripped corner from his wallet and dropped it in the donation box.

According to a copy of his prepared remarks, Bloomberg's pollution tax plan envisions a fee of $15 for every ton of greenhouse gas companies emit. It would be "revenue-neutral," meaning that the proposal includes a tax cut that would return $500 a year to the average taxpayer.

Greenhouse gases like carbon dioxide and methane essentially trap the sun's energy, warming the Earth's surface and lower atmosphere. In 2005, U.S. sources produced 7.26 billion metric tons of the gases.

Bloomberg's plan is similar to one already conceived by Democratic presidential hopeful Chris Dodd, who has outlined a $50 billion carbon charging scheme. By including a tax cut — specifically, reducing the payroll tax — Bloomberg also takes a page from Democrat Al Gore, another subject of endless presidential speculation. Gore addressed the mayors' conference Thursday.

Gore has repeatedly touted Dodd's idea and recently suggested incorporating a tax cut with it.

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Former President Bill Clinton also spoke Thursday at the climate summit, announcing that his foundation was teaming with Wal-Mart and the 1,100 cities represented by the Conference of Mayors to reduce prices of green technologies and products by buying in bulk.

Bloomberg, in his remarks, said the voluntary and unenforceable emissions targets favored by President Bush are "like voluntary speed limits — doomed to fail."

Bloomberg denies any plans to get into the presidential race, but he refuses to promise unequivocally that he will not run. In Seattle Friday, he said the country needs to make important choices.

"For too long, I've thought the political process tries to avoid dealing with those issues that don't have any easy, free solution," he said.

He also said another carbon-reduction approach, known as cap-and-trade, which many Democratic candidates have endorsed, is a flawed solution and open to abuse.

Under cap-and-trade, power plants or businesses that exceed pollution caps must buy or trade for additional allowances, usually from others that have been able to cut their emissions. While that system was effective in reducing acid-rain-causing gases, critics say such an approach with carbon would be ripe for gaming and could lead to economic windfalls for some of the biggest polluters, unless polluters are required at the beginning to buy credits at auction for how much carbon they want to emit. That is the type of system Sen. Barack Obama has proposed.

Bloomberg said cap-and-trade contains hidden costs: For example, if 100 companies release higher emissions than planned, they all have to purchase more credits, which creates a bidding war and costs companies more money.

He suggested that some politicians support cap and trade "because it obscures the costs."

A direct pollution charge "would be easier to implement and enforce — it would prevent special interests from opening up loopholes," he said.

Bloomberg was applauded by environmentalists on Friday for addressing the issue, but many said a carbon tax would be a heavy lift in Congress. A carbon tax also may be more predictable in its costs to businesses, but it would not guarantee the same benefits as an auction-style cap-and-trade.

Copyright © 2007 The Seattle Times Company

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