There is also an outside possibility that Congress’s struggle to avoid the fiscal cliff could bring another approach to the fore: a carbon tax. To avoid the automatic spending cuts and tax rises, lawmakers must find new ways to raise revenue. So far, the House has focused on closing tax loopholes, but those efforts are expected to come up short. As an alternative, a carbon tax has been quietly gaining traction in policy meetings, even among some conservatives.
“A carbon tax is certainly not likely as a starting point, but we think it could become extremely attractive if the lawmakers begin to run out of options for generating revenue,” says Mark Muro, a senior fellow at the Brookings Institution, a non-partisan think tank in Washington DC.
Although the idea of any tax — let alone one on carbon — is anathema to most conservatives on Capitol Hill, the idea offers something for everybody in the current budget crunch. A tax would reduce emissions and raise revenue for energy research and development — outcomes that environmentalists would welcome — and it would generate extra revenue that conservative lawmakers could use to offset lower tax rates on individuals and businesses.
In August, economists at the Massachusetts Institute of Technology (MIT) in Cambridge reported that the United States could raise $1.5 trillion over ten years and reduce emissions to 14% below 2006 levels by 2020 by instituting a tax of $20 per ton of carbon in 2013 and increasing it by 4% a year. Less than 20% of that revenue would be enough to fund a massive boost in federal investments in clean-energy research and development — from $3.8 billion in 2012 to $30 billion annually, Muro says. The administration has yet to weigh in on the idea, and some on Capitol Hill think that is just as well. If pushed prematurely, the idea could wither in the political spotlight before lawmakers have a chance to fully consider its merits. “We’re trying to generate interest,” a senior House aide told Nature. “The more discussion there is, the better.”
Basic research has historically fared well under Democratic and Republican administrations, but many university administrators were nonetheless relieved by the election’s outcome. They wondered whether Republican candidate Mitt Romney would side with other Republicans — including Paul Ryan, his running mate and chairman of the House budget committee — who advocate severe spending cuts to government programs as a way of reducing the deficit. “Thank God we don’t have to find out,” says Stewart Smith, dean for research at Princeton University in New Jersey.
Universities that receive grant money from federal science agencies are nonetheless bracing themselves for the fiscal cliff that awaits if Congress cannot reach a budget deal or find a way to extend the bargaining window before January 2nd. The administration’s Office of Management and Budget estimates that most funding agencies would have their budgets slashed by 8.2% in the absence of an agreement. Claude Canizares, vice-president for research at MIT, says that the result would be a loss of $40 million in research revenue at the university, which drew $619 million in research support in 2011. An 8% cut in funding to the US Department of Energy (DOE) would mean an 8% loss in staff at the DOE Princeton Plasma Physics Laboratory, of which Smith will become vice-president in January.
Advocates for biomedical research are equally concerned about the prospect of the cuts. “I don’t know how you spare anyone or anything” at the US National Institutes of Health (NIH), says Jennifer Zeitzer, director of legislative affairs at the Federation of American Societies for Experimental Biology in Bethesda, Maryland. The automatic cuts would slash the agency’s $30.7-billion budget by $2.5 billion, a portion of which would be exacted from every NIH institute and center.