"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 Friday while addressing more than 100 other mayors at a climate summit sponsored by the U.S. Conference of Mayors.
He suggested a fee of $15 for every ton of greenhouse gas companies emit, with the money used to reduce payroll taxes and finance tax credits for companies that reduce their greenhouse gas pollution.
Greenhouse gases such as carbon dioxide and methane trap the sun's energy, warming the Earth's surface and lower atmosphere.
Bloomberg's plan is similar to one already proposed by Democratic presidential hopeful Sen. Chris Dodd of Connecticut.
Bloomberg said the voluntary and unenforceable emissions targets favored by President Bush are "like voluntary speed limits doomed to fail."
He also said another carbon-reduction approach known as cap-and-trade, which many Democratic candidates have endorsed, is a flawed solution and could create bidding wars.
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.
Tony Kreindler, a spokesman for Environmental Defense, said it would be tough to push a carbon tax through Congress and it would not guarantee the same benefits as cap-and-trade.
"It's not a baseless solution, but when it comes to fixing climate change, by far the best option is cap-and-trade," Kreindler said.
As many as five climate-change bills have been floated by various senators. The trend, says, the Washington Post, reflects a growing consensus on Capitol Hill for a cap-and-trade system to achieve mandatory reductions in greenhouse gas emissions.
In a recent editorial it noted, "Beginning in 2012, industry would need allowances to emit greenhouse gases. The government would give some of those away and auction others, with the freebies declining over time. Putting a price on pollution would encourage efficiency. Meanwhile, money raised by selling allowances would go toward technologies to reduce carbon emissions, toward helping low- and middle-income Americans cope with rising energy prices, and toward training workers in emerging technologies.
"A carbon tax would be more straightforward. With cap-and-trade, there's potential for games, fraud, evasion and abuse. Some companies could earn windfall profits, and the price volatility of emissions allowances could be disruptive. But we also understand the upside of a cap-and-trade system. It would give industry and the American people time to transition to the greener reality they're facing. It would allow the government to set a goal for total emissions. It could fit into an international market. Most of all, it's politically more plausible. A carbon tax is unthinkable for most in Congress."
But the newspaper also admits the Bush government is unlikely to approve of even the most modest of the climate change bills and warns that waiting for the current presidency to come to an end could prove terribly costly for planet earth.