Levy on Carbon-Based Fuels Urged : Environment: Organization suggests cuts in income taxes and additional incentives to reduce pollution.

World governments should impose stiff taxes on carbon-based fuels and other causes of pollution in a concerted effort to safeguard the global environment and ensure continued economic growth, the Worldwatch Institute said in a report released Saturday.

To counter the disproportionate impact of these proposed “green taxes” on people with lower incomes, the United States and other nations should cut individual income tax rates, the environmental organization said in its eighth annual “State of the World” report.

The institute is a nonprofit organization that monitors global economic and environmental trends and attempts to project their future impact.

In the United States, a $100-per-ton tax on the carbon content of fossil fuels, including gasoline, coal and natural gas, would generate $130 billion a year, the institute said, allowing the government to cut income taxes by as much as 30% with no net loss of revenue.

“We aren’t talking about increasing taxes,” Lester Brown, the institute’s president and director of the report, said at a press conference.

In addition to imposing levies on carbon-based fuels that contribute to global warming, the institute advocated creating taxes designed to reduce other forms of air pollution, hazardous waste production, ground water depletion, pesticide use and deforestation.

Although some nations have imposed hefty taxes on gasoline and other fuels, the Worldwatch recommendations run counter to current Bush Administration policy. In a draft national energy strategy to be sent to Congress soon, the Administration pointedly rejects proposed taxes designed to reduce pollution and promote conservation.

The report’s authors contend that a carbon tax would significantly reduce fuel consumption, while requiring motorists and other fuel users to pay for a greater share of the environmental damage they cause.

“United States citizens are incurring costs of $40 billion a year from unhealthy air pollution levels,” said Sandra Postel, a co-author of the report. “At the gas tank, they are not paying for this.”

In addition, the report said, the tax would reduce emissions of carbon dioxide, the primary contributor to the greenhouse effect. Many experts believe that increased levels of carbon dioxide in the atmosphere are responsible for recent increases in global temperatures and will cause even more warming over the next several decades.

“1990 was the hottest year on record, and 1991 is not off to a good start,” Brown said.

Noting that the 1980s saw strong economic growth even as the world environmental situation became more perilous, the institute said that traditional economic yardsticks fail to take into account long-term environmental trends.

“In a decade in which stock prices climbed to record highs, so, too, did the mean temperature, making the ‘80s the warmest decade since record-keeping began more than a century ago,” the report said.

Since the first Earth Day in 1970, the world has lost significant amounts of tree cover, deserts have expanded, thousands of plant and animal species have died and the world’s human population has increased by 1.6 billion, the institute said.

“We are now in a situation where we see the economy affected more and more by environmental trends,” Brown said.

According to the report, the world economy is threatened by such environmental developments as famine in Ethiopia and Sudan, the destruction of the Aral Sea in the Soviet Union and decreased life expectancy in Eastern Europe caused by severe air pollution.

“Cleaning up after the fact is not going to be adequate,” said report co-author Chris Flavin.

The report called for adoption of a new standard of economic growth other than the gross national product, which it called “obsolete” because it only measures growth in output, and not the environmental quality of that output.

The report’s authors suggested that the new taxes be phased in over a 5- to 10-year period to lessen the effects on the economy.

“A phased-in tax would have a modest effect in the short run, compared to the gyrations in the oil price over the past two decades,” Brown said.

Last week, House Speaker Thomas S. Foley (D-Wash.) advocated a higher gasoline tax in order to fund highway repairs. “I think that it’s ridiculous that we don’t have a higher gasoline tax in this country than we have,” Foley said. Brown said the Persian Gulf War has temporarily diverted attention from environmental concerns. But once the war is over, he said, peace will “bring environmental sustainability back to center stage.”

“We’ve lapsed back into the 1970s, when we thought of energy policy in terms of security of supply,” Brown said.