Conservatives push carbon tax to address climate crisis | RenewEconomy

Conservatives push carbon tax to address climate crisis

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A group of prominent US Republicans has proposed a carbon tax that pays cash dividends to Americans.

Former U.S. Secretary of State James Baker discussed a proposal for a carbon tax at the National Press Club in Washington on Wednesday. Credit: REUTERS/Kevin Lamarque
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Climate Central

With President Trump and Republicans in Congress moving swiftly to repeal regulations that slow global warming, a group of prominent conservatives on Wednesday touted a different potential solution — a carbon tax that pays cash dividends to Americans.

In a paper titled “The Conservative Case For Carbon Dividends,” op-eds in the New York Times and Wall Street Journal and a press conference in Washington on Wednesday, former advisors to presidents Nixon, Reagan, George H. W. Bush and George W. Bush argued for phasing out most of the EPA’s power to regulate carbon dioxide pollution and replacing it with a carbon tax.

Former U.S. Secretary of State James Baker discussed a proposal for a carbon tax at the National Press Club in Washington on Wednesday. Credit: REUTERS/Kevin Lamarque
Former U.S. Secretary of State James Baker discussed a proposal for a carbon tax at the National Press Club in Washington on Wednesday.
Credit: REUTERS/Kevin Lamarque

“Increasingly, climate change is becoming a defining issue for this next generation of Americans, which the GOP ignores at its own peril,” the eight prominent conservatives, including James Baker, Henry Paulson and George Shultz, each of whom held cabinet positions for Republican presidents, wrote in the report.

“The opposition of many Republicans to meaningfully address climate change reflects poor science and poor economics, and is at odds with the party’s own noble tradition of stewardship,” they wrote. “A carbon dividends plan could realign the GOP with that longstanding tradition and with popular opinion.”

The proposed carbon tax aims to turn around widespread Republican skepticism about climate action by touting a market-based tool that may be more amenable to conservative principles than government rules and regulations. About half of polled Trump voters recently said they’d support such a tax.

The White House was largely silent about the idea Wednesday, though a spokesman for Vice President Pence described it as a “good proposal” to the Washington Post. “It’s simple, it’s conservative, it’s free market, it’s limited government.”

Trump has taken office at a crucial time for the climate. The past three years have broken global heat records because of the effects of pollution from fossil fuels, farms and deforestation, worsening storms, floods and droughts. Nearly all nations agreed in late 2015 to a new approach to tackling climate change through a United Nations treaty.

Trump’s strong support for the fossil fuel industry and his vows to undo environmental regulations have heightened concern about the climate crisis, prompting liberal states and foreign leaders to vow to forge ahead with their own climate programs even without the cooperation of the U.S. government.

“I would personally be delighted if a carbon tax were politically feasible in the United States, or were to become politically feasible in the future,” said Harvard economics professor Robert Stavins. “At some point, the politics will change, and it’s important to be ready.”

The proposal for a $40-per-ton carbon tax is more straightforward than the cap-and-trade system backed by Democrats early in Obama’s first term, which was blocked by Republicans in the Senate. Environmental groups welcomed Wednesday’s paper but indicated they would oppose efforts to eliminate other climate rules and programs.

“Whether it’s the right plan or not, we certainly believe that there need to be conservatives at the climate discussion,” said Jeremy Symons, a government affairs official at the nonprofit Environmental Defense Fund who said he was still reviewing the proposal.

A carbon tax would help reduce the amount of heat-trapping pollution released by America's power sector. Credit: Kevin Dooley/Flickr
A carbon tax would help reduce the amount of heat-trapping pollution released by America’s power sector.
Credit: Kevin Dooley/Flickr

President Obama built and strengthened environmental protections during his eight years in office using the types of big-government approaches that are opposed by many conservatives, including rules limiting carbon dioxide pollution from cars and power plants in the years ahead.

Many of the climate-protecting programs in place in liberal states and abroad impose fees on climate-changing pollution, particularly carbon dioxide, mostly through cap-and-trade systems. Such systems impose caps on the amount of carbon pollution that can be released. Rights to release some of that pollution are sold to polluters are traded among them.

China is rolling out a nationwide cap-and-trade system this year, while officials in northeastern states and European lawmakers are debating options for raising prices, which would boost revenues and further reduce pollution.

British Columbia is among the governments that use a carbon tax instead of a cap-and-trade system to reduce pollution. The tax increases costs of fossil fuel energy, making cleaner alternatives more economically viable.

“A price on carbon is the best, most sensible policy for making sure polluters pay for the damages their — our — actions cause,” said Gernot Wagner, an environmental economist at Harvard who researched current cap-and-trade systems for the World Bank. “It helps ensure that prices reflect the full social costs.”

Wagner cheered Wednesday’s proposal but warned it would face political opposition.

“You need bipartisan support — you can’t get to 60 votes in the Senate without bipartisan support,” Wagner said. “If there are moderate Republicans proposing a sensible climate policy, it ought to be possible to get the Democrats on board.”

The proposed carbon tax would differ from most other systems of pricing climate pollution that are being put in place around the world. It would not impose a hard cap on pollution levels, such as those in place in Europe and California and parts of China. And the revenues would be disbursed to Americans as cash instead of being used to reduce electricity bills or fund environmental programs.

At a proposed price of $40 per ton for carbon dioxide emissions from coal, oil and other fuels, which would increase over time, polluting the climate in America would be more expensive than in most other places.

A family of four could expect to receive a payout of about $2,000 a year under such a system, according to the proposal, helping compensate them for rising gasoline, heating and other energy costs. The system could help reduce renewable energy costs in the long run by spurring more projects and more research.

“A conservative, free-market approach is a very Republican way of approaching the problem,” Baker told reportersduring a press conference before heading to the White House for a meeting on Wednesday. “We know we have an uphill slog to get Republicans interested.”

Environmental groups reacted cautiously to the proposal, welcoming the concept while expressing strong skepticism about the proposal to simultaneously eliminate many of America’s existing climate regulations. Green groups are already running campaigns and preparing and filing lawsuits to block Trump’s efforts to reduce energy industry regulations.

“Putting a price on carbon could be an important part of a comprehensive program,” Rhea Suh, president of the nonprofit Natural Resources Defense Council, which helped craft Obama-era climate regulations, said in a statement. “It can’t do the job alone, though, and is not a replacement for carbon limits under our current laws.”

Source: Climate Central. Reproduced with permission.

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  1. howardpatr 3 years ago

    Could it be that there is a ray of light amongst one or two Republicans?

    We will have to wait and see given Trump and the climate change deniers he has around him.

  2. Chris Drongers 3 years ago

    How to minimise avoiding the carbon tax? Not by asking everyone by asking how much carbon they emit but by putting the tax on the carbon feedstock. Even the oil that goes into plastic eventually comes back out when the plastic is burnt.

    $40/ton CO2 tax is about $13/ton of thermal coal. for natural gas, oil and coal need to add fugitive CO2 and methane emissions released during mining/drilling/transport.

  3. Ken Fabian 3 years ago

    Only the certainty that carbon pricing is a political impossibility makes these Republicans confident in suggesting it. To what extent there is any genuine commitment to it is debatable; cynic that I am, it looks like yet more raising of a bar too high by people who never had any intention of attempting to climb over it.

  4. DogzOwn 3 years ago

    Much better version of this in Washington Post, extract here:

    Baker and his colleagues estimate that the average family of four would receive $2,000 annually in dividends from the fee if it starts at $40 per ton, and as the tax rises, so would their dividends. This would naturally create a constituency for ever-tougher climate change action. They also assert that the proposal would be fundamentally progressive because everyone would receive the same amount of revenue from the tax regardless of their income level, meaning the new source of income would make a bigger difference for poorer people than for wealthier ones.

    A carbon tax is quintessentially conservative, Baker’s group argues, because it would not increase the size of government but would reduce it by canceling out President Barack Obama’s climate regulatory moves. Revenue from the carbon tax would go directly to taxpayers instead of toward new government programs…“This ticks every one of their boxes,” said Halstead. “It is pro growth, pro competition, pro jobs, deregulatory, and it will help the working-class voters that Trump promised to help.”

    Cap and Trade is just casino game to guarantee win for Trumpbull’s previous colleagues at Goldman Sachs, while the east of us lose.

  5. Goldie444 3 years ago

    The veteran climate scientist James Hansen proposed a carbon tax like this for the USA, with all tax receipts going back to the people on an equal basic, man woman and child. Republicans did not like it then.

    • Brunel 3 years ago

      That is what Gillard should have done.

      Have a sugar tax, coal tax, land tax – then give $10k/year to every voter who has a sub $25k income and $5k to those who have a sub $50k income.

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