Today’s blog post is courtesy of Citizens Climate Lobby:
In his State of the Union address, the President said, ‘If Congress won’t act soon to protect future generations [from climate change], I will.’ Republicans who wish to avoid more regulations should embrace the free-market approach of a revenue-neutral tax on carbon.
Saying that “for the sake of our children and our future, we must do more to combat climate change,’ President Obama used his State of the Union address to reaffirm his commitment to actions that will reduce greenhouse gas emissions.
“I urge this Congress to pursue a bipartisan, market-based solution to climate change,” said Obama. But with prospects appearing dim for legislation to price carbon, the President quickly added, “But if Congress won’t act soon to protect future generations, I will.”
While the President did not spell out “the executive actions we can take,” many observers assume the centerpiece of that plan will be to use the Environmental Protection Agency’s authority under the Clean Air Act to regulate greenhouse gas emissions. The EPA has already formulated rules for new power plants that will virtually rule out construction of coal-fired facilities. The President now intends to regulate emissions from existing power plants, a move that may require the closing of many coal-fired plants and produce howls of protest from GOP lawmakers.
Republican efforts to block such regulations are likely to be a waste of time and energy, given the Supreme Court has already ruled that the EPA has the authority to regulate greenhouse gases as pollutants.
Rather than curse the darkness, the GOP could light a solar-powered lamp. They can unleash the power of the marketplace to speed the transition away from fossil fuels and toward clean sources of energy. The mechanism to motivate that transition is a consumer-friendly tax on carbon that gives revenue back to households.
A number of conservative economists have endorsed this approach.
Art Laffer, President Reagan’s economic advisor has said, “By eliminating subsidies for all fuel types and making all fuel types accountable for their costs, free enterprise will make clear the best fuels for our future. Reduce taxes on something we want more of – income –and tax something we arguably want less of – carbon pollution. It’s a win-win.”
Greg Mankiw, economic advisor to President George W. Bush and presidential candidate Mitt Romney, also supports a revenue-neutral carbon tax, saying, “Economists have long understood that the key to smart environmental policy is aligning private incentives with true social costs and benefits. That means putting a price on carbon emissions, so households and firms will have good reason to reduce their use of fossil fuels and to develop alternative energy sources.”
The concept behind the carbon tax is simple: Polluter pays. There are many costs to society not reflected in the price of fossil fuels. These include the health costs of respiratory problems induced by air pollution, military costs to secure the shipment of oil from the Middle East, and costs to repair damage from weather-related disasters that are becoming more frequent and destructive because of global warming. A tax on carbon begins to take these costs into account, ultimately making clean energy the cheaper and preferable option.
What would a simple and effective carbon tax policy look like?
- Start with a tax on coal, oil and gas of $15 per ton on CO2 that each fuel will emit when burned. The result at the gas pump would be an additional 13 cents per gallon.
- Increase the tax by $10 a ton each year.
- Implement the tax at the fuel’s first point of sale – the mine, wellhead or port of entry.
- Take the revenue from the carbon tax, divide it equally among everyone in the U.S., and return it to consumers, preferably as monthly or quarterly “dividends.”
- To protect American businesses from unfair foreign competition, apply border tariffs on goods coming in from countries that do not have comparable carbon pricing.
The tax, which is imposed upstream at the first point of sale, will eventually be passed down to consumers. By returning revenue to households, we protect consumers from the economic impact of rising energy costs associated with the carbon tax. At the same time, these rising costs influence consumer choices, like making their homes more energy efficient or purchasing vehicles that are more fuel-efficient.
By motivating clean-energy investments in the private sector, federal subsidies to spur the development of solar, wind and other technologies will eventually be unnecessary. Yet another reason Republicans should want to embrace a revenue-neutral carbon tax.
The provision of border tariffs in such legislation does far more than protect American businesses. Republicans often reject national policies to reduce greenhouse gas emissions with the argument that our efforts will make no difference if other countries aren’t doing the same. Senator Rubio’s stance, reported in a BuzzFeed interview Feb. 5, is typical:
“Anything we would do on that would have a real impact on the economy but probably, if it’s only us doing it, would have a very negligible impact on the environment. The United States is a country, not a planet. If you did all these things they’re talking about, what impact would it really have?”
A border tariff would negate that argument. If companies doing business with the U.S. must pay a duty on carbon, trading partners like China and India will prefer that the revenue is deposited in their own treasuries rather than given to the United States. Carbon tariffs, thereby, become a strong incentive for other countries to follow the U.S. lead and implement their own carbon tax.
The President has made it clear that, one way or another, America will “respond to the threat of climate change.” The question is whether that response is through expansion of government regulations or through the power of the marketplace. Republicans, who abhor the former, should embrace the latter with a revenue-neutral tax on carbon.
Stop the phony ‘debate’ about climate science
Republicans would find it easier to discuss climate solutions if they accepted the conclusion of nearly every scientific study done on global warming: It’s happening, and human activity is the primary cause.
Senator Rubio, like a number of his colleagues, continually casts doubt on climate science with statements like this:
“Well, first of all, the climate’s always changing. That’s not the fundamental question. The fundamental question is whether man-made activity is what’s contributing most to it. And I understand that people say there’s a significant scientific consensus on that issue. But I’ve actually seen reasonable debate on that principle.”
Reasonable debate? Let’s direct the senator’s attention to the following pie chart:
Jim Powell, who was a member of National Science Board for 12 years,[1] conducted a search of peer-reviewed climate change articles from 1991 to 2012. Of the 13,950 articles he reviewed, only 24 “clearly reject global warming or endorse a cause other than CO2 emissions for observed warming.”
The visual representation of Powell’s study should end all discussion. We must waste no more time debating the existence and cause of climate change. Attention must now focus on solutions.
Disasters awaken public to climate reality
At the beginning of the year, the U.S. government confirmed what most Americans already knew: 2012 was the hottest year our nation has ever experienced, shattering the previous record set in 1998 by a full degree. That record heat contributed to a host of disasters that awakened many to the harsh consequences of a warming climate.
It started last year with wildfires in the West. Trees, ravaged by drought and insects thriving in warmer temperatures, became kindling for infernos that consumed more than 9 million acres across the U.S. In one horrific episode, a wall of flame swept into Colorado Springs and reduced 346 homes to ashes.
Then came the drought. At its peak last summer, 65 percent of the U.S. was experiencing moderate or worse drought conditions. The impact on the agricultural sector has been devastating, as corn crops withered and grass used to feed cattle fell into short supply. Deutsche Bank Securities Inc. estimated the drought reduced U.S. gross domestic product between 0.5 and 1 percent. Damage estimates range between $75 billion and $150 billion. Dust storms across the Great Plains conjure images of the Dust Bowl days of the 1930s.
More and more Americans became aware that something was wrong last spring when record-breaking high temperatures in early March gave way to scorching heat in the summer. Jaw-dropping images of the record ice loss in the Arctic (at left) provided further evidence that our world is heating up.
Climate change really hit home, however, with the arrival in late October of Superstorm Sandy, which inflicted damage in excess of $60 billion. Recovery and cleanup efforts continue months after the storm roared ashore. The influence of global warming was evident in Sandy’s intensity, size and path.
Hurricanes, floods, droughts, heat waves, and wildfires are all naturally-occurring phenomena that happened long before the current rise in global temperatures. What’s different is that our weather is now “juiced” – much like a baseball player on steroids – by a warmer climate, increasing the odds that severe weather will strike with greater intensity. Climate Central has an excellent series of short videos – “Extreme Weather 101” – explaining the impact of climate change on drought, heat waves, snowfall and rainfall.
If this is what our world looks like with barely 1 degree Celsius of warming in the past century, what hellish future awaits us if average global temperatures climb 4 degrees C or 6 degrees C (11 degrees Fahrenheit), as a number of studies have predicted?
The longer we delay action to address climate change, the more difficult and costly it will be to reduce greenhouse gas emissions to levels that prevent us from breaching the 2 degress C threshold of global warming considered manageable by most scientists. Despite the toxic atmosphere in Washington, Democrats and Republicans must work together to enact legislation that will put a price on carbon, one that will speed the transition from fossil fuels to clean sources of energy.
[1] First appointed by President Reagan and then by President George H.W. Bush.
