A GOLDEN OPPORTUNITY FOR DEMOCRATS TO SHOW SOME BIPARTISANSHIP ON CLIMATE CHANGE, AND FOR US ALL TO MAKE SOME PROGRESS
For 10 years, a non-partisan group of environmental activists called Citizens’ Climate Lobby has been pushing an idea they call carbon-fee-and-dividend as a potential bipartisan solution to the challenge of “putting a price on carbon”. Putting the costs of the “externalities” that fossil fuel burning imposes on all of us into the price of the carbon-based fuels themselves is widely seen as an essential step to start managing the excess of CO2 in our ecosystem. If we continue to burn fossil fuels as we have, we face a steadily increasing number of heat, sea level, and abnormal weather disasters.
CCL carefully framed its proposal so that Republicans who want “smaller government” could support it and, in fact, their lobbying strategy for success has always been to get Republicans to be the ones to propose a bill. Many Democrats reflexively resist the CCL formulation because it is “revenue-neutral”. Democrats active in this sphere tend to prefer “revenue-positive” carbon taxing, which means the taxing authority holds onto all or a large part of the money to allocate for investments in green energy.
Democrats have proposed a number of bills that tax carbon and reinvest the money, including from Senator Bernie Sanders in 2015.
I have supported CCL since I discovered its existence about a year ago — the revenue-neutral approach made immediate sense to me — and will be attending my second day of lobbying with them in Washington in November.
But, ten years on, there is no revenue-neutral or CCL-style refund bill. There has long been a very clear proposal from Citizens’ Climate Lobby, but there is no bill.
But while CCL never persuaded a Republican to propose its version of carbon tax, some Republicans have now come up with something remarkably similar on their own. About 10 months ago, a group of self-declared Republicans called Climate Leadership Council (CLC) — illustrious heroes of prior GOP administrations organized by Ted Halstead (who has a great Ted Talk on taxing carbon) and led by former State Secretaries George Shultz (who is also on the board of CCL) and James Baker and including prominent conservative economists Mankiw and Feldstein— put forth their version of the idea.
In a prior post, I compared the two proposals and made the case that either of them constituted a perfectly legitimate starting point for carbon taxing. If you care about comparing the two full refund proposals — CCL’s and CLC’s — the prior post spells out what are really the pretty subtle differences.
Which one should the climate-concerned support? For me the answer is very simple: the one we can pass the fastest!
And if that’s right, it calls for a change in strategy by climate activists. We’re mostly Democrats (I am a very active one). As CCL has been telling us for years, we should support a passable carbon tax, even a revenue-neutral one. Instead of waiting for Republicans to support the CCL version of a carbon tax, we Democrats — and, I would also hope, CCL itself — should embrace the Republican proposal. And when we lobby Republicans on the Hill, instead of asking them to support the CCL proposal, we should tell them how thrilled we’d be if they would just propose the CLC version!
If we do this, we could win twice. We might actually get a carbon tax, which is a victory we desperately need. And we’d also be legitimately seen as putting principle ahead of party by supporting a Republican proposal on a bipartisan basis.
As was spelled out in the prior post, the differences between the CCL and CLC proposals are probably less than meets the eye, particularly since either would be subject to subsequent amendment and improvement in the future. However, there is one aspect of the CLC proposal that most environmentalists and Democrats would want to amend and we should certainly try.
CLC’s red meat to the Republican world they live in is a repeal of some environmental regulations which, they claim (and they could be right) would be made unnecessary because raising the price of carbon would change behavior to make them moot. The Democrats should counter by proposing a phased elimination of the regulations, based on measurable reductions in CO2 pollution after the carbon tax goes in.
This is a negotiation that would test sincerity and goodwill on both sides. Democrats have to demonstrate that they’ll live without regulations when they are no longer necessary. And Republicans have to demonstrate that they are only calling for the regulations to be removed because they’ll no longer be necessary.
But the social “good” of a substantial carbon tax — and CLC starts theirs at $40 a ton, substantially higher than CCL’s $15 a ton — coupled with the refunding of the money to taxpayers by a formula that makes this a “profitable” tax for most people (a concept spelled out in detail in that prior post) — is so compelling that we shouldn’t even let making regulatory relief conditional stand in the way of passing it.
Democrats, educate yourselves! Worthy Republican elders have made a proposal so good that the current rank and file in their own party can’t even seriously entertain it. We have to force them to do so. And if Democrats supporting a proposal from Baker and Schultz doesn’t demonstrate that the issue is more important to us than partisanship, nothing will.
The American people will applaud.
PS added a few days after the post: It turns out there is one more stinker in the GOP/CLC plan that needs to be negotiated out: it immunizes the fossil fuel companies from lawsuits. Although a) it is not a slam dunk that such a lawsuit against fossil fuel companies would ever succeed and b) even if it could, it is far away and we need relief NOW, so c) I still think we’d accept it if it were the price for a full carbon-fee-and-dividend; it is, to say the least, a very unattractive feature and, like the relief from regulations, requires us to fight about the details before we pass Baker-Shultz.
