Liberals are the laggards expressing support for the single best policy we can pursue to reduce use of fossil fuels
by Mike Shatzkin
The single best step forward that we can take to wean ourselves from the fossil fuel energy that is warming the planet is getting a massive boost. The initiative, called “carbon-fee-and-dividend” by Citizens’ Climate Lobby, which first started pushing for their specific version of it over a decade ago, proposes to levy a fee on all fossil fuels when they enter the economy. It then refunds the money in equal shares to all residents or taxpayers (conceptually similar, but a nuanced difference between competing versions of the idea.)
That looks to me like “tax carbon and use the money as a down payment on a guaranteed annual income”. The first part creates a pricing reality that encourages every energy consumer to shift to non-fossil sources because the price is raised for any fossil fuel component. And the second gets the government into the business of writing checks to the people of our country, equal-sized checks to everybody.
This is not how the plan has ever been described by any of its proponents. Perhaps that is one of the reasons that liberals are the laggards in supporting it. This should not be.
CCL, which has been the most visible backer of this idea for over decade, has always been determinedly non-partisan. A bit over a year ago, a group of Republicans called Climate Leadership Council (CLC) and led by a Republican All-Star team including former Secretaries of State James Baker and George Shultz and senior Republican economists Gregory Mankiw and Martin Feldstein, proposed a version of the same idea. They called it a “Republican” solution because the fees being levied (no advocate will call it a “tax”) were intended to correct a market distortion, namely that fossil fuels create “externalities”, or costs — to health and environment — not priced into them. And because the money thus raised is distributed equally as dividends, government doesn’t grow, which pleases those who are committed to limiting government.
For the past 16 months, I have been trying to convince my liberal Democratic cohorts that what CLC is putting forth — and what CCL has always pushed — is really a LIBERAL plan. What else would you call an initiative that raises money by taxing coal, oil, and gas, and then writes equal-sized checks to everybody in the country? And the money is real. At the $40 a ton level the CLC proposed, gas would rise in price by about 40 cents a gallon and a family of four would receive a dividend of two THOUSAND dollars a year! That’s real money to a lot of people, and nowhere near what the additional cost of fossil fuels will mean for them.
I am really proud that my own group of Democrats, the Four Freedoms Democratic Club on Manhattan’s upper east side, allowed me to present a carbon pricing forum and then voted to explicitly endorse the Republican Baker-Shultz proposal. The Downtown Independent Democrats also did so. It was hard to get avowed Democrats to support something that was labeled a “Republican idea”, but the two Manhattan clubs saw the merit in it. (And they’re savvy: they also saw the political win in being bipartisan and surfacing the divide on this issue between Republican elders and the current crop of Republican office-holders.)
I have been lobbying elected Democrats personally with this idea — including Senator Claire McCaskill, Leader Nancy Pelosi, Congressman Beto O’Rourke, and a number of red-to-blue Congressional aspirants — and getting a receptive hearing. But, so far, no endorsements such as we got from the clubs.
But this week saw the real breakthrough celebrated in the lead to this piece, the formation of a new group called Americans for Carbon Dividends (AFCD.org) which is BI-partisan, rather than NON-partisan. It is headed by two former Senators: the Democrat John Breaux and the Republican Trent Lott.
But a glance at their page touting their supporters makes it clear that just about no liberals or environmental groups are among them. This may sometimes be an expression of reluctance, but it also may just be that the idea, though it has been in the conversation for many years, hasn’t been seriously considered yet by many liberals and environmental groups. But every liberal who really cares about saving the planet’s ability to enable human habitation from an impending fossil-fuel-caused disaster needs to wrap his/her head around this idea right now.
In a follow-up piece, I will lay out the reasons why I believe some environmental groups have been reluctant to support the fee-and-dividend concept and address the poison pills buried in it. But it is something to celebrate this week that a bipartisan effort is being launched to push this extremely worthy idea. The Citizens’ Climate Lobby has accomplished a lot with its non-partisanship, including creating a robust Climate Solutions Caucus in the House with over 30 members from each party.
But it is now time for BI-partisanship to get this essential step forward passed. There are definitely arguments to be had around the edges of the policy (more on that in a follow-up piece) but the essential components — putting a robust additional cost on fossil-fuel energy and returning the money raised equally to all Americans — are in place. By comparison to these two essentials, everything else is insignificant.
The sooner we get carbon-fee-and-dividend, the better. And it would seem right now that the fastest way to get us there would be to support Americans for Carbon Dividends.
