A group of elder Republican statesmen — including former Secretaries of State James Baker III and George Schultz, along with former Secretary of the Treasury Henry Paulson — have announced a new “conservative” plan to combat climate change. In an op-ed in The New York Times, their colleagues propose a new tax on carbon emissions, which they said would “steadily increase.” All funds captured from this tax, which could raise $200-300 billion per year, would be redistributed back to the public through the Social Security Administration in the form of a check to every taxpayer. They called this a progressive tax, as it would benefit poorer Americans more than wealthy ones. The tax would replace all Obama-era regulations on the climate. This appears to the first serious proposal from any Republicans to address the looming threat of climate change.
Here are the key aspects of their proposal:
“First, the federal government would impose a gradually increasing tax on carbon dioxide emissions. It might begin at $40 per ton and increase steadily. This tax would send a powerful signal to businesses and consumers to reduce their carbon footprints.
Second, the proceeds would be returned to the American people on an equal basis via quarterly dividend checks. With a carbon tax of $40 per ton, a family of four would receive about $2,000 in the first year. As the tax rate rose over time to further reduce emissions, so would the dividend payments.
Third, American companies exporting to countries without comparable carbon pricing would receive rebates on the carbon taxes they’ve paid on those products, while imports from such countries would face fees on the carbon content of their products. This would protect American competitiveness and punish free-riding by other nations, encouraging them to adopt their own carbon pricing.
Finally, regulations made unnecessary by the carbon tax would be eliminated, including an outright repeal of the Clean Power Plan.”
In the op-ed — which was co-authored by Martin Feldstein and N. Gregory Mankiw, two former heads of the President’s council of economic advisors; Ted Halstead, Climate Leadership Council, and Harvard economist and former head of the White House; and co-signed by Thomas Stephenson, a partner at Sequoia Capital, a venture-capital firm; and long-time Walmart chairman Rob Walton — they argue their plan would “achieve nearly twice the emissions reductions of all Obama-era climate regulations combined.”
The authors believe that “environmentalists should like the long-overdue commitment to carbon pricing. Growth advocates should embrace the reduced regulation and increased policy certainty, which would encourage long-term investments, especially in clean technologies. Libertarians should applaud a plan premised on getting the incentives right and government out of the way. Populists should welcome the distributive impact.”
A carbon tax has been a long-time goal of climate scientists and environmental leaders, like former NASA scientist James Hansen and former Vice President Al Gore, environmental organizations, and even some oil and gas companies.
Noah Kaufman, a climate economist with the environmental think tank World Resources Institute, told The Houston Chronicle: “It’s incredibly promising, the proposal itself and the fact that prominent, serious Republicans are doing the proposing. You don’t know exactly how people would respond, but it looks like it would actually cause quite a bit more reductions than (Obama’s) Clean Power Plan.”
But not everyone supports a full-scale repeal of all climate regulations. According to The Washington Post, Natural Resources Defense Council (NRDC) president Rhea Suh said: “Putting a price on carbon could be an important part of a comprehensive program. It can’t do the job alone, though, and is not a replacement for carbon limits under our current laws.”
The op-eds many authors present their proposal as an opportunity to enshrine a conservative approach. “Republicans are in charge of both Congress and the White House. If they do nothing other than reverse regulations from the Obama administration, they will squander the opportunity to show the full power of the conservative canon, and its core principles of free markets, limited government and stewardship. This would be pro-growth, pro-competitiveness and pro-working class, which aligns perfectly with President Trump’s stated agenda.”
In an interview with The Washington Post, Baker echoed a common Republican stance on climate science: “I really don’t know the extent to which it is man-made, and I don’t think anybody can tell you with certainty that it’s all man-made.” But he also seemed to argue Republicans have a responsibility to address the issue: “The risk is sufficiently strong that we need an insurance policy and this is a damn good insurance policy.”
It’s unclear whether their proposal will win support in the Trump administration or the Republican-controlled Senate and House. But it’s important to note Republicans are legally obligated under the Clean Air Act to regulate carbon emissions and if they seek to repeal Obama’s clean power plan, they must replace it with something else.
A number of Republican Senators and conservative groups have come out against the proposal, but former Presidential nominee Mitt Romney has pledged his support. Baker just met with senior leadership at the White House, including Gary Cohn, head of Trump’s National Economic Council, White House chief of staff Reince Priebus, and counselor to the president Kellyanne Conway.
But, looking to the public, Americans are increasingly clear they want action on the climate. A recent survey from the Yale Program on Climate Change Communication found that “two in three registered voters (66 percent) support requiring fossil fuel companies to pay a carbon tax and using the money to reduce other taxes (such as income tax) by an equal amount – a plan often referred to as a ‘revenue neutral carbon tax.’ 81 percent of Democrats, 60 percent of Independents, and 49 percent of Republicans support this policy.” See more survey results.