Fifty-two years after the first scientific warning to a U.S. president, the Republican Party still has no official policy to deal with climate change. They say it isn’t happening, or if it is, it’s not our fault, or if it is, there is nothing to be done about it anyway. At the highest level, climate change is said to be a fraud cooked up in China.
Of itself, political procrastination is not particularly startling, except for what’s at stake. Since 1965, CO2 levels have risen from about 320 to 404 parts per million, and climate chaos is becoming evident virtually everywhere. The gathering storm goes unnoticed by those much indebted to the largesse of oil and coal companies, whose de facto policy is to kick the can down the road. Republicans are the only major political party in the developed world to deny the reality of climate science.
This is not just foolishness or perhaps criminality, but very bad economic policy as well. The evidence consistently shows that higher prices for fossil fuels, such as a tax on the carbon content of fuels, stimulates energy efficiency, thereby saving money while promoting economic growth and technological innovation. Higher fuel prices, however, hit people on the lower income rungs the hardest. The solution is to rebate tax revenues back to those most disadvantaged by higher energy costs. Compared with cap and dividend proposals, a tax imposed at the mine mouth, wellhead, or port of entry is easier to administer and more effective. The one major drawback is the difficulty in predicting how much a given level of tax will reduce demand—what economists call the price elasticity of demand. Otherwise, nothing about a tax on fossil fuels is arcane or mysterious. The reluctance of Republican legislators to act lies elsewhere, perhaps in the realm of pecuniary psychology or invertebrate biology.
Whatever its cause, further procrastination is particularly unfortunate because the longer we wait to reduce the carbon loading of the atmosphere and oceans, the more difficult, expensive, and problematic it will be to extract ourselves from a self-inflicted and growing threat to the habitability of the planet.
In this vacuum, the Climate Leadership Council, headed by Ted Halstead, proposes to move the Republican Party to action. The council includes major establishment Republicans like James Baker, Henry Paulson, Martin Feldstein, George Schultz, Rob Walton, Thomas Stephenson, and economist Gregory Mankiw. Their proposal is straightforward: a gradually increasing carbon tax beginning at $40 per ton; dividends returned each quarter to the public; “border adjustments” to “protect American competitiveness” from countries with lower carbon taxes; and a rollback of “unnecessary” regulations. The Department of Treasury estimates that the plan would benefit 70 percent of Americans, and that a family of four would receive roughly $2,000 per year.
In essence, the plan is identical to one proposed to President-elect Jimmy Carter in November 1976 and many times in the years thereafter. It remains a sensible, realistic, and practical policy option. The major problem in the current proposal is the proposed phasing out of the EPA’s authority to regulate carbon dioxide and the repeal of President Obama’s Clean Power Plan. A steadily increasing tax on carbon, they say, would make both unnecessary and redundant. Perhaps so. But acceptance of the plan will be difficult, given the Republican Party’s ardent affiliation with fossil fuel interests and its stubborn denial of the severity of the problems posed by climate change. For Democrats and the few moderate Republicans remaining in Congress, the difficulty is one of trust in the super-heated and bizarre political environment of the Trump administration that includes sworn EPA enemy Scott Pruitt as the head of the agency, and former ExxonMobil CEO Rex Tillerson as the secretary of state. Need I mention the depth of climate denial in the White House?
On the other side, however, the Climate Leadership Council proposal coincides with the public preferences of 64 percent of Americans who tell pollsters that they are concerned about climate change. That number will likely grow as the reality of rapid climate change becomes increasingly apparent in our daily experience. If there is any desire in the Republican leadership to find common ground on important issues, the proposal from the council offers a way forward. It is conservative in the best sense of the word. It is practical. And the hour to act is very late.