Republican Statesmen Make The Case For A Carbon Tax (Don’t Hold Your Breath)

They’re right, but will elected Republicans and the new president listen to them?

Republican Statesmen Make The Case For A Carbon Tax (Don’t Hold Your Breath)
[Photo: Brina Blum via Unsplash]

Congressional Republicans don’t see climate change as a problem and they don’t like raising taxes. So, the idea of a carbon tax–that is, taxing carbon emissions–seems like an impossible non-starter. But amid a wider circle of non-elected Republicans, carbon taxes have long had admirers, and the notion that a Trump Administration might back a carbon tax isn’t completely off-the-wall (though still definitely unlikely). Secretary of State Rex Tillerson apparently backed a carbon tax while he was CEO of Exxon (though there’s conjecture about how sincere he was).


On Wednesday, several respected Republican figures met with White House officials to make the case. The group, including former Secretary of State James Baker and ex-Treasury Secretary Henry Paulson, proposed a simple quid pro quo: the elimination of Obama era climate regulations in exchange for a tax of $40 per ton of carbon.

The proposal is not necessarily a full-throated endorsement of climate science. Rather, it’s a hedge against the possibility that the science is right, Baker told the Washington Post. “I really don’t know the extent to which [climate change] is manmade, and I don’t think anybody can tell you with certainty that it’s all manmade.” But, he added, “the risk is sufficiently strong that we need an insurance policy and this is a damn good insurance policy.”

Importantly, the tax would be “revenue-neutral” and quite redistributive. All the money raised by the tax would be returned to American households in the form of quarterly payments. A report released by the freshly-formed Climate Leadership Council (CLC) estimates that families of four would receive about $2,000 a year. In effect, the carbon tax would be taking profits from emitters and giving them to everyday citizens, presumably providing a nice boost to consumer spending as that happens.

Economists on both the left and right have long favored carbon taxes over other climate policies (like, say, government investments in renewables, or cap-and-trade plans, like the European Union’s Emission Trading System). But they’ve disagreed about whether the money raised should be spent or given back to the public. The issue split the vote on a carbon tax ballot proposal in Washington State last November (leading to its defeat). But, more positively, a revenue-neutral carbon tax in British Columbia has proved how the idea can work. Emissions and fuel usage has fallen and at no noticeable cost to B.C.’s economy. Canada is now introducing a national carbon levy.

The CLC says the carbon tax would replace all of President Obama’s climate regulations and relieve polluters from possible future litigation over the effect of the carbon emissions on the environment. “Much of the EPA’s regulatory authority over carbon dioxide emissions would be phased out, including an outright repeal of the Clean Power Plan. Robust carbon taxes would also make possible an end to federal and state tort liability for emitters,” the report says.

Of course, all this may in fact be pie-in-the-sky. Trump campaigned on helping the coal industry, which might be badly harmed with a $40 a ton tax. Also, as we say, new-age Republicans hate taxes and have people like Grover Norquist threatening primary challenges should they renege on no-new-tax pledges. Still, one can dream. And at least the proposal shows possible middle ground on climate change. Airing the subject once again isn’t a complete waste of time.

About the author

Ben Schiller is a New York staff writer for Fast Company. Previously, he edited a European management magazine and was a reporter in San Francisco, Prague, and Brussels.