The conservative case for a carbon tax

A national tax could be imposed on oil imports as easily it is collected from U.S. oil and natural gas producers.
A national tax could be imposed on oil imports as easily it is collected from U.S. oil and natural gas producers. AP

Most days the news about climate change and the human response can be highly discouraging. President Donald Trump has picked climate skeptics, if not deniers, to lead the federal energy and environmental protection agencies, and the new U.S. president once called global warming a hoax cooked up by China.

Notwithstanding the Republican Congress’ seeming lack of reaction to Trump’s questioning the human factor in climate change, all is not bleak. A few retired Republican Party statesmen — including former Reagan-era secretary of state George P. Shultz and former secretary of state and treasury secretary James A. Baker III — and others with the conservative Climate Leadership Council went on record recently in support of a national carbon tax.

They think a carbon tax and dividend plan is the conservative answer to climate change. What makes their call interesting is that a carbon tax went to the Washington state ballot in November. Initiative 732 lost, which some Republicans like state Senate Majority Leader Mark Schoesler of Ritzville cite as a reason for lawmakers not to consider it.

But Baker, a Texan from oil country, and Shultz see the big picture more clearly. Their op-ed ran nearly two weeks ago in The Wall Street Journal, pointing out mounting problems and scientific evidence “that are growing too compelling” for U.S. political leaders to ignore.

Until now, mostly Democrats have wanted to take action on climate, recognizing what a clear majority of climate scientists do — the human contribution to a warming planet.

“The responsible and conservative response should be to take out an insurance policy. Doing so need not rely on heavy-handed, growth-inhibiting government regulations,” Shultz and Baker wrote. “Instead, a climate solution should be based on a sound economic analysis that embodies the conservative principles of free markets and limited government.”

They describe four pillars supporting their proposal. One is a tax that could start at $40 per ton of carbon and increase over time, providing a growing incentive for business, industry and individuals to use clean alternatives that don’t emit the greenhouse gases linked to global warming.

Secondly, Baker and Shultz suggest using the windfall to pay a “carbon dividend” to all Americans each year — potentially $2,000 for a family of four and larger over time if the carbon tax rate also grew.

Third, a national tax could be imposed on oil imports as easily it would be collected from U.S. oil and natural gas producers at the wellhead.

Lastly, and this is where these statesmen are liable to lose the attention of many Democrats, they would rely on free market forces to shift the nation’s dependence on high-polluting fuels.

They mention using carbon taxes to replace or scrap former President Obama’s Clean Air Plan for power plants, which is under court challenge, and shielding greenhouse gas emitters from tort liability.

Washington voters’ rejection of a carbon tax should not be the end of the story. There were many reasons why I-732 lost. Among them, Gov. Jay Inslee, a Democrat and a leading climate-action hawk, opposed I-732.

Inslee was joined by environmental and labor groups who wanted a different kind of tax system. Business groups were opposed, too, believing a national solution was merited.

But in 2017, Inslee has changed course. Just as he did with his cap-and-trade pollution fee for carbon emissions in 2015, he is proposing to use revenue from his version of a carbon pollution tax to boost state support of public schools and reduce local levies.

I-732, by contrast, sought to redirect some of collected taxes to cut manufacturing taxes and pay a state bonus to low-income, working families who qualify for the federal Earned Income Tax Credit.

Environmentalists and labor advocates critical of I-732 have said the carbon taxes should be reinvested in alternative energy projects and in low-income communities.

Others — including members of our own board — think a carbon tax should be used to assist those whose jobs are displaced in coal country, or to build mass transit systems along major corridors like I-5 that would address automobiles and trucks, which are our state’s major emitter of carbon emissions.

Whether Inslee is correct in tying this to education spending, is a question. In the end, there is a lot of disagreement to overcome.

That is why carbon tax is a good starting point for working toward eventual state and federal agreements that put a price on carbon emissions.

If national elder statesmen in the Republican Party can take this idea seriously, so should other Republicans in our statehouse and in Congress. The same goes for Democrats.