"At least we need an insurance policy," asserts a sedate proposal by conservative luminaries for a "carbon tax" responding to climate change. Why? "While the extent to which climate change is due to man-made causes can be questioned, the risks associated with future warming are too big and should be hedged."
Thus does the Climate Leadership Council (CLC) melt its own glacier.
Three advantages
In general, taxation of carbon dioxide-not carbon-offers three advantages. It responds to political pressure to act in response to climate change. It can accomplish its goal, which is to shift investment and consumption away from fossil energy. And it's politically more honest and less susceptible to chicanery than the traditional alternative, cap-and-trade.
The CLC addresses standard worries about CO2 taxation. It stipulates that proceeds from the tax, beginning at $40/ton of CO2, be rebated to Americans in quarterly "dividends." In policy-making vernacular, therefore, the program would be "revenue-neutral." The program would include "the elimination of regulations that are no longer necessary upon the enactment of a rising carbon tax whose longevity is secured by the popularity of dividends." The CLC mentions "outright repeal of the Clean Power Plan." And it includes border adjustment to preserve American competitiveness.
With due respect, can CLC members be serious? To suppose the government would refrain from claiming some, most, or eventually all of a money stream starting near $300 billion/year is wishful. No less so is the suggestion that a new tax now would prevent more CO2 regulation later.
Indeed, even with an escalating CO2 tax, more regulation-and more cost-would be inevitable. In testimony to a House committee a year ago, John R. Christy, director of the Earth System Science Center at the University of Alabama in Huntsville, demonstrated the scale of the challenge. If all emissions by the US had fallen to zero on May 13, 2015, the date of the hearing at which he first presented the illustration, global average temperature would fall by only 0.05-0.08° C. over 50 years-less than the amount by which temperature fluctuates month to month. His calculations used assumptions and tools from modeling by the Intergovernmental Panel on Climate Change. Some scientists say temperature observations indicate the models exaggerate warming.
A carbon tax won't do much about warming. As an insurance policy, therefore, it's limitless cost for limited protection. Supporters might argue that rebating taxes-assuming that would happen-nullifies the cost. But that observation ignores economic harm from tilting the energy mix toward higher cost, distortions of focusing taxation on a narrow base, and wealth foresworn by discouraging development of fossil-energy resources.
Because taxation of CO2, even with proceeds rebated, would impose economic pain, Americans deserve a balanced discussion of benefits relative to costs. Indeed, balanced discussion would be a refreshing change in climate politics, which long ago degenerated into name-calling and intolerant moralizing.
Science itself has fallen subject to suspicion of politicization. To cite just one recent example, House Science, Space, and Technology Committee Chairman Lamar Smith on Feb. 14 requested information from the National Oceanic and Atmospheric Administration about a study purporting to disprove the existence of a recent pause in observed warming. An NOAA whistleblower has alleged the study ignored NOAA standards and was rushed into publication to influence the Paris Climate Summit of 2015.
Better risk assessment
The CLC probably won't notice. "The opposition of many Republicans to meaningfully address climate change reflects poor science and poor economics," asserts its proposal. Yet science, poor or otherwise, shows a carbon tax by itself won't "meaningfully address climate change" if the standard is substantial temperature change. And to dismiss the certainly painful costs of effecting substantial change as "poor economics" is demonstrably poor politics.
Before calling on Americans to make sacrifice, the CLC should have made its "insurance policy" conditional on a better assessment of risk than now-amid all the acrimony-is at hand. "Too big" isn't good enough.
