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August 10, 2014 5:41 AM Everything Changes, Part II

By D.R. Tucker

The Boston Globe notes that despite its obvious economic and moral merits, there are certain individuals who haven’t—yet?—embraced the idea of putting a price on carbon through a revenue-neutral carbon tax or, more precisely, a rebated carbon fee:

What if you just returned all the carbon tax money to the economy? The revenue could be returned to taxpayers with dividend checks, or it could be used to lower other taxes on individuals or businesses. Either plan would effectively be taking money from the biggest polluters and plowing it back into the economy.
In the past few years, this so-called revenue-neutral carbon tax has garnered support from a wide spectrum of political and economic interests. It includes climate scientists such as James Hansen, who sits on the advisory board of a national carbon-tax advocacy group called Citizens’ Climate Lobby; but also economist Arthur Laffer, who was Ronald Reagan’s economic policy adviser; former Republican treasury secretary Henry Paulson; and even ExxonMobil. While many liberal supporters of “revenue-neutral” carbon-pricing would be just as happy if the money came from a so-called cap-and-trade scheme (setting a cap on emissions, and then auctioning tradable emissions permits), there’s very little conservative enthusiasm for mandating a strict cap on emissions.

And why is that?

Despite the growing and bipartisan support for raising the price of carbon among economists and policy wonks, it’s still a political nonstarter for many conservatives for several reasons. Many, of course, simply aren’t convinced that climate change is a serious threat. They also argue that unilateral emissions cuts by the United States (responsible for about 15 percent of global emissions) would hurt national competitiveness while having little effect on global climate this century. And they scoff at the idea that the government could actually be trusted to return tax revenue.
“It’s a sucker’s game for conservatives,” says David Kreutzer, a research fellow in energy, economics, and climate change at the [Koch-funded] Heritage Foundation. “In [Washington] D.C., I’ve come to realize that a revenue-neutral tax means they promise to spend all the money.”
As a result, in the past five years, only two bills advocating a carbon tax or emissions cap have had Republican sponsors. One of those was from Bob Inglis, a congressional representative from South Carolina, who introduced the “Raise Wages, Cut Carbon Act” in 2009 and lost his seat to a [Tea Party] primary challenger in 2010. Two years ago, Inglis founded the Energy and Enterprise Initiative to make the conservative case for a carbon tax, arguing that a tax that leaves solutions to the marketplace is preferable to stricter government regulation. “Free enterprise can fix climate change, because innovation can happen rapidly, and it will be driven by consumer demand, not by dictate,” Inglis says.
Writing in support of the revenue-neutral carbon tax in a 2009 issue of the Eastern Economic Journal, the conservative Harvard economist N. Gregory Mankiw claimed that many Republican politicians are “privately convinced” about the merits of such a policy but “feign opposition” for political expediency.
Inglis agrees, and says pricing carbon doesn’t stand a chance in the United States without more mainstream pressure to act. “We think Congress doesn’t listen to us, but the truth is that they listen very intently,” he says. “And they’re scared to death of us.”

I don’t know if Inglis or Mankiw are planning to attend next month’s People’s Climate March in New York City, but since Republicans obviously aren’t banned, both men are more than welcome to join. I also hope they join the necessary debate—a debate that must be resolved in order for the climate crisis to be resolved—over the role capitalism played in creating this problem. Is carbon pollution simply a flaw in the dominant economic system that has to be fixed, or is that economic system itself, on some level, a pollutant?

As for the Globe, thumbs up for the article overall, but thumbs down for including the rantings of Kreutzer, the Heritage hack and fossil-fuel flack who went on the attack against the American Clean Energy and Security Act five years ago and who is still doing his dirty [energy] work today. Will mainstream media entities ever knock it off with false balance on climate?

UPDATE: More from the Globe.

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