Those of us concerned about the impact of runaway carbon
emissions finally have some good news—news that must be shared with our
representatives and senators in Congress.
It comes in the form of a newly released study by the
nonpartisan, Washington, D.C.-based group Regional Economic Models, Inc. and
the Cambridge, Massachusetts-based group Synapse Energy Economics, Inc. The
report, prepared by economists Scott Nystrom and Ali Zaidi, is entitled The
Economic, Fiscal, Demographic, And Climate Impact Of A National
Fee-And-Dividend Carbon Tax, and it p...
Those of us concerned about the impact of runaway carbon
emissions finally have some good news—news that must be shared with our
representatives and senators in Congress.
It comes in the form of a newly released study by the
nonpartisan, Washington, D.C.-based group Regional Economic Models, Inc. and
the Cambridge, Massachusetts-based group Synapse Energy Economics, Inc. The
report, prepared by economists Scott Nystrom and Ali Zaidi, is entitled The
Economic, Fiscal, Demographic, And Climate Impact Of A National
Fee-And-Dividend Carbon Tax, and it promises to be a game-changer in
the American climate change debate.[1]
The report forecasts the economic benefits of a federal
carbon tax if such a tax would be implemented in 2016. The modeling is based on
the idea that such a tax would begin at $10 per metric ton of C02 (“collected
directly at the well-head, mine or port of entry, based on the carbon content
of the material”)[2],
rising gradually by $10 per year, with border adjustments—i.e., “import fees
levied by carbon-taxing countries on goods manufactured in non-carbon-taxing
countries.”[3]
All collected revenues from the carbon tax would be returned to households as a
monthly dividend check.
The report indicates that the implementation of a
fee-and-dividend policy would provide a tremendous economic boost to virtually
every region of the country over the next decade, specifically leading to
dramatic employment increases in the fields of health care, retail trade,
construction, finance, real estate, educational services, and manufacturing.
The mining industry would be negatively impacted, yes, but that stands to
reason; addressing climate change means moving beyond fossil fuels, and moving
towards a clean-energy future. There’s no way around that. We will have to have
a just and stable transition towards that future—and a national
fee-and-dividend policy would create that transition.
Viewed from a regional perspective, a national fee-and-dividend
policy would benefit virtually every segment of the country economically. The
(literal) petrostates of Texas and Oklahoma would take a hit—but obviously that
hit would compel both states to pursue clean-energy alternatives (and it should
be noted that Texas has already taken steps to exploit the potential of wind
energy).[4]
The economic shift prompted by a fee-and-dividend policy
would result in a significant increase in the country’s gross domestic product,
with little overall negative impact on the country’s manufacturing sector. The
report also makes clear that such a policy would bring about a steep drop in US
carbon emissions over the next decade, with only a 2% increase in the overall
cost of living.
In terms of a needed power shift, a federal fee-and-dividend
policy would completely phase out the use of coal in the United States. The use
of nuclear power would increase slightly, as would natural gas, wind and solar.
Specifically, the report concludes that a federal carbon
tax:
- Would
add between 2 million and 3 million jobs, and an additional $70 billion to
$90 billion in annual GDP;
- Would
result in a 33% reduction in carbon emissions by 2025;
- And
would result in 13,000 avoided premature deaths from pollution annually
over the next decade.
Sounds like a win-win-win.
This report is being released as the Obama administration
unveils a bold proposal to reduce carbon pollution from existing coal-fired
power plants.[5]
Climate-hawk Senator Sheldon Whitehouse has observed that Obama’s proposals would
be the key to Congress finally taking market-based action on carbon
emissions.
In February 2014, Senator Whitehouse stated:
"When those big
power plants are going to face serious EPA regulation, for their owners,
suddenly, yeah, maybe a carbon fee doesn't look like such a bad deal."[6]
Senator Whitehouse expanded upon these remarks in a May 2014
op-ed for the Providence Journal, stating:
“…The days of free carbon pollution end this June, when the
Obama administration announces regulations on the biggest emitters. That won’t
just lower the polluters’ emissions, it will change their thinking. When their
free-pollution holiday is over, a nationwide carbon fee may start to look
better to them…
“[T]he climate deniers have lost the public. Independents and
Democrats overwhelmingly support action on climate change, and most Republican
voters under 35 in a recent poll said climate deniers are ‘ignorant,’ ‘out of
touch,’ or ‘crazy.’ Republican mayors and governors, away from the polluter
money choking Congress, are getting to work on climate change. Republican
economists support a carbon tax. Republicans increasingly see they cannot
possibly win the 2016 presidential race with a denier candidate.
“Before Citizens United, many Republican senators were
working on and voting for climate legislation. Republican friends in the Senate
have complained to me that the polluter money attacks Republicans in primaries,
not just Democrats in general elections. The polluters, post-Citizens United,
have run a coal-fired purge of the Republican Party in Congress. But even vast
polluter money can only bully them quiet for so long — and when compliance is
imposed by fear, disruptions are abrupt.
“When the denial castle collapses, the prospects for a
serious carbon bill in Congress are good. The revenues from a revenue-neutral
carbon fee are all returned to the public, and there are appealing ways to do
that: lowering corporate tax rates from 35 to 30 percent would be a huge value
to good corporate citizens such as CVS and its consumers; giving seniors on
Social Security a raise, or students (and their parents) relief on college
loans would please many Rhode Islanders; a straight-out check to heads of
households would be possible.”[7]
Will the REMI report and the new EPA power-plant regulations
generate the needed momentum to pass a strong climate bill in Congress? The
odds may be long, but they’re not
impossible if Senator Whitehouse’s calculation is correct.
Interestingly enough, the REMI report also comes out just a
few weeks after conservative economist Irwin Stelzer wrote a lengthy piece in
the Weekly Standard urging Congress to embrace a revenue-neutral carbon
tax as an alternative to Obama’s proposed EPA regulations,[8]--a
piece that was, of course, brutally attacked by Marlo Lewis of the
fossil-fuel-funded Competitive Enterprise Institute.[9]
Lewis’s assault on Stelzer was little more than an attempt to de-legitimize
Stelzer’s economic credentials. Good luck with that one, pal.
(At this point, it should be noted that for many years, the
Competitive Enterprise Institute received millions in funding from ExxonMobil.[10]
It should also be noted that on its corporate website, ExxonMobil now declares:
“Throughout the world, policymakers are considering a
variety of legislative and regulatory options to influence technology
development and consumer choice to affect [greenhouse gas] emissions. If
policymakers do move to impose a cost on carbon, we believe that a carbon tax
would be a more effective policy option to reduce greenhouse-gas emissions than
alternatives such as cap-and-trade. And to ensure revenues raised from such a
tax are indeed directed to investment, and to assist those on lower incomes who
spend a higher proportion of their income on energy, a carbon tax should be
offset by tax reductions in other areas to become revenue neutral for
government. It is rare that a business lends its support to new taxes. But in
this case, given the risk-management challenges we face and the policy
alternatives under consideration, it is our judgment that a carbon tax is a
preferred course of public policy action versus cap and trade approaches.”[11]
Now why would CEI be so upset at the guys who gave them money for so many
years?)
Whether CEI likes it or not, Irwin Stelzer now joins Gregory
Mankiw[12],
Arthur Laffer[13],
Douglas Holtz-Eakin[14],
Eli Lehrer,[15]
former Secretary of State George Shultz[16]
and former Representative Bob Inglis[17]
on the list of conservatives who are calling for prudent action on climate
change, as opposed to outright denial.
Another conservative voice for prudent energy reform is
Barry Bickmore, a professor of geological sciences at Brigham Young University,
who wrote a great piece entitled “Who are the 'alarmists' here? Real
conservatives value evidence” for the Deseret News in Salt Lake City, Utah, on
May 25. In the piece, he noted:
“As the scientific case for human-caused climate change
becomes even more compelling, it would be nice if my fellow political
conservatives would try to maintain some credibility about this issue, so that
any solutions eventually adopted reflect our values as closely as possible.”[18]
After discussing recent op-eds downplaying the need for
immediate action to address the climate crisis, including a May 11 piece in the
Washington Post by Robert Samuelson,[19]
Bickmore concluded:
“…The real concern is the rapidity of the projected change,
some 50 [to] 100 times as fast as the similarly large warming that brought us
out of the last ice age. Rapid, sustained change makes adaptation very
difficult, even for humans.
“So who is being ‘hysterical’ and ‘alarmist?’ On one hand,
we have people using all the best scientific, political and economic analyses —
complete with estimates of uncertainty and risk — to come up with
recommendations on how to solve a pressing problem in the most cost-effective
manner. On the other hand, we have self-proclaimed ‘conservatives,’ supposed
champions of personal responsibility, neglecting to obtain even a cursory
familiarity with the best scholarship on the topic, blaming our inaction on
what they assume (without evidence) China will do, extolling the unlimited
capacity of humans to solve problems while excusing the present generation from
even trying, and shrieking overwrought, nonsensical warnings about what serious
climate action will cost.
“Some real conservatives, like former [Representative] Bob
Inglis [,] have proposed excellent, minimally invasive strategies for dealing
with climate change, such as a revenue-neutral carbon tax, but we have little
chance of these policies being adopted if they continue to be overshadowed by
intellectually and morally bankrupt rhetoric.”[20]
Another “real conservative,” former Department of Homeland
Security head Tom Ridge, also acknowledged the need for climate action in a May
21 appearance on MSNBC’s “Morning Joe”[21]—oddly
enough, a program hosted by Joe Scarborough, who has spent the last few weeks
lavishing praise upon billionaire climate-change denier David H. Koch.[22]
Ridge observed:
“At the end of the day, is it a potential challenge for us?
Yes. Is it a security challenge that would bring destruction and economic
damage if we don’t appreciate the fact that it’s happening and try to do
something in anticipation of it occurring? It’s a real serious problem…I’m not
a scientist, [but] it’s pretty difficult to believe that [releasing] millions
of tons of sulfur dioxide, nitrous oxide and carbon dioxide into the atmosphere
is a good thing. And regardless of whether or not that causation is strictly
man-made — and there certainly is a component of that — the fact of the matter
is global climate change is affecting sea levels, water levels."
Now, we can’t deny the challenge of getting Capitol Hill to
act responsibly on climate; after all, on May 22, the House of Representatives
voted to block the Pentagon from using any funds to analyze the risk climate
change poses to national security.[23]
Yet, if Senator Whitehouse is right, the time for denial on Capitol Hill may be
over. And there are some small signs of bipartisan hope. Three
Republicans—Frank LoBiondo of New Jersey, Scott Garrett of New Jersey, and
Chris Gibson of New York—joined 189 Democrats in voting against the effort to
stop the Pentagon from addressing the climate crisis. In addition, in mid-May,
Republican Senators Susan Collins of Maine and Kelly Ayotte of New Hampshire
voted for a bipartisan energy efficiency bill that ultimately died, reportedly
in part due to the lobbying of former Massachusetts Senator, and fellow
Republican, Scott Brown.[24]
On June 24, seven hundred members of Citizens Climate
Lobby—including yours truly—will head to Capitol Hill to speak to members of
the House and Senate from both parties about the merits of federal
fee-and-dividend legislation that places a gradually rising price on carbon
emissions, with all collected revenues returned to households as a dividend, to
reduce emissions and protect households without increasing government. To
reference the quote long attributed to Victor Hugo, “Nothing, not all the
armies in the world, can stop an idea whose time has come.” The time has come
to put a price on carbon. The time has come to show global leadership on global
warming. The time has come to finally protect the climate for present and
future generations. The time has come for leadership in Washington after too
many years of showmanship. The time is now.
…I’m D. R. Tucker.
Thanks for listening.
