Horowitz: Republican Heavyweights Advocate Carbon Tax

Tuesday, February 14, 2017

Rob Horowitz, GoLocalWorcester MINDSETTER™

Rob Horowitz

In separate, but coordinated, recent Wall Street Journal and New York Times opinion pieces Republican heavyweights led by former Secretary of State James Baker strongly advocated for adopting a national carbon tax in order to effectively combat climate change and released a detailed description of how it would work.

The pieces were designed to persuade fellow Republicans and the business community that immediate action on climate change was the only prudent course and a carbon tax, unlike the Obama Administration’s regulatory scheme, was in keeping with free market principles. In a follow-up interview, Baker, who also served as President Reagan’s chief of staff, argued that the Gipper himself, still in many ways the Republican Gold Standard, would have probably been on board with the plan.

Baker co-authored the Wall Street Journal piece with George Shultz, another former Secretary of State, in which in an effort to enlist climate change skeptics they called a carbon tax an ‘insurance policy”— because even if you are not yet convinced of the science, the risks of ignoring it in case the scientists are right is too great. They assert that an appropriately priced carbon tax would reduce more greenhouse gas emissions than the current Obama Clean Power Plan. There a number of experts that agree with them on this point.

In a separate New York Times piece, former Reagan and George W. Bush chief economists Martin Feldstein and Gregory Mankiw, joined by head of the New America Foundation, Ted Halstead made a detailed economic and environmental case for the plan, writing it was based on four pillars: “First, the federal government would impose a gradually increasing tax on carbon dioxide emissions. It might begin at $40 per ton and increase steadily. This tax would send a powerful signal to businesses and consumers to reduce their carbon footprints. Second, the proceeds would be returned to the American people on an equal basis via quarterly dividend checks. With a carbon tax of $40 per ton, a family of four would receive about $2,000 in the first year. As the tax rate rose over time to further reduce emissions, so would the dividend payments. Third, American companies exporting to countries without comparable carbon pricing would receive rebates on the carbon taxes they’ve paid on those products, while imports from such countries would face fees on the carbon content of their products. This would protect American competitiveness and punish free-riding by other nations, encouraging them to adopt their own carbon pricing. Finally, regulations made unnecessary by the carbon tax would be eliminated, including an outright repeal of the Clean Power Plan.”

Other members of the group pushing the carbon tax include Hank Paulson, former secretary of the Treasury under George W. Bush and a long-time environmental advocate, and Rob Walton, the former chair of Wal-Mart. Baker and several other members of the group met last week with Vice-President Pence, Jared Kushner, Ivanka Trump and Gary Cohn, President Trump’s director of the National Economic Council to make the political and economic case for the plan.

While this as an impressive and formidable group, their influence is likely limited because they are in many ways yesterday’s Republicans. And a carbon tax will be a very tough sell in Congress and is likely to be aggressively opposed by the Koch brothers, among other powerful interests. On the other hand, for President Trump, it could be a political master-stroke, attracting Democrats and positioning him well with moderate Republicans. It would demonstrate that President Trump is truly a different kind of Republican, willing to forge new coalitions and to do so in the interests of solving a major national and global challenge.

As one of the shrewdest and most effective operators Washington, D.C. has ever seen, if this can get done Jim Baker will figure out how to do it. For the good of the nation and the world, let’s hope that he and these other true Republican statesmen succeed.

Rob Horowitz is a strategic and communications consultant who provides general consulting, public relations, direct mail services and polling for national and state issue organizations, various non-profits and elected officials and candidates. He is an Adjunct Professor of Political Science at the University of Rhode Island