Rob Horowitz: Former Bush Treasury Secretary Advocates Carbon Tax

Tuesday, June 24, 2014

Rob Horowitz, GoLocalWorcester MINDSETTER™

In a cogently written and passionately argued opinion piece in this past Sunday’s New York Times, former Secretary of the Treasury Henry Paulson strongly advocates for adopting a national carbon tax in order to effectively combat climate change.

Paulson’s piece is designed to persuade his fellow Republicans and members of the business community of the need for immediate action. Given the paucity of strong Republican voices on behalf of action on this critical issue and the need for bi-partisan support to get any meaningful legislation through Congress, Paulson’s weighing in is a particularly welcome development. By articulately making a market-based argument for a carbon tax, Paulson may provide the political running room for more Republicans to get off the sidelines and begin to stand up to the vocal climate change deniers who, unfortunately, are currently the party’s dominant voice in this policy area

The former Treasury Secretary explicitly draws a compelling parallel between the financial crisis he played a major role in managing and the problem of climate change. As the former head of Goldman Sachs and acknowledged China expert writes, “I was secretary of the Treasury when the credit bubble burst, so I think it’s fair to say that I know a little bit about risk, assessing outcomes and problem-solving. Looking back at the dark days of the financial crisis in 2008, it is easy to see the similarities between the financial crisis and the climate challenge we now face.”

Among the common threads Paulson asserts are that, in both cases, acting sooner is the true prudent course because the risks of inaction are the problem compounding and becoming far more costly and potentially “unmanageable.” Unlike too many of his fellow Republicans, Paulson squarely states that the science of climate change is ‘settled” and points to disturbing recent scientific findings including the beginning of the melting of the Antarctic.

Paulson also convincingly argues that putting a price on carbon and then allowing the marketplace to determine the best solutions is not so-called “big government.” In fact, he argues that it will decrease the role of government, by limiting temperature increases and as a result reducing the number of climate change related intense storms, all of which tend to generate the need for huge amounts of government emergency and recovery assistance.

He goes on to point out the economic development potential of a carbon tax: “A tax on carbon emissions will unleash a wave of innovation to develop technologies, lower the costs of clean energy and create jobs as we and other nations develop new energy products and infrastructure.”

Paulson’s opinion piece was published in advance of a soon to be released new study on the economic costs of inaction on climate. This study is the work of the Risky Business Project, a collaboration of Paulson, former New York Mayor Michael Bloomberg and retired hedge fund manager Tom Steyer, among others. The next step for the Risky Business Project, according to Paulson, is to “influence business and investor decisions” worldwide.

It is encouraging to see the former Secretary bring his considerable expertise, business and political muscle to what he refers to as “the challenge of our time.” Let’s hope it spurs some of his fellow Republicans to follow in his footsteps.

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.