This page, featuring Public Officials (both present and former), is one of five compiling expressions of support for explicit taxes on carbon pollution by notable individuals and organizations.
Energy Secretary Stephen Chu
In a February 2009 New York Times interview, Secretary Chu said “that while President Obama and Congressional Democratic leaders had endorsed a so-called cap-and-trade system to control global warming pollutants, there were alternatives that could emerge, including a tax on carbon emissions or a modified version of cap-and-trade.” (Big Science Seen as Global Warming Cure)
U.S. House of Representatives
Rep. John B. Larson, a 7th-term Democratic representative from Hartford, introduced his American Energy Security Trust Fund Act in August 2008 with twelve co-sponsors. His bill would impose an upstream tax on emissions of carbon dioxide of $15/ton with the level increasing by at least $10/ton annually. CTC estimates this trajectory would reduce U.S. CO2 emissions by 1/3 within a decade. Larson proposes a tax shift, using carbon tax revenue primarily to rebate payroll taxes. Here is CTC’s commentary on the Larson bill and here is the bill. Larson sponsored and kicked off CTC’s 2008 House briefing on Carbon Taxes.
Congressman Bob Inglis (R-SC)
(Former) Rep. Bob Inglis was elected in 2008 to a sixth term serving South Carolina’s 4th Congressional District but in 2010 lost his primary to a Tea-Party backed rival. With economist Arthur Laffer, Inglis published An Emissions Plan Conservatives Could Warm To (NY Times, 12/08), calling on Congress to enact a revenue-neutral U.S. carbon tax (emphasis added):
Conservatives don’t support tax increases that are veiled as “cap and trade” schemes for pollution permits. But offer us a tax swap, and we could become the new administration’s best allies on climate change.
A climate-change bill withered in Congress this summer because families don’t need an enormous, and hidden, tax increase. If the bill’s authors had instead proposed a simple carbon tax coupled with an equal, offsetting reduction in income taxes or payroll taxes, a dynamic new energy security policy could have taken root.
As long as national security risks aren’t factored into the cost of gasoline and as long as carbon dioxide can be emitted without penalty, oil will continue to have an advantage over emerging fuels in the marketplace, and we’ll continue our ruinous addiction to it. We need to impose a tax on the thing we want less of (carbon dioxide) and reduce taxes on the things we want more of (income and jobs). A carbon tax would attach the national security and environmental costs to carbon-based fuels like oil, causing the market to recognize the price of these negative externalities.
Conservatives do not have to agree that humans are causing climate change to recognize a sensible energy solution. All we need to assume is that burning less fossil fuels would be a good thing. Based on the current scientific consensus and the potential environmental benefits, it’s prudent to do what we can to reduce global carbon emissions. When you add the national security concerns, reducing our reliance on fossil fuels becomes a no-brainer.
It is essential … that any taxes on carbon emissions be accompanied by equal, pro-growth tax cuts. A carbon tax that isn’t accompanied by a reduction in other taxes is a nonstarter. Fiscal conservatives would gladly trade a carbon tax for a reduction in payroll or income taxes, but we can’t go along with an overall tax increase.
The good news is that both Democrats and Republicans could support a carbon tax offset by a payroll or income tax cut.
Two carbon tax bills introduced in Ways & Means (the House tax-writing committee) embodied much of what Rep. Inglis advocated in his op-ed: Stark-McDermott, filed in April 2007, and Larson, filed in August. Details here.
Rep. Inglis now chairs the Energy & Enterprise Initiative at George Mason University, advocating a revenue-neutral carbon tax.
Congressman Pete Stark (D-CA) and Congressman Jim McDermott (D-Wash)
(Former) Congressmen Stark and McDermott were lead sponsors of the “Save Our Climate Act,” which would impose a $10 per ton (of carbon) charge on coal, petroleum and natural gas when the fuel is either extracted or imported. The charge would increase by $10 every year until U.S. carbon dioxide emissions have dropped 80% from 1990 levels. Introducing the bill, Congressman Stark eloquently stated:
“The question is not if human activity is responsible for global climate change, but how the United States will respond,” said Stark. “Predictable, transparent and universal, a carbon tax is a simple solution to a difficult problem. It would drastically reduce our carbon dioxide emissions by providing an economic disincentive for the use of carbon-based fossil fuels and an incentive for the development and use of cleaner alternative energies. The Save Our Climate Act would establish the United States as a global leader in environmental protection and encourage other nations – most of whom have already acknowledged the climate change threat – to take similar action to reduce emissions. I strongly encourage Congress to pass a carbon tax.”
Congressman John Dingell (D-MI)
In June 2007, Washington buzzed with word that powerful U.S. Rep. John Dingell, chair of the House Energy & Commerce Committee and dean of the Congress (first elected in 1954) would introduce a carbon tax bill. However, after floating a hybrid carbon tax bill that featured a national carbon fee, supplemental increases in taxes on gasoline and aviation fuel, and a reduction in the mortgage interest deduction for super-large houses, Rep. Dingell announced in April that he was taking it “off the table.” The Michigan lawmaker reiterated that “economists and other experts continue to inform us that a carbon tax is the most effective and efficient way at getting at the problem of global warming.” Dingell also pointed out that his on-line poll query, “Do you approve of the idea of a carbon tax?,” earned a “Yes” from 61% of the 2,900 respondents.
Dingell’s bill would have gradually raised the carbon tax along with an additional levy on gasoline, diesel fuel and aviation (jet) fuel, over five years. This “hybrid” bill would target both climate damage (via the carbon tax) and U.S. oil dependence (through the additional tax on major petroleum products). Here is our assessment.
(Former) Senator Dodd anchored his 2007 presidential candidacy to a Corporate Carbon Tax. As he explained: “Until you deal with the issue of price, until you impose a corporate carbon tax, we will never get away from fossil fuels. It’s the only way this can be achieved. You have to advocate that if you’re serious about global warming.” (NY Times, 7/24/07.)
New York City Mayor Michael R. Bloomberg
In a rousing speech in Seattle in November 2007, which he recapitulated a month later at the UN Framework Conference on Climate Change in Bali, New York City Mayor Michael R. Bloomberg vaulted to the head of the class of public officials supporting carbon taxes. As noted on our blog, the mayor’s speech put Bloomberg alongside former Vice-President Al Gore as the nation’s leading advocate of a carbon tax to cap and reduce carbon emissions from fossil fuels. Bloomberg could not have been more forceful on the need to price carbon emissions, the superiority of carbon taxes over cap-and-trade schemes, and the need for political leadership at this crucial time.
Bloomberg renewed his call for a U.S. carbon tax in November 2010. Speaking at the Wall Street Journal CEO Council, the NYC Mayor said the U.S. needs to reduce its dependence on foreign oil if “you want to stop sending your money to…terrorists.” The answer: “We need a carbon tax.” As reported by the Journal:
Bloomberg criticized the now-moribund Democratic proposal to develop a nationwide “cap and trade” system for limiting U.S. carbon dioxide emissions by requiring companies to buy tradeable permits for the right to emit greenhouse gases under a steadily declining economy wide cap. “Cap and trade is filled with so many special interests,” he said.
Former Public Officials
The individual who has done the most to raise the world’s consciousness of global warming has long been an outspoken advocate for taxing carbon emissions. “The most direct policy solution to the climate crisis is a carbon tax, offset by reductions in taxes on wages,” Gore said in November 2012. “By including the carbon tax in the solution to the fiscal cliff we can [get] away from the climate cliff.” (The Hill.)
In a July 19, 2006 speech at Wal-Mart’s Bentonville, AR headquarters, Gore said, “We should sharply reduce payroll taxes and make it all up in CO2 taxes so the low- and middle-income people don’t bear the cost burden of this big transition in energy sources.” Gore spoke in the same vein two months later at NYU Law School:
For the last fourteen years, I have advocated the elimination of all payroll taxes — including those for social security and unemployment compensation — and the replacement of that revenue in the form of pollution taxes — principally on CO2. The overall level of taxation would remain exactly the same. It would be, in other words, a revenue neutral tax swap. But, instead of discouraging businesses from hiring more employees, it would discourage business from producing more pollution.
In remarks to Congress in March, 2007, Gore said “I fully understand that this [taxing the carbon content of fuels] is considered politically impossible, but part of our challenge is to expand the limits of what is possible.” Reported by Greenwire. Gore’s 10 legislative recommendations, reported by Gristmill, are here.
In an interview in the Sept/Oct issue of 02138 magazine, Gore reiterated, “I’m convinced that we should eliminate the payroll tax and replace it dollar for dollar with a CO2 tax.” Gore has also publicly praised Sen. Chris Dodd’s corporate carbon tax proposal.
Gore voiced this theme in an historical context in a March, 2008 talk at Autodesk: “Here’s the solution. We need a CO2 tax, revenue-neutral, to replace taxation on employment, which was invented by Bismarck — and some things have changed since the 19th Century.” (This is at around the 13:30-minute mark of his talk).
Gore added a bit of poetry to this idea in his address, A Generational Challenge to Repower America, on July 17 at D.A.R. Constitution Hall in Washington D.C., telling Americans, “We should tax what we burn, not what we earn. This is the single most important policy change we can make.”
In early 2010, in a 1,900-word opinion piece in the Sunday New York Times, We Can’t Wish Away Climate Change, Gore sought to re-invigorate the climate movement in the wake of the Dec. 2009 COP-15 debacle at Copenhagen. The former vice-president’s essay stands as a brilliant rebuttal to climate denialists:
[T]he reality of the danger we are courting has not been changed by the discovery of at least two mistakes in the thousands of pages of careful scientific work over the last 22 years by the Intergovernmental Panel on Climate Change. In fact, the crisis is still growing because we are continuing to dump 90 million tons of global-warming pollution every 24 hours into the atmosphere — as if it were an open sewer.
It is true that the climate panel published a flawed overestimate of the melting rate of debris-covered glaciers in the Himalayas, and used information about the Netherlands provided to it by the government, which was later found to be partly inaccurate. In addition, e-mail messages stolen from the University of East Anglia in Britain showed that scientists besieged by an onslaught of hostile, make-work demands from climate skeptics may not have adequately followed the requirements of the British freedom of information law.
But the scientific enterprise will never be completely free of mistakes. What is important is that the overwhelming consensus on global warming remains unchanged. It is also worth noting that the panel’s scientists — acting in good faith on the best information then available to them — probably underestimated the range of sea-level rise in this century, the speed with which the Arctic ice cap is disappearing and the speed with which some of the large glacial flows in Antarctica and Greenland are melting and racing to the sea.
Unfortunately, Gore undermined his own cause by not only endorsing the cap-and-trade bill then before Congress but criticizing a carbon-tax alternative, arguing that cap-and-trade was superior on grounds of both easier global harmonization and political feasibility. The Carbon Tax Center’s Charles Komanoff replied to Gore’s arguments the next day in the Huffington Post, in Gore’s Climate Remedy Must Match Diagnosis:
Mr. Gore’s substantive error lies in presuming that a cap-based approach could be harmonized globally. Perhaps this is a legacy of his having championed cap-and-trade in the 1997 negotiations that produced the Kyoto Protocol. Yet now, as then, there are no clear grounds for translating a possible U.S. cap on carbon emissions into limits for other countries. Per capita, Americans generate 4 times as much greenhouse gases as Chinese and 14 times as much as Indians. Why, then, should a U.S. commitment to reduce emissions by, say, 2 percent a year, carry any moral authority in China or India? Indeed, India’s per capita emissions could increase by 2% a year for more than 60 years and still not match U.S. emissions declining at the same rate.
A carbon tax, in contrast, is wholly fungible across borders. A fee that raises the price of coal or natural gas by so much in one country will do the same in another. If one country is more efficient in turning energy into goods and services, or enjoys a greater abundance of carbon-free water- or wind-power, then that is an incentive to other nations to step up their efforts and achieve parity. A carbon tax thus creates no unfair comparative advantage. While these facts can’t guarantee global harmonization of a carbon tax, they provide a strong basis for it.
Politically, Mr. Gore’s dogged support of cap-and-trade sounds tone-deaf. The financial crisis hasn’t merely shaken the world’s confidence in market-based solutions; it has provoked a profound revulsion among Americans against financial speculation, market manipulation and legislative complexity. Yet all of these are intrinsic to cap-and-trade systems built on trillion-dollar markets in volatile emission permits. It is this political reaction, even more than media-driven denial of climate science, that has turned Congress against cap-and-trade. Mr. Gore underestimates its staying power at his own risk.
Robert Shapiro, former Undersecretary of Commerce for Economic Affairs
Mr. Shapiro, Commerce Undersecretary in the Clinton Administration, authored the American Consumer Institute’s superb Feb. 2007 report, Addressing the Risks of Climate Change: The Environmental Effectiveness and Economic Efficiency of Emissions Caps and Tradable Permits, Compared to Carbon Taxes. From the Executive Summary:
Carbon taxes would be a better response to the risks of global warming than emissions caps and tradable permits (commonly referred to as cap-and-trade)… [Carbon taxes] are much less vulnerable to evasion and market manipulation, providing a more stable and transparent system for consumers and industry alike. [Carbon taxes] do not create the price volatility and administrative problems associated with cap and trade.
Full report here.
In a June 2008 follow-on study, Addressing Climate Change Without Impairing the U.S. Economy: The Economics and Environmental Science of Combining a Carbon-Based Tax and Tax Relief, Shapiro calls for a federal carbon tax starting at $14 per metric ton of CO2 in 2010 and rising steadily to $50 in 2030 (equivalent to $82 with inflation). Shapiro concludes that the nearly revenue-neutral carbon tax would reduce CO2 emissions by 30% below non-taxed levels while shaving only eight-tenths of one percent off future (2030) GDP. The report was published by the U.S. Climate Task Force, a project of Shapiro’s Sonecon economic advisory company.
Volcker is revered in the business and financial community for shepherding the U.S. economy out of the “stagflation” of the 1970s into the long-term boom of the 1980s and beyond, as chairman of the Federal Reserve under Presidents Carter and Reagan (1979-87). Speaking to the U.S. Chamber of Commerce in Egypt, earlier this year, he stated: “[The argument that taxes on oil or carbon emissions would ruin an economy is] fundamentally false. First of all, I don’t think [such a step] is going to have that much of an impact on the economy overall. Second of all, if you don’t do it, you can be sure that the economy will go down the drain in the next 30 years,” Volcker said. Referring to the new report by the UN Intergovernmental Panel on Climate Change, Volcker added:
What may happen to the dollar, and what may happen to growth in China or whatever pale into insignificance compared with the question of what happens to this planet over the next 30 or 40 years if no action is taken… The scientists seem pretty well agreed that [global warming] is still potentially manageable if we act decisively, beginning now into the next decade or so, by taking measures that are technically and economically feasible.
(All quotes attributed to Mr. Volcker, above, are from an article published in the International Herald Tribune on Feb. 6, 2007, US: Economist Paul Volcker Says Steps to Curb Global Warming Would Not Devastate an Economy.)
George P. Schultz, former Secretary of State
Mr. Schultz, U.S. Secretary of Labor under Pres. Nixon (1969-70), Treasury Secretary under Presidents Nixon and Ford (1972-74), and Secretary of State under Pres. Reagan (1982-89), a consummate member of the Washington establishment, co-chairs a task force at Stanford that is urging Republicans to support a carbon tax. (See Stanford’s George Shultz on energy: It’s personal, Stanford Report, July 2012).
Following is an excerpt from his op-ed, How to Gain a Climate Consensus, in the Washington Post, Sept. 5, 2007:
The use of economic incentives (caps and trading rights, and carbon taxes) is essential to avoid disastrously high costs of control. The cap-and-trade system has been highly successful in reducing sulfur dioxide emissions by electricity utilities in the United States. That system relies on a scientifically valid and accepted emission-measurement system used by a clearly identified and homogeneous set of utilities. Fortunately, such a careful system of measurement exists for a viable greenhouse gas regimen. The product of collaboration between the World Resources Institute and the World Business Council for Sustainable Development, these standards for accounting and reporting greenhouse gases should be duly understood and adopted. Even with clear units of account, however, large problems arise as the coverage and heterogeneity of the system grow. And for trading across borders, the system needs to be accepted among the trading partners. Scams are easy to imagine. No nation should be allowed to trade without a verifiable, transparent system of measuring and monitoring of reductions, and holding emitters accountable. In many respects, a straight-out carbon tax is simpler and likelier to produce the desired result. If the tax were offset by cuts elsewhere to make it revenue-neutral, acceptability would be enhanced.
Gregory Mankiw, former Chair, President’s Council of Economic Advisers
Click here for links to the many pro-carbon tax articles and blog posts by President George W. Bush’s chief economic adviser, 2003-2005. Mankiw, who teaches at Harvard, is the convener of the “Pigou Club” which he describes as an elite group of of economists and pundits who support taxing pollution instead of productive activity.
Lawrence Lindsey, former Director of the National Economic Council and Assistant to the President on Economic Policy under President George W. Bush
Recommending permanent tax cuts, Mr. Lindsey also recommends a “greenhouse emissions tax” as the source of funding. “Longer term, however, spending cuts or a new source of revenue would be needed. Given the agenda of the incoming administration, the best source of such funds would be a greenhouse emissions tax.” (From Lawrence Lindsey Joins the Schumpeter Club, Capital Commerce, in U.S. News & World Report, December 30, 2008.)
William Ruckelhaus, former Administrator, U.S. Environmental Protection Agency
According to Grist Magazine, Ruckelhaus favors a carbon tax over cap-and-trade, since a carbon tax like cap-and-trade would rely upon market forces to determine where reductions should occur, but government administration would be much simpler. “It has the desired effect … It moves consumption toward less carbon-intensive activities. It does everything a cap-and-trade system does, but it’s about ten times simpler. And about one-tenth as popular, which is why we don’t have it.” (Obama’s Preferred Bill: EPA’s first administrator is bullish on Obama, but not cap-and-trade, Grist, December 29, 2008.)
Bill Bradley, former U.S. Senator from New Jersey
From Mr. Bradley’s op-ed, We Can Get Out of These Ruts, in the April 1, 2007 Washington Post: “We also need to change our tax system to reduce our oil dependence. In general, we ought to reduce taxes on things we need, such as wages, and raise taxes on whatever is dangerous to us, such as pollution and resource depletion. We could implement a $1 per gallon gasoline tax; or an equivalent carbon tax … After a few years of adjustment in the case of a gasoline or carbon tax, cars would be more fuel-efficient, so consumers would pay what they used to pay for the same amount of driving, and the broad middle class would continue to pay lower employment taxes. The result would be increasing demand for goods and services; shrinking dependency payments such as unemployment compensation and welfare; lowered social costs, such as crime and avoidable illness; and a more equitable tax system that encourages rising employment.”