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Carbon Tax Center

Pricing carbon efficiently and equitably

Carbon, Weed, and the Crisis of American Politics

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America is anti-urban. This is not a feeling or a passing fancy but a fact. While the House adheres to the principle of one person-one vote, more or less, the Senate is a horror show of anti-democracy. Thanks to the principle of equal state representation, it gives the three percent of the population that live in the ten smallest states the same number of senators as the 54 percent that live in the ten largest. The Electoral College triples the clout of Wyoming, Vermont, and other under-populated states in presidential elections while Article V — the constitutional clause that says that two-thirds of each house plus three-fourths of the states must approve any amendment — allows thirteen states representing as little as 4.4 percent of the population to wield an absolute constitutional veto. In case you were wondering, this, in a nutshell, is why an eighteenth-century relic like the Second Amendment will never, ever go away.

But because the least populous states are the least urban for the most part, the result is a profound structural bias in favor of acres over people. And since American politics are also fragmented and de-ideologized, the effect is not only to short-change urban interests but to confuse and obscure them so that Americans no longer recognize what those interests really are.

Here are two examples of how US-style structural anti-urbanism plays out. One involves pot. The other involves carbon.

Although you wouldn’t know it, thanks to a near-century of Washington scare tactics, smokeable marijuana is one of the world’s most benign inebriants. As Lynn Zimmer, a sociologist at Queens College, and John P. Morgan, a professor of pharmacology at the City University of New York, showed twenty years ago in “Marijuana Myths, Marijuana Facts,” large-scale studies of users have “generally supported the idea that marijuana was a relatively safe drug — not totally free from potential harm, but unlikely to create serious harm for most individual users or society.” Contrary to anti-drug alarmists, pot does not harm reproduction or fetal development, it does not damage brain cells, and it does not cause “significant reduction in any pulmonary functions,” most likely because regular users consume at most three to five joints per day versus the ten to forty cigarettes consumed by a typical smoker. Marijuana also does not inexorably lead to an “amotivational syndrome,” which is to say stone-style listlessness, according to Zimmer and Morgan, and it is not a “gateway” to harder drugs either.

So legalization is an attractive alternative for all those seeking to make America a healthier, happier, and — dare we say it? — mellower place. But it is especially attractive from an urban point of view simply because depressed inner cities are where many of the drug war’s social costs are concentrated. Black users are nearly four times as likely to be arrested as whites according to the ACLU, while poor people in general are disproportionately penalized. In New York City’s twenty wealthiest neighborhoods (average family income: $75,000 per year), the arrest rate in 2014 for marijuana possession was just 39 per 100,000; in its twenty poorest (average family income: $34,000), the arrest rate was 498, nearly thirteen times greater.

Thus, support for marijuana legalization should be strongest among minorities and the poor and the politicians they elect. And it would be if America were more democratic. But given its present anti-urban structure — which, by the way, is worsening as the interior continues to lose ground to burgeoning coastal communities — strange anomalies appear.

One is in New Jersey, where Democratic Governor Phil Murphy was elected last fall on a pro-legalization platform. But since Murphy took office in January, replacing the disgraced Chris Christie, marijuana reform has run into a buzz saw of opposition. The resistance comes not only from skittish suburbanites, but, strikingly, from the state legislature’s black caucus. At a recent public hearing in hard-pressed Jersey City, opposition ran so high that a supporter described it as a case of “reefer madness.”

“It will devastate the African-American community,” a Newark religious leader proclaimed. “It will devastate any chance of our children having a future.” Added an ex-Newark public defender named David Evans: “Is legalization going to improve the spiritual health of the people of New Jersey? I don’t think so.”

NJ State Sen. Ronald L. Rice questions legal marijuana’s impact on Newark and other urban communities. AP Photo by Julio Cortez.

But it would improve spiritual health for the simple reason that nothing raises morale more than the knowledge that one will not spend years in prison for the crime of puffing on a harmless weed. Critics do have half a point in the sense that no social policy is cost-free and that inner cities are justified in assuming that they will once again be saddled with a disproportionate burden. As State Senator Ronald Rice, an ex-Marine and ex-Newark police detective who chairs the NJ legislative black caucus, told The New York Times: “[I]t’s being sold on the backs of black folk and brown people. It’s clear there is big, big money pushing special interests to sell this to our communities.”

All too true. But what critics evidently don’t realize — what an inequitable power structure prevents them from realizing — is that, all things considered, inner-city communities will still be better off if non-punitive policies are adopted and the individual is left alone to decide what substances to ingest and what not to. And that’s true even if marijuana reform is revenue-neutral, that is, if it simply legalizes sale and use without dedicating cannabis tax revenues to communities hollowed out by the drug war and mass incarceration. Even a half-good reform is better than nothing.

And now onto the second issue: carbon. The arguments in favor of carbon taxes are every bit as overwhelming as those in favor of marijuana legalization. They discourage carbon-dioxide emissions that are the prime cause of global warming, they encourage a switch from fossil fuels to sustainable energy sources, and, by de-incentivizing driving, they help thin out the chronic traffic congestion that paralyzes the country’s major metropolitan areas.

But what’s often overlooked is the effect not just on traffic or climate, but on America’s much-abused urban centers. To the degree carbon taxing discourages driving, it encourages a shift to mass transit, which, by its very nature, tends to feed into densely-populated cities. Moreover, mass transit doesn’t just funnel people into such nodes — it funnels economic activity and jobs. To the degree that taxing carbon encourages energy to be used more efficiently, it encourages a switch from cars and trucks to biking, walking, and rail, all of which are more compatible with high urban densities. By altering the incentives, taxing carbon emissions applies the brake to powerful centrifugal forces that have spun employment off into ever more distant exurbs, replacing them with centripetal forces returning them to the old urban cores and central business districtss.

Carbon taxes won’t do this all at once, needless to say, but they will at least start the process moving. This is good news for a lot of people, but especially for urban job seekers who can’t afford a car and can’t pursue job opportunities ever farther out in the suburbs because of racial barriers expressly designed to keep them away. Instead of their going to the jobs, the jobs will go to them.

Given all that, one would expect environmental progressives to clamor for ever more carbon taxes — the bigger the better. But anomalies arise yet again. When the state of Washington decided to submit a modest carbon tax to a referendum in 2016, “progressives” led by DC-based Food and Water Watch countered that the tax was regressive, that “people drive because they have to, not because they want to,” and that “[i]ncreasing gasoline prices only means that struggling families will have to cut back on other expenses to fill up their cars at the pump.” Opposition by such “social justice” groups was one reason that the tax, a US first, went down in defeat by a margin of nearly 3 to 2.

From searing words like these (from “Carbon Pricing: A Critical Perspective,” by the Indigenous Environmental Network and the Climate Justice Alliance), one wouldn’t know that carbon taxing can benefit frontline communities disproportionately.

Like critics of marijuana legalization, however, “progressives” had no more than half a point. Boosting gas prices will negatively affect the working poor, which is why any proper carbon tax should include mitigations in the form of reimbursement, which the Washington referendum provided in spades, or promises to invest revenues in job-creating infrastructure projects. But the idea that “people drive because they have to” is nonsense. Driving is not inelastic. As prices rise, motorists cut back on discretionary driving or search for alternate means of going from here to there. The job of progressives is to demand that government provide such means and that it use its economic power to mold development in a way that is more cost-effective for working people, more environmentally benign, and more economically productive. Progressives also need to stop rejecting widespread evidence that “internalizing” climate damage-costs into the prices of coal, oil and gas instills powerful incentives to move off of fossil fuels, even when government investment lags behind.

The present transportation system meanwhile works less well for more and more people. By 2016, the average American was spending a hundred hours more each year in a car than in 1980, the equivalent of two and a half work weeks. Rush-hour speeds are declining according to a study by Texas A&M University, meaning that commuters are spending more time going less far. By 2012, the average car on the road was more than a year older than in 2007 according to the Bureau of Labor Statistics, while the cost of repairs, upkeep, and replacements was up as well. The duration of an average car loan has risen thirteen percent since 2009 while delinquent loans since 2012 have nearly doubled. The typical motorist is stressed sitting in traffic and stressed when struggling each month to pay off his or her loan.

As bad as this is, conditions are even worse for those who can’t afford a car and must therefore spend hours a day traveling by bus to ever more distant work places and then make their way across dangerous highways when they get back home. People like this are stranded in a hostile, highway-bound wilderness, forced to fork over large amounts of cash for a taxi or Uber whenever they want to go to a supermarket, an emergency room, or church.

The system is no less dysfunctional than America’s endless drug wars. Yet an increasingly undemocratic and anti-urban structure not only prevents Americans from acting effectively to fix it, it prevents them from even thinking about how to address a growing list of problems in a constructive way. Politics have broken down, trench warfare has engulfed Capitol Hill, and the showdown between the intelligence community and the White House grows ever more ominous. Is this how the captain of the Titanic felt when he suddenly noticed a mountain of ice looming before him?

Daniel Lazare, author of “The Frozen Republic: How The Constitution Is Paralyzing Democracy” and “America’s Undeclared War: What’s Killing Our Cities and How We Can Stop It,” among other books, is an occasional contributor to the Carbon Tax Center blog.

Expert report: NYS can charge carbon without hiking power bills

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This guest post is by Philip H. Kahn, Co-Leader of Citizens’ Climate Lobby’s New York City Chapter.

A new report commissioned jointly by the operator and regulator of the New York State power grid has found that a $40 per ton charge on CO2 emitted in generating electricity sold in the state would have an insignificant impact on electricity costs, provided the carbon revenues are redistributed to electricity customers in the form of bill reductions.

Problem statement from Brattle report. Solution: $40/ton charge on CO2 from electricity generation, with revenues returned to ratepayers.

The report, with the unwieldy title, Pricing Carbon into NYISO’s Wholesale Energy Market to Support New York’s Decarbonization Goals, was prepared by the Brattle Group for the NY Independent System Operator (NYISO) and the state’s Public Service Commission. Its key finding — that monthly electric bills would likely rise no more than 2 percent and might even fall slightly (by 1 percent) — flies in the face of the conventional wisdom that carbon charges necessarily drive electric rates higher.

Half of the upward cost pressure from the carbon charge would be offset by returning carbon revenues to customers. The remainder would be alleviated through three separate but parallel marketplace responses:

  1. The $40/ton carbon charge will incentivize natural gas generators to upgrade conventional natural gas-powered plants to combined-cycle plants that typically extract 50-60 percent more kilowatt-hours from each unit of fuel.
  2. The higher market price for wholesale power will encourage development of more renewable (largely wind and solar) power generation to supply the state.
  3. The carbon charge will, over time, replace the Zero Emission Credits (ZECs) and Renewable Energy Certificates (RECs) that now subsidize nuclear and renewable energy generation.

Carbon emissions from statewide electricity generation would fall by 2.6 million tons per year, according to the report, an amount equal to 8 percent of current emissions from the electric sector. “This estimate is probably conservatively low,” says Brattle, “because it does not account for the potential re-dispatch of existing resources, nor does it include innovative responses that the market might elicit but that we have not imagined.”

The Brattle researchers assumed that all of the revenue raised from the carbon charge would be returned to customers as line items reducing monthly bills. Alternative revenue treatments that direct some of the funds to energy efficiency and clean energy programs operated by the NY State Energy Research & Development Authority (NYSERDA) would result in deeper carbon cuts but at the possible expense of somewhat higher electric bills. This approach is supported by the Natural Resources Defense Council, the renowned environmental law group whose advocacy has led to utility and state government funding of end-use efficiency and renewables.

How the proposed carbon charge can cut CO2 emissions from NY State’s electricity sector.

The Brattle report pegged its proposed carbon charge to the “social cost of carbon,” which the U.S. Interagency Working Group on the Social Cost of Carbon last year specified at $43/ton of CO2 and rising over time. A combined carbon price of $40/ton from the carbon charge and the anticipated “market” price of $17/ton in 2025 in response to the tightening cap set by the Regional Greenhouse Gas Initiative, or RGGI, would total the $57/ton Social Cost of Carbon in that year.

The Brattle Group’s recommendation of a substantial, explicit carbon charge differs from the state carbon pricing bills under consideration in Massachusetts. Both MA H1726 (the state’s house bill) and S1821 (the senate bill) exempt electricity, with the rationale that carbon emissions from power generation in Massachusetts and the other Northeast states (except New Jersey) are already priced under RGGI. The $57/ton charge that Brattle recommends for New York State in 2025 would be more than triple the RGGI-alone price in that year.

Variations of the Brattle approach may be usable in other wholesale energy markets, especially those that are coterminous with a single state, such as Texas and California, and that use RECs to subsidize renewable energy.  What makes New York’s case particularly promising is that the subsidies now provided by the ZECs and RECs would be reduced because non-fossil fuel generation would receive the same market price set by fossil generators subject to the carbon adder.

Fig. 1 from Brattle report. Note concerted drop in emissions from electricity.

If the carbon adder fee paid by the fossil-fuel generators is returned to the ratepayers then rates will not go up. Other ISOs with RECs in their markets could implement a similar scheme, but multi-state ISO markets would require negotiations between states with different REC regimes.

Implementation of the Brattle Group’s recommended carbon charge would give NY Gov. Andrew Cuomo a way out of his unpopular new program subsidizing several upstate nuclear power plants via Zero Emission Credits pegged to the Social Cost of Carbon. That program, which went into effect in April, adds a charge to all state customers’ monthly electric bills which flows to Entergy Corp., the reactors’ owner-operator.

Proponents laud the nuclear subsidy for monetizing the reactors’ zero carbon emissions and helping NY State meet carbon-reduction targets, but opponents point to the anticipated $7 billion price tag over the dozen years of the subsidy, as well as the lack of equivalent support for energy efficiency and other zero- or low-carbon electricity provision. A universal carbon charge such as the $40/ton fee recommended by Brattle would reduce the nuclear-only subsidy while retaining the monetary reward that could enable the reactors to continue operating.  As the carbon adder is increased, the subsidies would diminish, ultimately to zero.

The Four Best Reads on Trump and Paris

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If you’re not shaken by Trump’s repudiation of the Paris Climate Agreement yesterday at the White House, you’ve wandered into the wrong Web site.

Those “individual nationally-determined commitments” whose sum is, or was, the Paris agreement may be woefully insufficient to stop climate ruin; yet reaching the agreement was an enormous step forward, marking the time the world began moving in concert, if haltingly, toward capping, reducing and eliminating climate-destroying emissions.

A transcript of Trump’s Rose Garden remarks is here, for anyone who cares to look. Rather than prate on, I’ve chosen to link to the four most penetrating pieces about this calamitous misstep that I’ve seen. Here are brief samples from each:

1. Mike Grunwald, in Politico, Why Trump actually pulled out of Paris

It wasn’t because of the climate, or to help American business. He needed to troll the world — and this was his best shot so far.

Trump’s abrupt withdrawal from this carefully crafted multilateral compromise was a diplomatic and political slap: it was about extending a middle finger to the world, while reminding his base that he shares its resentments of fancy-pants elites and smarty-pants scientists and tree-hugging squishes who look down on real Americans who drill for oil and dig for coal.

The real triumph of Paris wasn’t America’s promises; it was the serious commitments from China, India and other developing nations that had previously insisted on their right to burn unlimited carbon until their economies caught up to the developed world.

2. Paul Krugman, in The New York Times, Trump Gratuitously Rejects the Paris Climate Accord

As Donald Trump does his best to destroy the world’s hopes of reining in climate change, let’s be clear about one thing: This has nothing to do with serving America’s national interest. This isn’t about nationalism; mainly, it’s about sheer spite.

Pay any attention to modern right-wing discourse and you find deep hostility to any notion that some problems require collective action beyond shooting people and blowing things up.

Beyond this, much of today’s right seems driven above all by animus toward liberals rather than specific issues. If liberals are for it, they’re against it. If liberals hate it, it’s good. Add to this the anti-intellectualism of the G.O.P. base, for whom scientific consensus on an issue is a minus, not a plus, with extra bonus points for undermining anything associated with President Barack Obama.

3. 350.org founder Bill McKibben, also in The Times, Trump’s Stupid and Reckless Climate Decision

It’s a stupid and reckless decision — our nation’s dumbest act since launching the war in Iraq. But it’s not stupid and reckless in the normal way. Instead, it amounts to a thorough repudiation of two of the civilizing forces on our planet: diplomacy and science. It undercuts our civilization’s chances of surviving global warming, but it also undercuts our civilization itself, since that civilization rests in large measure on those two forces.

But it’s not just science that [Trump is] blowing up. The Paris accord was a high achievement of the diplomatic art, a process much messier than science, and inevitably involving compromise and unseemly concession. Still, after decades of work, the world’s negotiators managed to bring along virtually every nation: the Saudis and the low-lying Marshall Islanders, the Chinese and the Indians. One hundred and ninety-five nations negotiated the Paris accord, including the United States.

The changes [committed to at Paris], and similar ones agreed to by other nations, would not have ended global warming. They were too small. But the hope of Paris was that the treaty would send such a strong signal to the world’s governments, and its capital markets, that the targets would become a floor and not a ceiling; that shaken into action by the accord, we would start moving much faster toward renewable energy, maybe even fast enough to begin catching up with the physics of global warming. There are signs that this has been happening: The plummeting price of solar energy just this spring persuaded India to forgo a huge planned expansion of coal plants in favor of more solar panel arrays to catch the sun. China is shutting coal mines as fast as it can build wind turbines.

4. David Roberts in Vox, Trump’s Paris climate decision shows the threat rising tribalism poses to the planet

The hallmark of tribalism (a term I prefer to “nationalism,” as it gets at the deeper roots) is that it views the world in zero-sum terms — if one tribe benefits, it is at another tribe’s expense. As has been much remarked (see my post on Trump’s mindset), this describes Trump to a tee. He views all interactions, both personal and international, in terms of dominance and submission.

Tribalism has also entirely subsumed the US conservative movement. The intellectual core has all but rotted; what remains are older, rural and suburban white men and their wives, angry that their tribe is being demoted from its hegemonic position. At a barely beneath-the-surface level, Trumpism is about restoring old hierarchies: the powerful over the powerless, whites over minorities, men over women.

A zero-sum perspective is inherently hostile to collective agreements and treaties. It can only see such agreements as attempts by the weak to bind and restrain the strong (a theme that popped up again and again in Trump’s announcement on Paris). Trump was inclined to see things that way already, no matter what he was told.

That is the backdrop to Trump’s decision. It’s not that Paris particularly constrained him — it didn’t constrain him at all, actually — but the very notion of committing to collective action bothered him (and Steve Bannon). From his perspective, the US has tons of fossil fuels, and that gives the US power. Voluntarily reducing dependence on fossil fuels threatens US dominance.

Trump doesn’t just want that dominance — he wants to signal it, to shove it in other countries’ faces. Staying in the agreement, even if it was substantively meaningless, didn’t send the right signal.

McKibben ended his piece with this:

And so we will resist. As the federal government reneges on its commitments, the rest of us will double down on ours. Already cities and states are committing to 100 percent renewable energy. Atlanta was the latest to take the step. We will make sure that every leader who hesitates and waffles on climate will be seen as another Donald Trump, and we will make sure that history will judge that name with the contempt it deserves. Not just because he didn’t take climate change seriously, but also because he didn’t take civilization seriously.

Maybe it was the McKibben passage I put in bold that led me to call out my own mayor, NYC’s Bill de Blasio, for his transportation hypocrisy, on a radio call-in this morning. (Watch this space next week, for details.) A small step, to be sure, but I intend to take another tomorrow, and the day after, as I know you will as well.

Remembering May 4

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It would be nice if a time-traveler told us that some day May 4 will be remembered not as the day Obamacare began to be dismantled but the day Congress committed to taking on climate change – and doing it with a carbon tax.

As we know, the House voted today to pass a Republican bill that strips away essential features of the Affordable Care Act. The CBO had no time to score the bill; some Members (all Republicans) who voted for it evidently hadn’t read it.

If the Senate votes the same way, an estimated 24 million people and their families will suffer, some of them grievously, so that multimillionaires can pay less taxes and enforce their ideology that casts need as a moral failing rather than an opportunity (or, at least, obligation).

This tweet speaks for a lot of people:

Yet also today, Thursday, a dozen Members of Congress, six from each party, introduced a climate study bill, one that “would create a commission to look for economically viable solutions to climate change,” as reported by Inside Climate News.

Yes, a measly study bill. But one that would create a bipartisan National Climate Solutions Commission directing the Government Accountability Office to survey and rank emission reduction policies. The eventual report, which would likely ratify a national carbon tax of some sort, could offer GOP denialists a way out of their obstructionism.

An identical bill, also called the Climate Solutions Commission Act, failed to pass in 2016. Nevertheless, Inside Climate News said that today’s bill introduction “reflects how a small but increasingly vocal group of Republicans is embracing the reality of climate change and pressing the issue in Congress.”

It’s hard to gauge whether and how much Republicans will ever come around on climate. Nor can we say just how many members who voted today for the GOP’s health care” bill will be drummed out of Congress next year, as Washington Post political blogger Paul Waldman demanded just hours after the 217-213 vote. What we do know is that millions of us are working on defending and trying to extend social and economic and racial justice, including affordable health care, and also organizing for climate.

The May 4 health care vote may prove to be a right-wing Waterloo. And, just possibly, the re-introduction today of the Climate Solutions Commission Act may start the ball rolling for a carbon tax that helps save the climate.

We’ll leave it there. You may want to read our March 17 post about another, Republican congressional climate resolution, along with our updated Conservatives page.

And this just in from ICN reporter Sabrina Shankman: the 12 bill sponsors are Representatives John Delaney (D-MD) and John J. Faso (R-NY), who introduced it, and Reps. Curbelo (R-FL), Deutch (D-FL), Meehan (R-PA), Fitzpatrick (R-PA), Lowenthal (D-CA), Peters (D-CA), Ros-Lehtinen (R-FL), Schneider (D-IL), Stefanik (R-NY) and Suozzi (D-NY). Representatives Faso, Curbelo, Meehan, and Stefanik also signed the 2017 House G.O.P. Climate Resolution linked to directly above.

What the WSJ Got Wrong About the Shultz-Baker Carbon Tax Proposal

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The carbon tax proposal that the Climate Leadership Council unveiled last month upends orthodoxies on both sides of the political divide. It is revenue-neutral, which goes against the desires of many on the Left to invest carbon tax revenues in a “just transition” to clean energy. It distributes those revenues as “dividends” to U.S. families, an income-progressive outcome that frustrates those on the Right who might accept a carbon tax as a way to pay for reducing the corporate income tax, at least in theory.

Editorial endorsements for the Shultz-Baker carbon tax proposal, as of March 1.

We at CTC heartily endorsed the council’s proposal in a blog post hours after its release. So did a dozen leading newspapers, including the Dallas Morning News, the Houston Chronicle, the Financial Times and Barron’s, some of which were likely impressed that the CLC rollout was led by GOP icons James Baker and George Shultz, both of whom held multiple cabinet posts in earlier Republican administrations. But that wasn’t good enough for the Wall Street Journal, whose editorial page sometimes reads as if written by the Koch Brothers-financed, climate change-denying Americans for Prosperity. Its Feb. 25 editorial attacking the CLC proposal, The Carbon Tax Chimera, didn’t so much rebut the proposal as excoriate it.

Messrs. Shultz and Baker responded in a letter in the Journal last Friday, We Thought We Would Hit Your Sweet Spot. Their letter isn’t aimed at the Journal’s editors, who are tethered to hard-right climate denialism, but to the paper’s remaining readers who recognize that catastrophic climate change poses risks to their bottom line (and themselves) and are looking for a policy response they can support. In the same spirit, we present this point-by-point rejoinder to the Journal’s editorial by Dr. Peter Joseph, group leader of the Marin County, CA chapter of Citizens’ Climate Lobby. Dr. Joseph is an outspoken advocate for the fee-and-dividend approach to carbon taxing which forms the heart of the CLC proposal.

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1. WSJ: The climate may change but one thing that never does is the use of climate change as a political wedge against Republicans.

Dr. Joseph: Following Sen. John McCain’s 2008 campaign acknowledgment of climate change, it was Republicans who turned climate change into a wedge issue by conflating scientific uncertainty — a necessary and ever-present part of scientific inquiry — with the well-established scientific consensus about global warming. The Journal seems not to appreciate that the Shultz-Baker plan, tailored to appeal to fiscal conservatives, can serve as Republicans’ escape ladder from this untenable position once they let go of the “I am not a scientist” trope and decide to join every other major political party – including conservative — in the Western democracies and get serious about this threat.

2. Also never changing is the call from some Republicans to neutralize the issue by handing more economic power to the federal government through a tax on carbon.

Revenue neutrality with 100 percent of the revenues returned to U.S. families as carbon dividends actually deprives the federal government of more economic power by channeling all the money back to citizens and reserving decision-making power to households, companies and markets.

3. The risk is that Donald Trump takes up the idea, which would hurt the economy with little benefit to the environment.

A fully refunded carbon tax will cut emissions with greater efficiency and less economic drag than regulations. It also produces greater environmental benefits and promotes business stability. The Climate Leadership Council estimates that by 2025 its plan will reduce CO2 emissions reductions by 28% below the 2005 baseline, meeting America’s Paris commitment. The Carbon Tax Center, modeling a more robust rise in the tax level after the initial $40/ton, estimates that the council’s plan would, by 2030, reduce our annual CO2 emissions from 2005 levels by 40 percent.

4. Such a tax might be worth considering if traded for radically lower taxes on capital or income, or is [sic] narrowly targeted like a gasoline tax.

Some economists recommend tax swaps, with Republican-leaning economists preferring cuts to the corporate income tax and Democratic-leaning ones favoring cutting the payroll tax. But politics point strongly to the dividend approach. The tax code is so complex, and Treasury Department bookkeeping so labyrinthine, that it’s extremely difficult to pull off a tax swap that’s immune to suspicions that the government is “stealing” the money. Accountability is crucial. Plus, the carbon tax has to rise each year, since it can’t start at the high levels that are required without seeming punitive. This requires the public to trust that the tax revenues will actually come back to them. A dividend like the council’s can win their trust, since the dividend checks rise in concert with the tax level.

5. But in the real world the Shultz-Baker tax is likely to be one more levy on the private economy.

Reinjecting billions directly back into the Main Street economy will act as a stimulant, not a drag. When families, particularly at the lower end, receive money regularly, they spend it. Sectors other than the hydrocarbon industry will benefit, and the predictable glide path toward the low-carbon economy will allow industry to adapt.

Former Secretary of State & Treasury James Baker, at the Climate Leadership Conference’s Feb. 8 rollout of its carbon tax proposal at National Press Club.

6. Even if a grand tax swap were politically possible, a future Congress might jack up rates or find ways to reinstate regulations.

The carbon tax signal should escalate predictably, and as long as the public receives the funds they won’t be inclined to revolt, since a clear majority will be made better off. As for wealthier households, many will hardly notice that their dividend checks don’t cover their carbon tax bite. Provided the tax levels are robust rather than token, Congress will have no incentive to “jack up rates” later on. Remember, Washington keeps none of the money.

7. Another problem is the “dividend.” A carbon tax would be regressive, as the poor spend more of their income on gasoline and household energy.

Full dividend return converts a regressive policy into a progressive one. The key is the dividend: since wealthier people have larger-than-average carbon footprints (they buy more stuff, live in bigger houses, fly more, etc.), they’ll pay in, while most middle-income and virtually all low-income families will take out. Models show that close to two-thirds of the population comes out ahead with full revenue return via dividends rebate. Citizens will retain the freedom to lower their consumption and use the spread between their carbon dividend check and carbon footprint costs as an incentive to reduce personal emissions and make some money, if they choose, without being required to do so by the government.

8. The plan purports to solve this in part by promising to return the tax to the American public. But the purpose of taxes is to fund government services, not shuffle money from one payer to another. No doubt politicians would take a cut to funnel into renewable energy or some other vote-buying program.

Taxes fund programs, agencies and services that make America great. But a fully refunded “tax” such as the council’s isn’t really a tax if the government doesn’t keep the money. It’s a fee, not intended to generate operating revenue but to correct a market failure. True, politicians might find it difficult to let huge sums slip through their fingers. As then-ExxonMobil CEO Rex Tillerson quipped in a 2009 speech advocating a revenue-neutral carbon tax, “I know that’s hard for a politician to say.” He suggested the tax be called “a refundable greenhouse gas emissions fee.” The U.S. government will return the funds unmolested as required by law.

9. The rebates would also become a new de facto entitlement with an uncertain funding future.

The dividends will rise initially, then level off and eventually — and predictably — decline as the rising fee does its job of lowering carbon intensity. (That decline is another argument against using the carbon revenue for tax swaps or government programs, as the eventual budget shortfalls would require a future Congress to raise taxes.) At the same time, energy from wind and sunlight, whose fuel is free, combined with efficiencies and innovative processes and products, will stabilize or decrease the costs of goods and services. What matters to citizens is their overall household budgets. There will also be savings in healthcare costs as the air gets cleaner, and presumably military expenditures as we wean off unstable sources of foreign oil.

10. Meanwhile, the energy import fee looks like an appeal to Mr. Trump’s protectionist impulses…The idea is an attempt to export U.S. climate and tax policy with the threat of tariffs, which other countries may resent.

The Journal would do well to look more broadly at the council’s border carbon tariff. It’s an incentive to other countries, a tool to ensure a level playing field for U.S. manufacturers, and an act of leadership by the world’s most vibrant economy. A sustainable climate and a habitable earth require controlling global emissions. Without a global carbon price, too many nations will be unable to fulfill the reduction targets they promised in Paris, which are all voluntary. The global economy is the only enforcement mechanism there is. From a practical political standpoint, without a border carbon tariff no carbon charge will ever get through Congress if it disadvantages U.S. exporters.

11. The tax rate would also be influenced by international climate models that have overestimated the increase in global temperature for nearly two decades.

Must the WSJ editorial page continue to cling to this wearisome canard, in the face of year after year of record-setting temperatures? As for alleged IPCC “overestimates,” presumably referring to the alleged “pause” in surface temperature increases, that spurious claim has been thoroughly debunked. The excess retained heat energy has been going into the oceans, where it’s accelerating the disintegration of the polar ice shelves — dams restraining the great land ice sheets —threatening much higher sea level rise than previously predicted and threatening to inundate vast stretches of our nation’s and the world’s coastal areas.

12. A carbon tax is always pitched as “insurance” against climate change, but no one thinks it will change the trajectory of temperatures.

That might apply to an anemic price signal. It hardly applies to a carbon tax that starts at $40 per ton of CO2 and rises from there. The data indicate that most known fossil fuel reserves must remain in the ground to prevent catastrophic warming. Only a robust price signal can enable markets to resist the disastrous allure of trillions of dollars worth of carbon products. A rising fee on carbon emissions is the most powerful lever we have to phase out fossil fuels as fast as practicable.

13. A 2016 paper from the Cato Institute makes the point that insurance policies hedge risks that are well-known, unlike climate change, whose risks are highly uncertain.

The Cato Institute, known for its climate denial, is hardly a source of sound advice. The scientific consensus tells us that the chances that climate change will wreak catastrophic damage on property, let alone ecosystems and civil society, are far greater than the probability that, say, one’s home will be destroyed by fire. Yet every homeowner has fire insurance.

14. Fossil fuels make up about 80% of U.S. energy; solar, wind and hydropower are more expensive and lack the scale to be a viable substitute.

Fossil fuels rose to dominance through political arrangements that externalized the true costs of dumping their combustion products into the atmosphere and oceans. One can argue that these costs were unknown until now. Today to not know is to deny reality. The carbon tax internalizes those costs, rectifying a massive market failure. Yet even without that tax, solar and wind are rapidly gaining market share and grid parity, and there are no limits to the eventual scope of their deployment. A carbon tax will accelerate this transition.

Harvard economics professor Greg Mankiw at the Feb. 8 CLC press conference.

15. Congress has never shown the self-restraint to collect an estimated $1 trillion in taxes and return it to the public. Any Republican who supported a carbon tax can expect no help from Democrats, who won’t restrain the Environmental Protection Agency.

As Secretary Tillerson observed, it is tough for a politician to utter the words “revenue neutral.” The public will have to demand it, and the business community, understanding that climate disasters are terrible for business, must lobby for it. Elected officials will then follow. The Shultz-Baker plan calls for suspending most EPA authority over CO2, an olive branch to anti-regulation interests. Evidence that Democrats and their environmental allies might be willing to relinquish control over the carbon tax revenue stream can be found in the resolution that California’s Democratic-controlled legislature passed last August calling on Congress to enact a revenue-neutral carbon fee and dividend proposal similar to the Shultz-Baker plan.

16. You won’t read this elsewhere, but what’s driven the recent reduction in U.S. carbon emissions is fracking for natural gas, which might never have happened had a carbon tax been in place.

While it’s undeniable that fracked gas contributed to overall reductions bydisplacing dirtier coal, a recent report by the Carbon Tax Center established that since 2005 the combination of electricity savings from efficiencies and increased wind and solar have played a greater part in reducing carbon emissions tha the replacement of coal by gas. Moreover, efficiency, wind and sunlight — unlike fracking — generate zero emissions of methane, which is also a potent greenhouse gas.

17. Human ingenuity and prosperity are the best insurance against climate change.

Perhaps. But even human ingenuity is hard pressed to overcome broken markets that fail to price carbon emissions’ damages. As Harvard economics professor Gregory Mankiw pointed out in the CLC press conference rolling out the carbon dividend plan (@32 min), a carbon tax is as close to a silver bullet as there is, precisely because it engages the enormous power of money and markets, with minimal risk, in a nonpartisan way. The WSJ should support it.

Dr. Joseph may be reached at pjmd1@me.com. He asked us to note that the views expressed here are Dr. Joseph’s and not necessarily those of Citizens’ Climate Lobby or Citizens’ Climate Education. — editor.

January 21: The New Resistance

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Did you march on Saturday? Well over 3 million people did in 500 cities across the U.S., according to the meticulous list compiled by Professors Jeremy Pressman ( U-Conn.) and Erica Chenoweth (University of Denver). A quarter of a million in Chicago. Two hundred thousand in Denver. Twenty thousand in Houston. As many as 750,000 in Los Angeles. Fifteen to twenty thousand in Nashville, and an equal amount in tiny Montpelier, VT. Four hundred thousand in my New York City. Plus another quarter of a million in dozens of countries from Morocco to Mexico.

Map by Vox from figures compiled by Jeremy Pressman and Erica Chenoweth.

Map by Vox from figures compiled by Jeremy Pressman and Erica Chenoweth.

The resistance to what one observer has labeled “a thin-skinned authoritarian whose only real constituent is himself, and whose intentions, to the extent we can discern them, are to destroy a lot of the things that make this country (truly) great,” has begun with what may have been the largest nationwide explosion of protest in American history.

And, to borrow from our 16th president, “it is altogether fitting and proper” that this new wave of protest was conceived, organized and stamped by women. At the risk of over-generalizing, women incline more than men toward co-operation, mutuality, and inclusivity — attributes that are central to society and survival but are anathema to No. 45.

To quote from the Women’s March Web site:

We stand together in solidarity with our partners and children for the protection of our rights, our safety, our health, and our families – recognizing that our vibrant and diverse communities are the strength of our country… This march is the first step towards unifying our communities, grounded in new relationships, to create change from the grassroots level up… We work peacefully while recognizing there is no true peace without justice and equity for all.

Like most protests, the Women’s Marches had three purposes: for the country and world, including the media, to send a message; for the marchers, to fortify commitment; and for the marchers as well, to instill the belief that we are not alone and that together we can make a difference. From what I saw and felt in New York, and likewise my wife and son in DC and our other son in St. Paul, MN, the women’s marches succeeded brilliantly on all counts.

New York City march, 5th Ave & 42nd St.

New York City march, 5th Ave & 42nd St.

For once, the multiplicity of causes distilled in tens of thousands of homemade signs didn’t dilute the point — it was the point. Tolerance, diversity and difference — the essence of society and nature alike — are now under attack in America as perhaps never before. And of course science, fact and truth. While it was good to see the occasional “Time to Price Carbon” sign, it was appropriate that climate was just one of hundreds of concerns expressed at the rallies.

(And of course the People’s Climate Mobilization — what 350.org is calling “the launch pad for a larger, nationwide movement to fight fossil fuels at the local level” — is just 14 weeks away, on April 29. Click here to participate and organize.)

If the marchers’ joy and solidarity were stirring counterpoint to the brutalism of the swearing-in of the new regime, I experienced a similarly stark contrast on Inauguration Day. My wife engineered the near-miracle of procuring three tickets to the Smithsonian’s new National Museum of African-American History and Culture, and with our son we spent the afternoon there, sheltered from the events unfolding around us in real time.

A tiny fraction of the trans-Altantic slave trade, summarized at the National Museum of African-American History and Culture.

A tiny fraction of the trans-Altantic slave trade, summarized at the National Museum of African-American History and Culture.

We spent most of our time in two of the history galleries: Slavery and Freedom 1400-1877, and Defending Freedom, Defining Freedom: The Era of Segregation 1876-1968. This isn’t the venue, nor am I the vehicle, for a full account of the richness of the experience. (For that, I suggest Holland Cotter’s review, The Smithsonian African American Museum Is Here At Last: And It Uplifts and Upsets, and Wesley Morris’s essay, Visiting the African-American Museum: Waiting, Reading, Thinking, Connecting, Feeling, both in the New York Times.)

What I can report is how my immersion at the “Blacksonian” on Friday deepened my understanding of the mercantile nature of slavery. Panels reporting the ship names, flag, voyage dates, and number of slaves who were boarded in Africa and survived the Middle Passage to the Americas drove home with brutal force not just slavery’s vast scope but the web of contractual and monetary arrangements that undergirded it. “Money money money money money” I whispered to my wife as we gazed at these impassive testaments to greed and suffering. Slavery made white America rich.

As we made our way through the Freedom floor, we saw the promises of emancipation yanked away by the KKK, lynchings and Jim Crow. But the exhibits also told of W.E.B. Du Bois, A. Philip Randolph, and of course the Civil Rights Movement. The story of freedom in America is the story of struggle.

Campaigners for justice have always battled tall odds. I wrote on Nov. 10 that “fighting for a livable planet and a humane society is what I’ve done my whole life. I’m not stopping now, and I know neither are you.” The massive rejection of Trump and the calls for resistance that sounded through the land on Saturday demonstrate without doubt that we’re a movement of millions.

Photographs by the author.

Electricity Savings Have Surpassed Indian Point in Providing Carbon-Free Power to New York

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Supporters of nuclear power wasted little time pointing out how much carbon-free electricity production will vanish from closing the Indian Point reactors 25 miles north of New York City.

As the New York Times reported last Friday, NY Gov. Andrew Cuomo and Entergy Corp. have reached an agreement to shut the twin reactors permanently in 2020 and 2021, respectively. Both units are in their fifth decade of operation. Though their electricity output has finally attained consistently high levels, their checkered record and proximity to New York City have made them an abiding source of concern of safe-energy activists as well as the state’s governor and attorney general.

Replacing Indian Point with carbon-free energy will be a tall order, according to one researcher.

Replacing Indian Point with 100% carbon-free energy will be a tall order, according to one researcher. See graph below for a different take.

Like most operating nuclear power facilities, Indian Point produces a good deal of nearly carbon-free electricity. Charges by some antinuke activists that reactors have sizable carbon footprints are overblown. Most rely on outdated assumptions (e.g., that uranium “enrichment” still takes place in power-guzzling Cold War-era plants) or questionable accounting (charging today’s reactors for putative energy costs of far-future waste storage).

That production gave rise yesterday to the tweet shown at left from Jesse Jenkins, an electricity researcher with the Breakthrough Institute, purporting to “put the Indian Point plant closure into perspective” by showing that its electricity generation dwarfs that of other New York state sources of carbon-free energy.

Jenkins’ figures are probably right (I haven’t checked them, but he’s good with numbers). But they’re incomplete. They omit New York’s share of the largest U.S. source of carbon-free electricity in recent years: the electricity savings embodied in the divergence of total electricity usage from total economic activity.

We quantified that divergence in a new report last month, The Good News (blog summary version here). The bottom line, in numerical terms, is that in 2016 the U.S. was able to avoid generating a little over 500 TWh of electricity — almost one-eighth of the electricity it did produce — because electricity usage barely grew compared to 2005 consumption. (A TWh, one billion kWh, is a convenient metric.)

For reasons we spelled out in the report — structural shifts from energy-intensive heavy manufacturing to service industries; ratepayer-funded efficiency programs in tandem with government codes and standards for buildings, appliances and other end-use equipment; rapid penetration of digital technologies in energy management, product design and manufacturing, to name several — U.S. electricity generation in 2016 will likely be a mere 20 TWh above the 2005 level of 4,056 TWh, rather than in the 4,500-4,600 TWh range it would have reached if nationwide demand for power had grown after 2005 at the same relative rate to GDP that held during 1975-2005.

Estimated NY electricity savings are surpassing Indian Point's carbon-free output.

Estimated NY electricity savings are surpassing Indian Point’s carbon-free output.

Almost by definition, those electricity savings are widely distributed and have taken place in every state. New York’s share may have been greater than the national rate, given its concentration of large office buildings and multifamily housing that are particularly ripe for money-saving energy-efficiency retrofits. For conservatism, we assign 3.8 percent of the 507 TWh of national avoided generation in 2016 to New York, based on its share of U.S. electricity usage in 2014, the most recent year with state data.

That works out to 19.1 TWh of electricity generation avoided statewide last year — all of it carbon-free — because the economy here, in tandem with the country as a whole, reduced its electricity-intensiveness between 2005 and 2016. (We use 2005 as a baseline because it’s both the benchmark year for many climate policy targets and the year in which U.S. electricity use began to markedly detach from economic output.) That figure surpasses by a wide margin the 16.4 TWh of annual electricity production that Jenkins ascribes to Indian Point, as our expanded chart shows.

It is true that electricity savings and nuclear power generation aren’t necessarily in conflict. Shutting Indian Point will require New York State policy, investment and consumers to push harder — much harder — on wind and solar as well as energy efficiency to achieve the carbon reductions that Indian Point now provides and would keep providing if the plant were re-licensed and continually refurbished to permit it to operate indefinitely.

But it is also true that Indian Point isn’t fully complementary with efficiency and renewables. The reactors’ inability to easily vary their output makes it harder for the state electric grid to integrate naturally variable wind turbines and solar power. Indian Point’s presence on the grid also depresses the prices offered for renewable electricity and energy savings alike. Conversely, the prospect of terminating both reactors several years from now will expand the horizons for carbon-free electric energy in New York state on both the supply and demand sides.

We hope this post adds useful context to Indian Point’s now-pending closing. It has been a major source of carbon-free electricity for New York state, but as of 2016 it’s no longer the pre-eminent one. Recognizing the contributions of energy efficiency in reducing greenhouse gas emissions will make it easier to fashion policies and organizing strategies that protect our climate, with or without nuclear power.

No Free Ride for New Climate Outlaw

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Jan. 24, 2017 update: French presidential candidate (and former prime minister) Manuel Valls yesterday renewed Nicolas Sarkozy’s Nov. 2016 call for a carbon border tax on imports from the United States, saying “When Donald Trump declares some kind of economic war on Europe, we must be ready.” More in this Fox News (!) story. 

This post is by Chris Hope, a prominent U.K. climate change policy researcher who served as a lead author and review editor for the Third and Fourth Assessment Reports of the Intergovernmental Panel on Climate Change. It is lifted more or less intact from Chris’s Nov. 15 post, A proportionate response to Trump’s climate plans. We have edited slightly for grammar and added several notes. — CTC.

During the U.S. election campaign, Donald Trump said he would dismantle the country’s domestic climate change policies and withdraw the U.S. from international climate agreements, most notably the Paris agreement which came into force earlier this month. In the week since he became President-Elect, he has given every indication that he is serious in his intentions.

A British climate economist has a policy response to the world's #1 climate denier.

A British economist has a policy response to the world’s #1 climate denier.

So how should the rest of the world respond? It is tempting to indulge in wailing and gnashing of teeth, but in the real world of a Trump Presidency, this is unlikely to be effective. What is needed is a proportionate response. In France, former president (2007-2012) Nicolas Sarkozy has proposed what may well be the most efficient and effective measure, a climate change tax levied upon all US goods imported into Europe.

[CTC: Chris is referring to “border tax adjustments” — import fees levied by carbon-taxing countries on goods manufactured in non-carbon-taxing countries. World Trade Organization rules permit countries with carbon taxes to adopt “non-discriminatory harmonizing tariffs” to protect energy-intensive trade-exposed industries by eliminating the competitive advantage enjoyed by exports from countries that don’t tax carbon emissions. These tariffs also create incentives for non-carbon taxing countries to adopt carbon taxes, since harmonizing tariffs represent revenue that the exporting country could garner by imposing its own carbon tax. Our Border Adjustments Web page has more information.]

How large should such a tax be? If it is to be proportionate, it should cover the harm caused to the Earth from the production of the goods, a harm that will not be reflected in their price if the U.S. presses ahead with the unfettered use of fossil fuels. Let’s consider some ballpark numbers. The Gross Domestic Product of the US in 2015 was about $18 trillion. U.S. emissions of greenhouse gases in the same year were about 7 billion tonnes of CO2 equivalent. Dividing one quantity by the other, we find that every thousand dollars of U.S. production involves the emission of about 0.4 tonnes of CO2 equivalent.

[CTC: Chris’s 7 billion tonne CO2-equivalent figure is sourced to definitive USEPA data and comprises somewhat more than 5 billion tonnes of CO2, one billion tonnes of CO2-equivalent from methane, and perhaps 0.6 billion tonnes of CO2 equivalent from nitrous oxides, hydrofluorocarbons (HFC’s) and other heat-trapping gases.]

The best estimate we have of the global harm caused by these emissions comes from integrated assessment models, like my PAGE09 model which gives a mean value of about $150 per tonne of CO2 if valued by an average citizen in Europe, or $250 per tonne of CO2 if valued by an average U.S. citizen (U.S. citizens are on average about 50% richer than European ones, so they should value an equivalent physical harm more highly).

Applying these mean values as an ad valorem tax on imports of USA goods to Europe results in a tax of about 6%, if the European valuation of harm is used, or 10% with the U.S. valuation. These are higher, but not dramatically so, than Sarkozy’s proposal of a 1–3% tax on US imports.

How much might such a climate tax on U.S. imports raise? The EU presently imports about 400 billion Euros of US goods and services per year. So a 6% tax rate would raise about 25 billion Euros per year, and a 10% rate would raise about 40 billion Euros. If imports of U.S. goods and services have a price elasticity of -1, these revenues would be about 6% or 10% lower respectively.

[CTC: The implied revenue reduction of 25-40 billion euros, or $27-$43 billion in U.S. currency, represents potential U.S. trade losses. They equate to around $100 per capita, or roughly $400 per U.S. family of four.]

If adopted, this idea could be refined further by levying higher rates on U.S. goods that released a great deal of greenhouse gases during their production, and lower rates on others. And of course, in order not to be hypocrites, we in Europe would introduce a strong, comprehensive climate change of about $150 per tonne of CO2 equivalent on our own activities too. But that is only common sense.

To The Left-Green Opponents of I-732: How Does It Feel?

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The Friday-afternoon tweet from Greenwire nailed it: @Koch_Industries & @VanJones68 united in $$ battling Wash. state #carbontax measure.*

Though they could also have tweeted: Fossil-Fuel Right & Doctrinaire Left team up to battle Wash. state #carbontax measure.

Screenshot from Nov 4 tweet by E&ENews. Digitally available via @EENewsUpdates.

“Green jobs” champion Van Jones is flanked by fellow I-732 opponents Charles & David Koch in this Nov 4 tweet. Digitally available via @EENewsUpdates.

The occasion was the news that Koch Industries just poured $50,000 into the coffers of the No On 732 forces. As everyone knows who wasn’t slumbering through the past two decades, the Hard Right takeover of Congress and dozens of statehouses and legislatures owes much to Koch Industries’ prolific bankrolling of reactionary candidates and lobby groups. Brothers Charles and David Koch are billionaires many times over, thanks to Koch Industries’ empire of pipelines, refineries, mines and wells that for generations have spewed carbon pollution into the atmosphere for free.

The Koch brothers are no dummies. They know what fellow fossil fuel exec Robert E. Murray told Kirk Johnson and Coral Davenport of The New York Times the other day: Passing I-732 to enact a carbon tax in Washington state could ignite a trend that “would eliminate the use of all fossil fuels.”

We at the Carbon Tax Center know it too. Which is why we’ve pulled out all the stops to educate Americans from Washington and beyond on the merits of that state’s carbon tax referendum and its potential to kick open the doors to national carbon taxing.

What’s been hard to fathom is the drumbeat from so-called left greens like visionary climate hawk and political activist Van Jones in opposition to the Nov. 8 ballot measure.

In the past two weeks we’ve had to contend with bizarro posts like “Here’s Why a Carbon Tax Helps Fossil Fuel Companies, Not the Environment” (an op-ed in AlterNet by Food & Water Watch) and “Why Exxon Loves the Carbon Tax—and Voters Should Not” (the same group’s op-ed in the ironically named Yes! magazine).

It was just a matter of time before the Koch Bros. cut a check to stop I-732. Meanwhile, the Yes forces have no Exxon money; nor would they take any.

It was just a matter of time before the Koch Bros. cut a check to stop I-732. Meanwhile, the Yes forces have no Exxon money; nor would they take any.

We responded to both last week — before today’s filing by No On 732 revealed that the Koch brothers are helping finance the opposition. Needless to say, only an ideologue could believe that Exxon’s once-a-year opining for hypothetical carbon taxes counts for more than $50,000 in Koch Brothers money against an actual one. (Click here to see the Koch contribution in the No On 732 list.) And sure enough, there was a lot more ideology than reason on display in a press event yesterday in which leading left greens inveighed against I-732.

We were allowed to listen in, but not to speak or ask a question. No transcript or audio has been made available, but here’s a sample of what we jotted down from speakers’ remarks. (Remember, they were addressing a carbon tax that has been meticulously designed to make Washington state taxes less regressive, primarily by dedicating the lion’s share of revenues to slice a full percentage point off the WA sales tax.)

You’re doing climate policy on the backs of the poor. — Van Jones, CEO of Green for All

A “neutral” 732 is perpetuating a one-sided economy of wealth and privilege. This is not a time for more tax cuts for corporations. — Heather McGhee, President, Demos

We stand united to defeat 732. We agree that climate policy cannot be promoted on the backs of the poor. — Mary Kay Henry, president, Service Employees International Union

We’re working on an alternative proposal. There are difficult legal questions. We’re beefing up the struggle after the election. — Rich Stolz, Director, One America

The last quote was in response to a reporter’s question about the alternative to I-732 that the left greens in Washington have talked about for years but never actually written. (Spoiler alert: writing the kind of ballot measure the left greens purport to want is devilishly difficult, in large part because the various groups have competing as well as overlapping interests, which are hard to reconcile. A revenue-neutral measure like I-732 didn’t face that problem.)

The untethering of those quoted statements from the reality of I-732 — a measure meticulously designed around a sales tax cut so low- and middle-income families aren’t harmed — is distressing to me personally. I’m a long-time admirer of every one of the organizations whose leaders I’ve just quoted. As I’ve said many times in this space, I’m a green and I’m on the left. I want to be partnering with Van and Heather and Mary Kay and Rich, not fighting them.

But a carbon tax is too central to climate, and climate is too central to all of our common struggles, for me to sit by and let ideology get in the way of sensible, pragmatic advocacy.

If “friends don’t let friends drive drunk,” it should also be true that activists don’t let activists drive policy from rhetoric.

To Van Jones et al., how does it feel to be on the same side as Charles and David Koch? That’s the corner you’ve painted yourselves into.

*Author’s Note: E&E News tweet lightly edited for clarity.

 

 

 

Washington State’s I-732: A Climate Measure for the Society We Have

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Paul Goodman, a mid-century American apostle of transformational change, entitled a collection of his letters, “The society I live in is mine.” With apologies to Paul, whose unsparing but inspiring critiques of U.S. corporate government helped shape my generation of radical activists, I’m here to say that the Washington state carbon tax initiative, I-732, is the perfect climate measure for the society we have.

Calling out the old guard's "deafening silence" on the Washington state carbon tax.

Calling out the old guard’s “deafening silence” (or worse) on the Washington state carbon tax.

I thought of Goodman today as I read the remarkable “Open Letter from the Millennial Leaders of Carbon Washington and the Yes-on-732 Campaign” to the green establishment leaders who are silent or oppositional on the initiative. Paul was an unabashed champion of youth and an instinctive foe of the old guard, most notably in his best-known book, Growing Up Absurd.

I believe Goodman, renowned for speaking directly, would have relished the millennials’ plain-spoken courage in calling out their heroes’ “deafening silence” on I-732. Devoted to participatory democracy, he would have applauded the millennials’ insistence that the climate crisis “belongs to more than just a handful of non-profit gatekeepers to decide what should be politically realistic and what isn’t.”

I also think that Goodman, a champion of rigor, would have pounced on the insubstantial arguments made by I-732’s “green” opponents, corrected their errors, and alerted them to the absurdity of climate advocates opposing a carbon tax that has advanced to an actual ballot proposition.

Here’s one of those arguments. It’s the first of three bullet points in the message by Washington Conservation Voters telling their members and supporters to vote No:

[I-732] relies solely on economic signals to drive down emissions, which allows all polluters to pay to continue to pollute instead of reducing emissions. Without a carbon cap, we can’t ensure that we will achieve the pollution reductions that are required in state law, but are currently unenforced.

Everything in that paragraph is correct. And all of it is utterly beside the point.

Yes, Initiative 732 relies solely on economic signals to drive down emissions of carbon dioxide. That’s by design. Those signals — higher market prices of fossil fuels — are essential to solve or at least massively shrink the climate crisis. Without them, any climate policy, including the “investment” approach favored by WCV and other green groups opposing or abstaining on I-732, will fall woefully short.

Make no mistake, Carbon Washington, the upstart group that drafted Initiative 732 last year and obtained hundreds of thousands of qualifying signatures to put it on the Nov. 8 ballot, dearly wants society to invest in massive weatherization and solarization of buildings, remediation of polluted communities, better urban and suburban transit, and the like.

So do I. In fact, my other “day job,” aside from running the Carbon Tax Center, is mostly fighting for those very investments and policies in New York City, where I live and work.

Either Carbon Washington or I could have written the first part of WCV’s second bullet:

To reduce carbon emissions quickly, we must not only decrease our use of fossil fuels, we must also rapidly increase our use of clean energy, including solar and wind power and the electrification of transportation. This is the only way for us to transition to a low-carbon economy and significantly decrease our use of fossil fuels.

Well, that transition is precisely what carbon taxes can spark. Raising the prices that businesses and households alike face for coal, oil and gas and for the goods and services manufactured from them will accelerate the society-wide switch to clean energy. Conversely, without those higher fossil fuel prices, solar and wind and electric vehicles and transit will forever be competing with one hand tied behind their backs. Sure, they’ll advance, but not nearly fast and widely enough to push out fossil fuels on the scale our climate requires.

I readily admit — and I’ll wager that Carbon WA will admit as well — that by itself the I-732 carbon tax won’t effectuate that transition either. The tax level specified in the initiative, essentially $25/ton of CO2 after two years, then rising 3.5% a year above general inflation, is too low for that. But that too is by design: the USA’s first statewide carbon tax can’t be super-steep, else industry and agriculture could be hampered vis-à-vis neighboring states, a prospect that would forestall approval by either voters or the legislature.

Rather, the Washington carbon tax is intended as proof of concept. Once a carbon tax has been established in one state, it can be adopted by others, creating a critical mass of political acceptance, demonstrating success in driving down emissions, and disarming the negative arguments on effectiveness, equity and overall feasibility that have stood in the way of a national tax on carbon emissions.

Moreover, as I argued recently, the emerging possibility of a “wave” election transforming the power dynamics in Congress creates a surprise bonus opportunity, in which winning a carbon tax next month in just one state could give tremendous momentum to carbon tax proposals at the federal level.

Even without a Democratic takeover of one or both houses of Congress, the national and global perspective completely moots the insular one inherent in WCV’s complaint that I-732 “can’t ensure that we will achieve the pollution reductions that are required in state law.” Whether or not the particular carbon tax on the Nov. 8 state ballot lets Washington meet those targets is dwarfed by the potential of the carbon tax template to go viral nationally and internationally.

But perhaps the most telltale confusion in that first WCV bullet point is the charge that I-732 “allows all polluters to pay to continue to pollute instead of reducing emissions.” As the saying goes, that’s a feature of carbon-taxing, or indeed any carbon pricing system, not a bug.

Here’s the thing, or two things: first, in our society, polluters get to choose to pollute; what I-732 does is to finally make polluters pay to do so; second, polluters’ choices — and whether we like it or not, “polluters” means all of us who press a gas pedal or turn on a switch as well as the corporate bosses atop the system that limits our agency to choose — are affected by prices.

Every day, in Washington state alone, millions of decisions are made, some almost microscopic (how fast to accelerate up that hill; whether to drive to the nearby mall or the distant one) and some momentous (Boeing’s design and material selections for future aircraft; how it powers its factories) that together determine energy demand and fuel choice and, thus, carbon emissions.

As much as we might wish otherwise, we as a society can’t take away the freedom to make those choices. We can constrain some choices through regulations such as CAFÉ and appliance standards and building codes and the like. We can expand choice through judicious planning. But regulations and planning by their nature can only address one facet of the many-sided carbon equation. A carbon tax, in contrast, operates on every side. (For more on this point, please download and read our 2014 comments to the Senate Finance Committee on energy subsidies vs. taxes.)

We could conjure Adam Smith’s “invisible hand” if the right wing hadn’t co-opted it to prop up its laissez-faire ideology. Let’s say instead that the tax on carbon pollution embodied by I-732 is neither an upending of our market system nor the “clever tinkering with market forces” alleged by an environmental-justice opponent, but an overdue and essential correction — a way to enable markets to finally tell the truth about what fossil-fuel burning is doing to our climate.

The final point to address here is Washington Conservation Voters’ objection to I-732’s allocation of the carbon tax revenues:

Unfortunately, [I-]732 devotes the revenue created by the initiative on tax cuts, instead of strategically reinvesting in clean energy to accelerate our transition away from fossil fuels and fund an equitable transition for workers and disadvantaged communities.

True again, but just a sliver of the whole truth. “Tax cuts” conjures giveaways to the wealthy, but I-732 is the opposite. It applies most of the carbon tax revenues to cutting the state sales tax, a regressive tax like no other that for decades has slammed Washington’s poorest households and communities. The percentage point cut in that tax, to 5.5% from the current 6.5%, allows the carbon tax to yield a net financial gain for most families in the bottom half.

Do the trustees of Washington Conservation Voters fully grasp the game-changing potential of I-732?

Do the trustees of Washington Conservation Voters fully grasp the game-changing potential of I-732?

Imagine if WCV had written the revenue-treatment provisions of I-732 to “reinvest [the carbon tax dollars] in clean energy” and “fund an equitable transition for workers and disadvantaged communities.” Without a doubt, the fossil fuel interests would have blasted the initiative for compounding the financial strains already faced by Washington low- and middle-income families . . . and they would have been right. Branded, correctly, as income-regressive, the carbon tax would have been consigned to a resounding defeat.

Making the carbon tax income-progressive, and not the shibboleth of “appealing to Republicans,” is the main reason Carbon Washington designed Initiative 732 to be revenue-neutral. But that decision has laid bare real fault lines in the environmental community, particularly on energy prices.

Green opponents of I-732 appear to believe that we — Washington, the United States, the world — can craft policies to quickly abandon carbon fuels without rapidly raising their market prices; or that the right energy-investment programs will offset the impacts of those price rises on vulnerable households and communities (a category that since the onset of the financial crisis has grown to encompass perhaps two-thirds of U.S. families).

Proponents believe, as I do, that rapidly raising the market prices of fossil fuels is essential, and that the only sure way to protect households and communities financially is to return the revenues in some progressive fashion. Nationally, that could be via the “dividend” approach propounded by Citizens Climate Lobby. That is probably not practicable for individual state carbon taxes, however, and I believe Carbon WA made the right call to swap out the revenue by cutting the sales tax.

In either case, the carbon reductions sacrificed by returning instead of investing revenue can be recouped by raising the carbon tax rate briskly year after year — a policy that can be enacted if and only if a clear majority of households are made better off or at least kept whole through revenue return.

In closing, let me affirm that I’m a man of the Left. Like Paul Goodman, whom I cited at the top, I’m suspicious of all powerful organizations, private or public. Nevertheless I firmly believe in the capacity of government to do good. If enough other citizens felt the same way, I might well be calling for the investment program that LCV says it wants. Heck, if a majority believed as I do, our country wouldn’t have one of the industrialized world’s most unequal distributions of income and wealth. Instead we would have a social system to support families that stood to lose more from rising fuel prices than they would gain from energy savings.

But we don’t live in that kind of society. We can fight for it, as I and many others in the climate movement do. But we can’t design climate policy for a society we don’t yet have. To turn away from the most potent climate policy instrument we have — one that is now, almost miraculously, being put before the voters of an entire state — would be sheer folly.

Click here for more on I-732, including links to the best and most recent press coverage.