Editorial: Republicans' carbon tax proposal

Establishment Republicans who recently unveiled a carbon tax plan have narrowed a sharp divide and given conservatives a fresh seat in the global warming debate.
Establishment Republicans who recently unveiled a carbon tax plan have narrowed a sharp divide and given conservatives a fresh seat in the global warming debate.
Published Feb. 23, 2017

Whether a tax on carbon would be the most effective or even the most politically viable approach to addressing climate change remains to be seen. But establishment Republicans who recently unveiled the plan have at least narrowed a sharp divide and given conservatives a new seat in the global warming debate. This is one area where Republicans in the White House and Congress could work with Democrats on an issue vital to public health, national security and the economy.

The proposal, released by the Climate Leadership Council, is simple to understand, easy to administer and popular in its appeal. The federal government would impose a tax on carbon emissions. The initial levy, set at $40 per ton, would raise up to $300 billion a year and increase over time. The proceeds would be distributed through a "carbon dividend" to Americans, paying out an estimated $2,000 per year for the average family. To keep U.S.-made products competitive, the government would impose a border charge on imports from nations that don't have a similar plan in place.

As a practical measure, this proposal could garner broader support for climate action than anything currently on the table, both for its market approach and for the skin in the game that producers and consumers alike would have in reducing carbon emissions. A tax would give industries and consumers an incentive to reduce their carbon output and seek cleaner energy options. Erecting trade barriers to put producers worldwide on a level playing field is in keeping with President Donald Trump's trade policy. The plan is simpler for businesses to understand and the government to enforce than earlier policy alternatives, such as the system of capping and trading carbon credits. And by giving industry and the public a stake in the outcomes, the plan would bring a wider audience into the climate discussion and increase public appreciation of warming-related impacts.

The proposal, authored by Republican elder statesmen such as James A. Baker III and George P. Shultz, former secretaries of state, and other former advisers to Republican administrations, also gives the party a chance to claim a stake on what's been largely a progressive issue and a chance to shape climate policy on conservative terms. The plan calls for relaxing regulations, including the outright repeal of the Obama administration's Clean Power Plan, and other measures to protect the fossil fuel industry. Cutting red tape, the role of government and the regulatory burden would all, as conservative theory goes, work to give business the certainty it needs to invest.

The question is whether this proposal would be more effective in reducing emissions than the Clean Power Plan, which is on hold pending legal challenges. Democrats may also be loath to repeal a plan that at least provides a guide path and that has helped garner global commitments from other major world polluters to cut their own emissions. Sponsors also need to explain why any tax dividend should be handed out across the board rather than be reinvested in clean energy technology and production. And would a more market-based approach prompt other countries to relax their own official efforts and targets to reduce emissions?

Still, this proposal advances the debate beyond questioning the science of climate change or even the extent that man-made emissions are to blame, and its focus on results rather than the process to achieve them should open up political ground for both sides. Credit the establishment for giving Republicans a remake in keeping with their principles.