5 conservatives arguing for a price on carbon

Art Laffer, conservatives on carbon pricing

Conservative economist Art Laffer, who is now advising President Trump on tax policy, advocates for carbon pricing in this video “Change What We Tax.”

5 conservatives arguing for a price on carbon

By Alex Amonette

When I was 17, I smoked about a pack of cigarettes a day. I left my rural home, moved to New York City, got an apartment and a job, took the subway to work and then they raised the price of cigarettes 25 cents. On my own and on my tiny budget, I couldn’t afford it. So, I quit smoking. It was one of the hardest things I’ve ever done, but it took just a week. Moral of the story: they raised the price on something I did not need, and I changed my behavior.

Many conservative economists and legislators say the same principles will work to reduce carbon dioxide emissions. Here are five of those conservatives and the arguments they make in favor of legislation that will price carbon.

#1: Art Laffer

Art LafferLaffer was a member of President Reagan’s Economic Policy Advisory Board from 1981–1989 and is currently advising President Trump on tax policy.

“If you’re going to handle global warming, you can do it in such a way that actually does not hurt the economy,” he says in “Change What We Tax,” a video posted by RepublicEn. “A carbon tax would be less damaging dollar for dollar than a progressive income tax.”

#2: George P. Shultz

Shultz served as Secretary of State under President Reagan from 1982–1989.

George Shultz“Let’s level the playing field for competing sources of energy so that costs imposed on the community are borne by the sources of energy that create them, most particularly carbon dioxide,” Shultz says in his 2015 opinion piece for the Washington Post. “A carbon tax, starting small and escalating to a significant level on a legislated schedule, would do the trick. I would make it revenue-neutral, returning all net funds generated to the taxpayers so that no fiscal drag results and the revenue would not be available for politicians to spend on pet projects.”

#3: Jerry Taylor

Jerry TaylorTaylor is the president and founder of the Niskanen Center, a libertarian think tank.

In “The Conservative Case for a Carbon Tax,” Taylor says, “A carbon tax quantifies in dollar terms the risk associated with emitting greenhouse gases into the atmosphere, although how well those risks are reflected in the tax depends upon policy design and the assumptions behind that design. Climate risks, after all, are associated with costs, and those costs are not accounted for in the price for fossil fuels at present. Prices for fossil fuels (the main source of man’s greenhouse gas emissions) do not reflect the total costs associated with consumption. Consumers consequently buy more fossil fuels (and generate more greenhouse gases) than would be the case if the information embodied in fossil fuel prices were accurate. The most direct way to better inform market decisions is to correct inaccurate price signals with a tax.”

#4: N. Gregory Mankiw

Gregory MankiwMankiw served as chairman of the Council of Economic Advisers under President George W. Bush from 2003–2005 and in 2006 became an economic adviser to Mitt Romney.

In the New York Times article “A Better Tax System (Assembly Instructions Included),” Mankiw doesn’t directly address pricing carbon, but he illustrates the economic argument for that type of policy by discussing the gasoline tax.

“A good rule of thumb is that when you tax something, you get less of it,” he explains. “That means that taxes on hard work, saving and entrepreneurial risk-taking impede these fundamental drivers of economic growth. The alternative is to tax those things we would like to get less of. Consider the tax on gasoline. Driving your car is associated with various adverse side effects, which economists call externalities. These include traffic congestion, accidents, local pollution and global climate change. If the tax on gasoline were higher, people would alter their behavior to drive less. They would be more likely to take public transportation, use car pools or live closer to work. The incentives they face when deciding how much to drive would more closely match the true social costs and benefits.”

#5: Bob Inglis

Bob InglisInglis represented South Carolina in Congress from 1993–1998 and again from 2004–2010. He is the executive director of RepublicEn, educating fellow Americans about free-enterprise solutions to climate change.

“What if we were to reduce taxes on income and shift the tax onto pollution?” Inglis asks in the “Change What We Tax” video quoted above. “What if we did that by eliminating all subsidies for all fuels, and attaching all costs to all fuels, following the free enterprise principle of accountability? Then we’d see the free enterprise system delivering the fuels of the future.”

In a joint opinion piece with Laffer, Inglis writes, “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. [B]oth Democrats and Republicans could support a carbon tax offset by a payroll or income tax cut.”

#6, 7, 8…

These conservatives are not alone. Many economists support using carbon fees to move us, and the world, on to clean, renewable, non-polluting energy sources. Many conservative organizations also support pricing carbon, such as the R Street Institute and the American Enterprise Institute.

Citizens’ Climate Lobby is nonpartisan, but we’re interested in getting both conservatives and progressives on board with this sensible, effective solution. CCL calls for a revenue-neutral Carbon Fee and Dividend in which the net revenues collected go right back to American households as a monthly dividend check or automatic deposit in our bank accounts. This does not grow the government. As George Shultz says, “It’s not a tax if the government doesn’t keep the money.” To see which conservative thought leaders, national security leaders and others support climate action or have endorsed carbon fee and dividend, log in or sign up for CCL Community and check out the full list.

We’ve had enough smoke and mirrors with people saying we can’t have a good economy, create jobs, and reduce our emissions. We can, we must, and with your help, we can work with our representatives in Congress to reach a bipartisan agreement to enact the Carbon Fee and Dividend.

Since the carbon fee increases steadily, the dividend also increases, which benefits Americans in several ways:

  • A family of four would receive $288 per month, or $3,456 per year, after 10 years, and $396 per month after 20 years.
  • Products made with clean energy become relatively less expensive, and consumers have more money to spend.

The Carbon Fee and Dividend can usher in true energy freedom, job growth, and lower emissions. And what could we do with our dividend checks? Insulate your home, or take that vacation you’ve been putting off. Buy energy efficient appliances, or go out for a nice dinner. Maybe treat yourself to a bright red electric car!

We can reduce emissions while growing jobs and supporting the economy as a whole. As Bob Inglis reminds us, “It’s an incredible opportunity.” Let’s seize it.

Alex Amonette
Alex Amonette is a freelance technical and grant writer/editor, lives in cattle and sheep country, and raises vegetables and hay.