A climate solution conservatives can embrace
By Gary Witt
As a conservative, I was delighted when a number of Republicans in the Senate voted to confirm the existence and importance of climate change. As Mark Reynolds pointed out in a previous blog, five GOP senators voted for a resolution – one of the amendments offered during the Keystone pipeline
deliberations – stating that climate change is real and human activity significantly contributes to it. Fifteen voted for a similar resolution that omitted the word “significantly.”
As conservatives and Republicans who are concerned about climate change, the members of the CCL Conservative Caucus understand the challenge these Republican politicians face. When politically conservative Americans acknowledge that climate change is real, man-made and dangerous, they are confronted with the big question:
What can we do about it?
As conservatives, we want a small, effective government. Unfortunately, energy policy in the United States often confirms our worst stereotypes of politicians. Peter Grossman’s excellent book U.S. Energy Policy and the Pursuit of Failure is a sad story of billions and billions of dollars wasted by politicians (of both parties) looking to peddle favors and buy votes. In this video from the Hudson Institute, Grossman talks about his book in detail, but be warned, policy experts who have followed U.S. energy policy for decades are a cynical bunch.
As Grossman says, when confronting legislation to intervene in markets, economists like to begin by asking, “What market failure does this legislation address?” Throughout various energy “crises” in previous decades, all too often, there was no market failure. Laws were passed that did more harm than good.
As conservatives, we got involved with CCL because we understand the risks of unrestricted greenhouse gas emissions going into the atmosphere. There is no doubt. Climate change is a market failure. Fossil fuels burned today earn profits today. The costs will come later.
Climate change is a big and difficult problem because the foundation of our global industrial civilization is based on fossil fuels. Reducing and eliminating emissions from burning those fuels will require enormous, fundamental changes to our economy. In light of our history of waste and incompetence with policies confronting energy crises of the past, is there any hope of effectively addressing climate change without mortally wounding our economic life?
There is, but it requires significant change. When it comes to carbon emissions, we can no longer afford business as usual. When it comes to government energy policy, we can no longer afford politics as usual. Business as usual could destroy our environment; politics as usual could destroy our economy.
The Carbon Fee and Dividend plan advocated by CCL puts a price on carbon and returns all the money to all the people. It is not business as usual. It is not politics as usual. Read the details about it here.
CCL commissioned a well-regarded econometric modeling firm, Regional Economic Models, Inc. (REMI), to examine the impact of Carbon Fee and Dividend over a twenty-year period. The study showed that the likely impact is a modest addition to both employment and GDP.
It is imperative to effectively address climate change at the lowest cost. Across the spectrum, economists of the right and the left agree that the most economically efficient way to address the market failure causing climate change is to put a price on carbon. Many conservative thought leaders have endorsed a price on carbon in one form or another, as long as the revenue raised is not used to grow government. They support it because it is an option that addresses climate change at the lowest cost.
If you are skeptical REMI’s conclusions, read Holman Jenkins in the Wall Street Journal last week:
“A carbon tax as part of pro-growth tax reform might pass a cost-benefit test mainly thanks to the nonclimate benefits of tax reform.”
To be clear, Jenkins does not believe our Congress could ever pass such thoughtful legislation. His skepticism is about the politics, not the economics.
Early in January, another noted conservative thought-leader, Charles Krauthammer advocated a $1 per gallon tax on gasoline with reductions to the FICA tax to create revenue-neutrality.
Both Jenkins and Krauthammer see the economic rationale of a revenue-neutral carbon tax. Like Jenkins, Krauthammer is skeptical that the political will exists to pass it.
It’s a catch-22. Many conservatives would support it, if it would pass. It would pass, if they would support it. What’s needed, of course, is the political will CCL works to create. If we build political will, conservative legislators will come.
Gary Witt is the CCL Conservative Caucus Media Coordinator.