House hearing on climate change an opportunity to present solutions
Instead of bashing Obama’s plan, opponents can offer alternatives, like the market-based approach of a revenue-neutral carbon tax
As a topic of discussion in the House of Representatives, climate change has been missing in action these past few years. That will change Sept. 18, when the Energy and Power Subcommittee of the Energy and Commerce Committee holds a hearing that will shine a spotlight on this long-ignored issue.
There are many reasons why this hearing is timely and overdue:
- In May this year, the concentration of carbon dioxide – the principal greenhouse gas heating the Earth’s atmosphere – exceeded 400 parts per million (ppm). The last time the Earth saw this level was some 3 million years ago, when humans did not exist and sea levels were 60 feet higher.
- The Intergovernmental Panel on Climate Change is about to release its fifth report, in which the certainty that humans are causing the Earth to heat up has increased from 90 percent to 95 percent.
- The West is ablaze this year with deadly and destructive wildfires, made more numerous and intense by drought and tree-killing insects now thriving in warmer temperatures. The Rim fire near Yosemite National Park in California is the latest conflagration grabbing headlines.
- The World Bank reports that, given our current trajectory, we can expect 4 degrees Celsius of warming by the end of the century, with catastrophic consequences for food production, water supplies, sea level rise and civil unrest. Concerned about climate change and its affect on impoverished nations, the Bank announced this year that it would no longer fund coal-fired power projects, except in rare circumstances.
None of these pressing points, however, are likely to be explored in the Energy and Power hearing. Instead, the hearing, titled “The Obama Administration’s Climate Change Policies and Activities,” is destined to be a platform for attacking the President’s climate plan.
Because of congressional intransigence on climate change, Obama announced steps his administration would take to reduce greenhouse gas emissions, including EPA regulations on new and existing power plants. The regulatory remedy proposed by the President appears to be the primary target of the Energy and Power hearing. The letter to EPA Administrator Gina McCarthy, inviting her to testify and requesting voluminous information going back to the Bush administration, has all the trappings of a fishing expedition.
Given the urgent need to reduce the risk of climate change, the Sept. 18 hearing must be more than an attack on the President’s plan. If leadership on Energy and Power – and the rest of the House – finds EPA regulations to be an unacceptable solution, they should discuss alternative proposals. The most promising solution – one gaining support across the political spectrum – is a revenue-neutral carbon tax that gives proceeds back to the public.
There are a number of experts among conservatives who could testify about this market-based approach:
- Art Laffer, former Reagan economic adviser: “Reduce taxes on something we want more of–income–and tax something we arguably want less of–carbon pollution. It’s a win-win.”
- Greg Mankiw, economic advisor to George W. Bush and Mitt Romney: A “proposed carbon fee — or carbon tax, if you prefer — is more effective and less invasive than the regulatory approach that the federal government has traditionally pursued.”
- Andrew Moylan, R Street Institute: “A revenue-neutral carbon tax coupled with regulatory reform could achieve the same goal the president seeks to address without expanding government or contracting economic opportunity.”
- Gary Becker, Nobel laureate economist: “A carbon tax would encourage producers and consumers to shift toward energy sources that emit less carbon… And revenue neutrality means that it will not have fiscal drag on economic growth.”
- George Shultz, former Secretary of State: “We have to have a system where all forms of energy bear their full costs… and to me the most appealing way is a revenue-neutral carbon tax.”
Energy and Power Chairman Ed Whitfield (R-KY) should invite these experts to testify at the hearing. Their testimony could stimulate long-overdue movement in Congress to enact effective climate and energy legislation. Given what’s at stake for future generations, just saying “No!” is not an option.
Why a revenue-neutral carbon tax?
A wide range of economists believes that the market, rather than the government, is the best vehicle for solving the climate problem. But the market fails when there’s a distortion in the price of something. Such a distortion exists with fossil fuels, whose price does not reflect the cost of damage done to society – health costs related to air pollution, security costs related to imported oil, extreme weather damage made worse from climate change. Adjust the price to account for those costs, with a gradually-increasing carbon tax, and the market will work its magic. As renewable energy like solar and wind becomes competitive with and eventually cheaper than coal, oil and gas, the economy will transition to clean energy and greater fuel efficiency, lowering greenhouse gas emissions.
Citizens Climate Lobby suggests a tax that starts low — $15 per ton of CO2 – and ramps up aggressively, adding $10 per ton each year. For the sake of simplicity, the tax should be applied as far upstream as practical. Distributing the carbon tax revenue back to the public, preferably through equal payments to all households, would give consumers the additional income to deal with price increases associated with the carbon tax. It is that payback to households that enables an aggressive approach – needed to get the necessary greenhouse gas reductions – without being a drag on the still-fragile American economy.
Making the carbon tax revenue-neutral aligns with the Republican principle of keeping the federal government from growing larger.
Some would argue, rightfully so, that reducing U.S. emissions will have limited effect on global CO2 if China, India and other nations continue to pollute at accelerating rates. That’s why it is important for a carbon tax to include border adjustment tariffs on imports from nations that don’t have equivalent carbon pricing. Rather than enrich the U.S. Treasury, other nations will want to implement their own carbon tax and keep that revenue within their borders. Such tariffs should comply with WTO rules, as they would only be for the purpose of maintaining a level playing field.
Attempts to block EPA rules will prove futile
Efforts to block new EPA regulations are destined to be an exercise in futility amounting to little more than political grandstanding. Such legislation has no chance of moving in the Democrat-controlled Senate. Even if it passed in both chambers, the President would veto any such bill.
Equally futile would be attempts to block CO2 regulations through the court system. In 2007, the Supreme Court ruled that the EPA has the authority and the obligation to regulate greenhouse gases that contribute to global climate change. And just last year, a three-judge panel from the U.S. Court of Appeals for the District of Columbia upheld a finding from EPA that greenhouse gas emissions endanger public health.
So, if congressional opponents want to do more than make ineffectual noise about climate-related EPA regulations, what’s the best course of action?
The President has said all along he would prefer to have Congress enact a “bi-partisan, market-based solution” on climate change. While Obama has started the clock running on EPA regulations, it will take a year or two for such regulations to be developed and implemented, enough time for Congress to deliver that “market-based solution” in the form of a revenue-neutral carbon tax that gives proceeds back to the public.
Support growing for a carbon tax
Over the past year and a half, more than a dozen newspapers across the U.S. have endorsed the carbon tax as the preferred policy to deal with climate change. The Washington Post, which has editorialized extensively on the carbon tax, offers the most recent example:
Congress should make polluters pay something for the pollution they cause by establishing a reasonable tax on the carbon dioxide contained in oil and other fossil fuels. Without all the congressional micromanaging, the policy would nudge consumers to use less fuel, it would give investors incentive to divert their money to the clean technologies that will do the most good.
Excerpts and links to other editorials are available here.
DO THE MATH ON GLOBAL WARMING
In his Rolling Stone article, “Global Warming’s Terrifying New Math,” climate activist Bill McKibben points to three numbers that sum up the urgency of the situation we find ourselves in:
- Two degrees Celsius: the amount, according to international consensus, that we can raise the global average temperature above preindustrial levels and still maintain a so-called “safe” climate, beyond which all bets are off. “Safe,” of course, depends on where you live. We’ve already raised it almost one degree, with disastrous results; if you live in Africa, or Kiribati, one degree is too much.
- 565 gigatons: the amount of CO2 scientists agree we can still pump into the atmosphere and hope to remain below the two-degree threshold.
- 2795 gigatons: the amount of CO2 contained in the world’s proven fossil-fuel reserves, which the fossil-fuel industry shows every intention of extracting and burning.