Eight prominent US Republicans are advocating that the Republican Party should lead action on climate change by introducing a carbon tax, with distribution of the revenue raised to all Americans (a Carbon Dividend). While this may move the debate forward in the USA, the plan is parochial, blind to the range of environmental issues threatening the world, and seeks to maintain current economic and social power structures in the USA and globally.
Eight prominent US Republicans have recently produced a short paper advocating action on climate change, in particular, the need for a conservative solution to the problem of carbon emissions (https://www.clcouncil.org/media/TheConservativeCaseforCarbonDividends.pdf ). The group includes six who held senior executive positions in the Nixon, Reagan, Bush Snr and Bush Jnr administrations, the chairman of Walmart and the CEO of the Climate Leadership Council, the publisher of the report.
Recognising the growing evidence of climate change and its associated risks, the authors see the coincidence of a Republican President and Republican control of Congress as a golden opportunity ‘to promote a climate plan that showcases the full power of enduring conservative convictions’, most significantly free markets and limited government. The benefits they claim will flow from their proposals are a stronger economy, help for working-class Americans, reduced regulations, protection of the US’s natural heritage and consolidation of a new era of Republican leadership.
The Carbon Dividends Plan (as the proposal is called) has four pillars:
- A tax on carbon dioxide emissions that would begin at US$40 per ton and increase steadily over time. This would be levied at the point where fossil fuels enter the economy, for instance at the mine or refinery for domestically produced fossil fuels and the port for imported ones.
- The carbon tax would be revenue neutral to the government through monthly distribution of the proceeds to all Americans (the Carbon Dividend). The authors estimate that at the starting price of US$40 per ton a family of four would receive about US$2,000 a year, although who exactly would qualify for the Dividend is not canvassed. The Dividend is seen as a strong generator of popular support for the plan, particularly by elevating the economic prospects of the nation’s politically and economically disaffected, the people to whom Trump spoke during his election campaign. Carbon Dividends would ‘disproportionately [help] those struggling to make ends meet [and] for once, tip the economic scales towards the interests of the little guy’.
- Tax refunds on exports and tariffs on imports based on the carbon content of the goods and the carbon pricing policies of the foreign trading partner. This is seen as necessary to protect American business competitiveness and punish free-riding nations.
- Elimination of environmental regulations in the US, including repeal of the Clean Power Plan. The EPA’s regulatory controls would become unnecessary, the argument goes, as the carbon price increases.
The authors see the Carbon Dividends Plan as delivering the (capitalist) Holy Grail of reduced carbon emissions, policy and investment predictability, more durable economic growth through increased investment, innovation and consumption, less ‘heavy-handed’ government regulation of greenhouse gas emissions, and hence greater flexibility for companies to decide how they reduce their carbon footprint. The emphasis on the benefits for disaffected ‘working-class Americans’ (interesting that the authors should refer to the very un-American idea of class) is a response to ‘growing populist sentiment’ that the authors perceive ‘threatens the current policy consensus in favour of liberalized trade and investment’. This critique of populism could be seen as a soft swipe at Trump’s election campaign and current behaviours and policies.
The authors recognise that a majority of Americans, including Republican supporters, worry about climate change and support a carbon tax and they are critical of the many Republicans whose opposition to action on climate change ‘reflects poor science and poor economics’ – ‘the GOP ignores [climate change] at its own peril’, they say. Thus the paper is an explicit call to Republicans to change course and lead the establishment of market-based rather than ‘growth-inhibiting command-and-control’ solutions to climate change. With a view to electoral success, the authors believe that this plan has the potential to appeal to the growing numbers of younger people, Latinos and Asians who are all concerned about climate change. Although they also hope to garner bipartisan political support for the plan.
It would be curmudgeonly not to see this plan as a significant positive development in the politics of climate change in the USA. Influential establishment Republicans are proposing that their party take the lead in tackling climate change by establishing a carbon tax that will effectively reduce carbon emissions while simultaneously providing economic assistance that will be most appreciated by those Americans who feel that they have been left behind in recent decades. Great!
But let us not be fooled by what this proposal does and does not contain. First, limitless economic growth, ever increasing consumption and market-based solutions go unquestioned. I would expect nothing less from a policy that originates in the USA from hard-core Republicans. However, any serious analysis of the environmental (more on this below) problems facing the world must accept at least the possibility that capitalism as an economic tool (forget capitalism as a political rallying call or an ideology) may not be capable of delivering an environmentally sustainable world. It certainly cannot deliver an equitable one – no mention of this in the paper.
Second, apart from sketchy claims that the proposal will help with ‘stabilizing an unstable world’, it is completely focused on US domestic policy and goals. Again, that’s hardly surprising but the world is in this crisis together, no nation can survive alone, and it isn’t only about looking forward. ‘Western’ nations have developed, and continue to develop, economically and socially by pumping vast amounts of carbon dioxide into the atmosphere. They now have a tremendous responsibility to assist (financially and technologically) the poorer, less developed nations – that have contributed almost nothing to the carbon problem and which are often the most vulnerable to the effects of climate change – to develop economically while remaining low emitters. Until nations like the USA accept and respond to this responsibility, we will be unlikely to solve many global problems.
Third, in a triumph of editing, the authors have produced a policy on climate change that never, not once, mentions the environment per se or environmental sustainability or renewables (in general or by reference to, for instance, wind or solar). In fact, the only mention of a specific technology in the document is ‘Carbon pricing would also encourage domestic nuclear energy, further promoting climate stability and America’s energy independence’. And there is no recognition whatsoever of the existence of, or need to control, the extremely health-damaging gaseous and particulate pollutants emitted from burning fossil fuels.
In essence, while this policy is a praiseworthy attempt to shift Republican Party sentiments and policy on climate change, it is parochial and completely blind to the range of catastrophic environmental threats facing not only the USA but all nations and people of the world. It is in reality completely focused on maintaining current class and social relations in the USA, perpetuating the power and economic status quo globally, and establishing a sustained period of Republican Party control of federal US politics. It is fatally inadequate as a solution to climate change but if the perfect is the enemy of the good, perhaps it should receive qualified support if it can move the carbon-addicted, politically divided USA forward.
Peter Sainsbury is President of the Climate and Health Alliance (www.caha.org.au).