“Why Greens are Turning Away from a Carbon Tax” (POLITICO documents a turning point)

By Robert Bradley Jr. -- December 12, 2018

“The story of the carbon tax’s fading appeal, even among groups that like it in principle, shows the difficulties of crafting a politically palatable solution to one of the world’s most urgent problems — including greenhouse gas levels that are on track to reach a record high this year. ‘This aversion to taxes in the U.S. is high and should not be underestimated,’ said Kalee Kreider, a former Gore adviser and longtime climate activist. ‘I have a lot of scars to show for that’.”

“‘You do have this irony, and that is the policy that is overwhelmingly endorsed by economists of the right, the center, and the left as the best way to reduce greenhouse gas emissions is inverse with what is politically feasible,’ said Barry Rabe, a University of Michigan professor who has studied carbon taxes.”

The fuel-tax riot in Paris. The referendum defeats in Washington State.  The about-face in Australia. The province rebellion in Canada…. (And don’t forget the global coal boom that makes any political jurisdiction’s carbon tax largely irrelevant.) The political elephant in the room could no longer be ignored.

The like-it-or-not, here-we-are headline of POLITICO’s Energy & The Environment feature, Why Greens Are Turning Away from a Carbon Tax,” was subtitled: “Putting an economic price on greenhouse gases is proving a hard sell with the public, even as time to head off climate change shrinks.” It makes the whispers loud. Cap-and-trade died in 2010; the carbon tax lost its halo in 2018. Jerry Taylor, Jonathan Adler, and Josiah Neeley are invited back into the free market, classical liberal camp. Ken Green back at AEI went from Aye to Nay on the issue years ago–can one or more of these three follow?

And don’t forget (Kalee Kreider) that presidential candidate Al Gore ruled out increasing the gasoline tax during his 2000 run!

I have made it clear in this campaign that I am not calling for any tax increase on gasoline, on oil, on natural gas, or anything else. I am calling for tax cuts to stimulate the production of new sources of domestic energy and new technologies to improve efficiency. [1]

The 1,615-word article (what Joe Romm over at Climate Progress would dismiss as defeatist) is reprinted below without comment (add your own hurrays).

Taxing carbon to tackle climate change is one of those big ideas that have long held a kind of bipartisan sway in Washington — endorsed by Al Gore and former members of Ronald Reagan’s Cabinet, economists from both parties and even Exxon Mobil.

But environmentalists are increasingly ready to look elsewhere.

This month’s fuel-tax riots in Paris and the defeat of a carbon-fee ballot measure in Washington state show the difficulty of getting people to support a levy on the energy sources that heat their homes and power their cars. Meanwhile, even the most liberal Democratic candidates this year gave carbon taxes scant if any mention in their climate platforms, focusing instead on proposals like a phaseout of fossil fuels and massive investments in wind and solar power.

The story of the carbon tax’s fading appeal, even among groups that like it in principle, shows the difficulties of crafting a politically palatable solution to one of the world’s most urgent problems — including greenhouse gas levels that are on track to reach a record high this year.

“This aversion to taxes in the U.S. is high and should not be underestimated,” said Kalee Kreider, a former Gore adviser and longtime climate activist. “I have a lot of scars to show for that.”

“I fear that the idea of a carbon tax is turning out to be a heavier lift than people envision,” said RL Miller, founder of the advocacy group Climate Hawks Vote. “As it is right now, starting from scratch, there is no constituency for it. … And I think the climate movement needs to go through some rethinking.”

Sen. Jeff Merkley (D-Ore.) pointed to the fate of Washington state’s proposed carbon fee, which “failed miserably” at the polls last month despite the support of Democratic Gov. Jay Inslee. 

“If it can’t pass in Washington state right now, I’m not sure that says that there’s much of a pathway at this moment nationally,” Merkley said.

Even some progressives who support a carbon tax, such as Rep.-elect Alexandria Ocasio-Cortez (D-N.Y.), are promoting it as just one possible element of a sweeping “Green New Deal” that includes pouring huge amounts of money into renewable energy.

“There’s been a predominant conversation in Washington, D.C., that’s been led by economists and politicos that have tried to frame a carbon tax as the only way,” said Evan Weber, national political director with the Sunrise Movement, which has backed Ocasio-Cortez’s Green New Deal. “It’s proved time and time again to be not politically popular, and we haven’t even priced the policy at where economists say it needs to be. The idea that [a carbon tax is] the way out of this mess is something we need to be pushing back on.”

A carbon tax, imposed on each ton of greenhouse gases produced by fuels like oil and coal, is meant to make businesses and consumers pay a price for their role in worsening climate change — and offer an economic incentive for switching to cleaner energy sources. That simplicity has won the endorsement of even some conservative economists, as well as major corporations such as Exxon Mobil.

“We need to put a price on carbon in markets, and we need to put a price on denial in politics,” Gore said in 2015, adding that “we are already paying an enormous cost in the form of floods, droughts, famines.”

Still, new taxes are toxic enough in Washington that former President Barack Obama never endorsed the idea. Instead, he backed unsuccessful legislation that would have created a more complicated cap-and-trade system to put a price on carbon.

The notion has proved an equally tough sell elsewhere around the world: Only 11 countries have carbon taxes in place, and most of those were instituted more than a decade ago. Australia canceled its carbon tax in 2014 after three years, and Canada is in the process of imposing a carbon fee on some reluctant provinces.

Carbon tax supporters, such as Canadian Prime Minister Justin Trudeau, have typically sought to make their proposals more politically palatable by returning much of the money to citizens to offset the higher energy prices. Gore has proposed repaying the money to Americans “dollar to dollar” by eliminating payroll taxes.

Some plans would direct the money to investments in clean energy investments, or — in the case of Washington state’s proposal — toward helping communities suffering from the effects of climate change or the closure of fossil fuel industries. Others, such as a plan backed by former Republican Secretaries of State George Shultz and James Baker, would also phase out existing carbon regulations.

But the Washington state proposal won the support of just 43 percent of voters last month, after a barrage of oil and gas industry lobbying opposing the carbon fee. The reaction was violent in Paris, where days of riots forced French President Emmanuel Macron to scrap a 6.5-cent fuel tax that had been aimed partly at weaning motorists off diesel and gasoline.

The Washington state fee, whose supporters included Microsoft co-founder Bill Gates, would have charged a relatively modest $15 per ton of greenhouses gases. In contrast, the United Nations’ climate panel has called for charging $135 per ton, and increasing the fee to $5,500 a ton by 2030, to keep the rise in global temperatures from reaching catastrophic levels.

“You do have this irony, and that is the policy that is overwhelmingly endorsed by economists of the right, the center and the left as the best way to reduce greenhouse gas emissions is inverse with what is politically feasible,” said Barry Rabe, a University of Michigan professor who has studied carbon taxes.

The failure to pass a carbon tax in Washington state stands in contrast to California voters’ backing last month of an increase in the gasoline tax, revenues from which are directed to improving the state’s clogged transportation infrastructure. California is one of more than two dozen states that have increased their gasoline taxes in the past five years to pay for road and bridge projects.

“People are sensitive to taxes, but they will approve them if they’re perceived to be getting value, whether that be a road, a hospital, a school,” said Kreider, the former Gore adviser. “Where I think environmental groups struggle is they approach carbon pricing in terms of environmental performance, instead of what service are they providing to the taxpayer?”

Green groups say there’s still a place for a carbon tax in a broader climate change policy. But Ocasio-Cortez, one of the top progressives in next year’s House freshman class, has said the climate crisis is far too urgent for a tax to be the main strategy.

“It’s certainly possible to argue that, if we had put in place targeted regulations and progressively increasing carbon and similar taxes several decades ago, the economy could have transformed itself by now,” she said on her campaign website. “But whether or not that is true, we did not do that, and now time has run out.”

“Probably a price is not going to be enough,” said Ana Unruh Cohen, managing director for government affairs for the Natural Resources Defense Council. “We need a larger, comprehensive approach.”

The wave of Democratic governors and lawmakers elected in November seems to have picked up on this current. Aside from Washington state’s ballot item, carbon taxes were mostly absent from campaign platforms despite candidates’ emphasis on fighting climate change.

Others aren’t ready to give up just yet, saying a revenue-neutral carbon tax is the most sweeping greenhouse gas-reduction policy that both parties could support. Reps. Ted Deutch (D-Fla.) and Brian Fitzpatrick (R-Pa.) unveiled a bill on Nov. 27 to create such a tax. That was just months after Rep. Carlos Curbelo (R-Fla.) launched a plan that would have taxed emissions and used the revenue for highway projects and other programs, before he lost in the November elections.

Sen. Sheldon Whitehouse (D-R.I.), who has sponsored his own carbon tax legislation, said two main strategies have emerged to limit climate change: regulating stricter greenhouse gases or putting a price on carbon. He doesn’t see another path.

“There’s the third category, which is ‘something else,'” Whitehouse told POLITICO. “And until somebody shows me what something else is, I don’t want to hear about something else.”

Carbon tax backers say the approach has proved successful in places such as British Columbia, Ireland and Norway. And other strategies to price carbon have gotten footholds, such as the cap-and-trade program found in nine Eastern states.

Others say a carbon tax could easily become part of the Green New Deal or other broad-based plans as they are fleshed out.

“When you talk about the Green New Deal and 100 percent clean economy, I see those as values frameworks, and they don’t have policy prescriptions on how to get there,” said Alison Cassady, managing director for energy and environment at the liberal Center for American Progress. “In order to achieve a 100 percent clean economy, you’re going to need a lot of tools. A carbon tax could get you there part of the way.”

Some supporters say the biggest problem for carbon tax proposals has been how they were designed — and defeats in places like Washington state are not a rejection of the overall concept.

“I don’t think we lost on the merits,” Michael Brune, executive director of the Sierra Club, which campaigned for the Washington ballot initiative. “I think we lost on the inability to transmit the message. I do think that, yes at some point, perhaps it might make sense to take the revenue generated from a carbon fee broadly defined and use it for other purposes.”

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[1] Al Gore, quoted in Bennett Roth, “Gore Drops Fuel Tax Proposal, Introduces Tax Credit Incentives,” Houston Chronicle, June 29, 2000, p. 10A.