Global warming phonies
By Scott Sumner
I seem to be one of the relatively few right-of-center intellectuals that worry about global warming. In previous posts I’ve argued that if the GOP were smart (no jokes please) they would propose the following policy:
1. Global warming is a crisis for our planet, and it’s time to stop playing politics with the issue. Therefore we suggest that Congress pass the sort of policy that experts believe is the most effective solution, without any bells and whistles that address other partisan concerns.
2. It’s clear that experts view a carbon tax as the most efficient solution.
3. This tax should be completely revenue neutral, and should not be viewed as a back door way to advance other agendas, such as bigger government and more spending.
4. Therefore the carbon tax should be offset by reductions in our most distortionary taxes, especially those that bias us toward consumption. A revenue neutral carbon tax focuses like a laser on the environmental problem, and doesn’t get bogged down in left-right disputes over the proper size of government.
I’ve suggested that this is a win-win for the GOP. First, it’s possible (indeed likely) that the concerns over global warming are valid. In that case a revenue neutral carbon tax is clearly beneficial. And second, even if scientists are wrong about global warming, our current tax system is so grotesquely inefficient that it would be easy to find taxes far more distortionary than the carbon tax, which could then be reduced to offset its impact. Thus it’s probably a sound public policy, even if global warming is not a problem at all.
But for GOP climate skeptics it gets even better. I’ve argued that the Democrats might well reject this proposal, as they actually care more about taxes than global warming, even though they pay lip service to Al Gore’s claim that global warming is the great challenge of the 21st century. They would reject the GOP proposal, and this would expose their hypocrisy. Then the GOP could gain the moral high ground, by constantly reminding voters that they favored the policy that was advocated by global warming experts and the Democrats shot it down because they cared more about imposing ever-higher taxes on the public than they did about actually solving global warming. So it’s a pure win for the GOP, with no downside at all. The tax never even gets implemented. Well-educated suburban women move back to the GOP.
Do I have any evidence for this outrageous charge? Are the Democrats really that cynical? I’m not certain, but consider the following:
ASK an economist how best to reduce pollution, and the chances are that they will recommend taxing carbon emissions. And with good reason: doing so should encourage markets to find the least costly way to reduce pollution, something governments will struggle to discover themselves. In November Washington state’s voters will decide whether their state should mimic neighbouring British Columbia’s carbon tax, after a grass-roots campaign put the proposal on the ballot. It would be the first such policy in America. You might think environmentalists would unite behind such a pathbreaking effort. Instead, many oppose it.
Initiative 732, as it is known, would tax carbon emissions at a rate reaching $25-a-ton in 2018 and then rising by 3.5% plus inflation every year, to a maximum of $100 in 2016 dollars. Today’s levy in British Columbia is C$30 ($23) a ton. As in the Canadian province, the proceeds would be recycled into tax cuts elsewhere. The sales tax would fall from 6.5% to 5.5%. Low-income workers would get a tax rebate. And, to help placate affected businesses, manufacturing taxes would fall.
Yoram Bauman, who heads the Yes campaign (and who somehow makes his living by performing economics-themed stand-up comedy) proudly notes that three Republican state legislators support the initiative, and that it has not attracted the well-funded opposition from the oil lobby that a revenue-raising proposal might. Unfortunately, the price of that has been to alienate left-wing environmentalists, who are loth to give up the opportunity to use a carbon tax to fund new spending.
So it appears that I was right all along. At least if you assume that the left wing environmentalists reflect the views of the Democratic Party. Do they? I’m not sure, but Hillary Clinton opposes a carbon tax. (As does Trump.)