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‘A Conservative Climate Solution’: Republican Group Calls for Carbon Tax
From an Article by John Schwartz, New York Times, February 7, 2017
A group of Republican elder statesmen is calling for a tax on carbon emissions to fight climate change.
The group, led by former Secretary of State James A. Baker III, with former Secretary of State George P. Shultz and Henry M. Paulson Jr., a former secretary of the Treasury, says that taxing carbon pollution produced by burning fossil fuels is “a conservative climate solution” based on free-market principles.
Mr. Baker is scheduled to meet with White House officials, including Vice President Mike Pence, Jared Kushner, the senior adviser to the president, and Gary D. Cohn, director of the National Economic Council, as well as Ivanka Trump.
In an interview, Mr. Baker said that the plan followed classic conservative principles of free-market solutions and small government. He suggested that even former President Ronald Reagan would have blessed the plan: “I’m not at all sure the Gipper wouldn’t have been very happy with this.” He said he had no idea how the proposal would be received by the current White House or Congress.
A carbon tax, which depends on rising prices of fossil fuels to reduce consumption, is supported in general by many Democrats, including Al Gore. Major oil companies, including Exxon Mobil, have come out in favor of the concept as well.
The Baker proposal would substitute the carbon tax for the Obama administration’s Clean Power Plan, a complex set of rules to regulate emissions which President Trump has pledged to repeal and which is tied up in court challenges, as well as other climate regulations. At an initial price of $40 per ton of carbon dioxide produced, the tax would raise an estimated $200 billion to $300 billion a year, with the rate scheduled to rise over time.
The tax would be collected where the fossil fuels enter the economy, such as the mine, well or port; the money raised would be returned to consumers in what the group calls a “carbon dividend” amounting to an estimated $2,000 a year for the average family of four.
The plan would also incorporate what are known as “border adjustments” to increase the costs for products from other countries that do not have a similar system in place, an idea intended to address the problem of other “free-rider” nations gaining a price advantage over carbon-taxed domestic goods. The proposal would also insulate fossil fuel companies against possible lawsuits over the damage their products have caused to the environment.
Attacks on the plan can be expected from many quarters, even among supporters of a carbon tax in theory. Supporters of the Clean Power Plan are likely to oppose its repeal. Democrats also tend to oppose limitations on the right to sue like those envisioned in the Baker proposal. And the idea of a dividend will no doubt anger those in the environmental movement who would prefer to see the money raised by the tax used to promote renewable energy and other new technologies to reduce emissions.
Whatever the fate of the plan, it is a notable moment because it puts influential members of the Republican establishment on the record as favoring action on climate change — a position that is publicly held by few Republicans at the national level, though many quietly say they would like to throw off the orthodoxy in the party that opposes action.
“This represents the first time Republicans put forth a concrete, market-based climate solution,” said Ted Halstead, an author of the paper and social entrepreneur whose organization, the Climate Leadership Council, is posting the memo outlining the plan. Mr. Halstead, who also founded the New America research institute, said the political left and right had stalled on climate action in part because they disagreed about the means to fixing the problem, even though they might find common ground.
Some popular environmentalists take stands that those on the right can never embrace, Mr. Halstead said, citing the works of Naomi Klein, who attacks capitalism itself as the root of climate change. “That is so at odds with the conservative worldview, of course they’re going to walk away,” he said. “The only way for this solution to come about is if it gets a start on the right.”
The other co-authors of the memo include N. Gregory Mankiw and Martin Feldstein, former chairmen of the Council of Economic Advisers, and Rob Walton, the former chairman of Wal-Mart. (See yesterday’s FrackCheckWV.net).
A survey taken just after the 2016 election by the Yale Program on Climate Change Communication found that 66 percent of registered voters supported a carbon tax on fossil fuel companies, with the money used to reduce personal taxes. The party breakdown for that support was 81 percent of Democrats, 60 percent of independents and 49 percent of Republicans. Even among Trump voters, 48 percent support taxing fossil fuel companies, according to the Yale program.
Mr. Baker said it was time for the Republican Party to engage in the discussion of global warming beyond simple denial.
“It’s really important that we Republicans have a seat at the table when people start talking about climate change,” Mr. Baker said. He said that, like many Republicans, he was skeptical that human activity was the main cause of warming, but that the stakes were too high for inaction. “I don’t accept the idea that it’s all man made,” he said, “but I do accept that the risks are sufficiently great that we need to have an insurance policy.”
As for the likelihood of success of his plan, “I have no idea what the prospects are.”
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See also: Citizens’ Climate Lobby for detailed descriptions.
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A Rare Republican Call to Climate Action
By THE EDITORIAL BOARD, New York Times, February 13, 2017
The most important thing about a carbon tax plan proposed last week may be the people behind it: prominent Republicans like James Baker III, George Shultz and Henry Paulson Jr. Their endorsement of the idea, variations of which have been suggested before, may be a breakthrough for a party that has closed its eyes to the perils of man-made climate change and done everything in its power to thwart efforts to reduce greenhouse gas emissions.
This gang of Republican elder statesmen — they call themselves the Climate Leadership Council — is not made up of the usual environmentalists, which is why their proposal might gain traction, though probably not right away.
Their proposal would tax carbon emissions at $40 a ton to start and would be paid by oil refineries and other fossil fuel companies that would pass costs on to consumers with higher gas and electricity prices. The money raised would be returned to Americans through dividend checks; a family of four would get about $2,000 a year to start. This would help people adjust to higher energy prices and give them an incentive to reduce consumption or switch to renewable sources of energy. Most lower-income and middle-class families would get back more than they pay in taxes. To avoid placing American industry at a disadvantage, imports from countries that do not impose a comparable tax would be subject to a per-ton tax on the carbon emitted in the production of their products, while exports to those nations would not be.
Scientists and economists have long argued that putting a price on carbon would encourage conservation and investment in renewable energy. Ireland, Sweden and British Columbia already have carbon taxes. The European Union, Quebec, California and Northeastern states like New York and Massachusetts have adopted cap-and-trade systems that use emission permits to lower emissions over time.
The last serious effort to impose a national price on carbon came in 2009 with cap-and-trade legislation by Edward Markey and Henry Waxman, both then Democratic House members. The bill passed the House, but never received a vote in the Senate. Since then, Republican control of one or both houses of Congress has thwarted ambitious climate legislation. As a result, President Obama turned to administrative actions to reduce emissions, including the Clean Power Plan and higher fuel-economy standards for cars and trucks. Those regulations and standards are now on the chopping block under the Trump administration.
The new Climate Leadership Council argues that conservatives should support a carbon tax because it is a more market-friendly approach than Mr. Obama’s regulations. And after a carbon tax is put in place, the council says, the government should eliminate most of those rules, since they won’t be needed. But there are legitimate fears that the tax alone might not achieve emission reductions on the scale needed to save the planet from out-of-control warming, and that regulations and other policies like public investments in renewable energy will be needed, too.
Neither President Trump nor Republicans in Congress have embraced the proposal. Many conservatives believe they’ll be able to dismantle Mr. Obama’s regulations through administrative, legal or legislative maneuvers, without compromising. Plus, many are philosophically opposed to, and politically fearful of, any new taxes.
Their dismissal of the council’s proposal is myopic and puts their party out of step with the country. A large majority of Americans want the government to address climate change — 78 percent of registered voters support taxing emissions, regulating them or doing both, according to a Yale survey conducted after the election. The Republican elders are offering their party an opening to change the conversation. It should take the cue.
Source: https://www.nytimes.com/2017/02/13/opinion/a-rare-republican-call-to-climate-action.html?action=click&contentCollection=U.S.&module=Trending&version=Full®ion=Marginalia&pgtype=article
How European Union Can Limit Coal’s Life for the Cost of a Pint of Beer
Mathew Carr, Tino Andresen and Brian Parkin, Bloomberg News, February 19, 2017
• Ensuring that losers are compensated is seen making politics easier
• Volume of RWE’s German lignite power output seen plunging 58 percent
Driving most of Europe’s dirtiest power plants into retirement is probably cheaper than you think.
Companies from German utility EON SE to Sweden’s Vattenfall AB are calling for measures including a minimum price on pollution rights to kickstart the European Union’s sputtering carbon market. Such a levy would effectively force all but the most efficient coal plants to close.
“Installing a carbon floor price would be the most cost-efficient solution” to avoiding the worst of climate change, said Johannes Teyssen, chief executive officer of EON, which last year spun off its fossil-fuel plants. “A well and efficiently functioning emissions-trading system could, in fact, restore Europe’s reputation as a leader on climate policy,” he said by e-mail.
EU efforts to reform its $48 billion cap-and-trade system have repeatedly failed to boost the cost of polluting and encourage green investment. While Britain operates a national floor price and France has proposed a regional levy, opposition remains intense.
Coal-dependent nations, including Poland, argue that the higher costs will hurt their economies and EU Climate and Energy Commissioner Miguel Arias Canete has said such a move could damage manufacturing in the region.
A price floor of 30 euros ($32) per ton of carbon dioxide, or six times the current permit rate, would only cost each European citizen about 5 euros a year through 2025, according to the Institute of Energy Economics, or EWI, in Cologne, Germany. That’s the same as a beer in the Wild Geese pub down the street from the European Commission’s headquarters in Brussels.
While the regulator of the 12-year-old market remains committed to no price floors or ceilings, such intervention is gaining traction outside Europe. Canada plans to install minimum carbon prices beginning in 2018 to discourage fossil fuels and raise revenue. And on Feb. 8, a group of U.S. Republicans and business leaders including former Treasury Secretary Hank Paulson pressed the case for a carbon tax to top White House aides.
Photo: Glasses of Little Creatures beer in the canteen of the company’s craft brewery, operated by Kirin Holdings
Source: https://www.bloomberg.com/news/articles/2017-02-20/how-eu-can-limit-coal-s-life-for-the-cost-of-a-pint-of-beer
Read More: https://www.bloomberg.com/quicktake/carbon-markets-2-0