By Editorial Board
A GROUP of prominent Republicans brought a refreshing message to Washington on Wednesday: Climate change is a threat that deserves serious attention, and the GOP should embrace smart ways of dealing with it. What sorts of ways? The group — which calls itself the Climate Leadership Council and includes two former secretaries of state, James A. Baker III and George P. Shultz; two former chairmen of the Council of Economic Advisers, Martin S. Feldstein and N. Gregory Mankiw; and former treasury secretary Henry M. Paulson Jr. — has a carbon emissions-reduction plan ready to go. And it is excellent.
Instead of indulging in the fiction that carbon emissions will take care of themselves with minimal government intervention, these veteran Republican hands endorsed what economists insist is the best approach to dealing with the sprawling carbon emissions issue: a carbon tax. Put a price on the pollution, and businesses and consumers will change their behavior in thousands of ways that government regulators would not have predicted and could not have compelled. This process, driven by energy consumers, produces the largest carbon cuts for the buck. Its basic structure is also simple enough for most people to understand, and, since Congress would be writing it into the law, it could not easily change from president to president, as current regulations can.
The council’s plan would initially peg the tax at $40 per ton of carbon dioxide emissions — which, the group’s experts say, equates to about 36 cents per gallon of gasoline — and set it to rise at a steady rate year after year. How could this possibly be a political winner, particularly for Republicans who spent years accusing President Barack Obama of attempting to raise energy prices? The group proposes that the tax replace the climate rules the Environmental Protection Agency established under Mr. Obama, which Republicans hate. The plan would also rebate the money the tax raised back to every American.
The total picture, then, is a policy that would defuse the climate issue for Republicans, without growing government revenue, while rolling back energy regulations and sending Americans a regular check in the mail. The council reckons that those checks would make the vast majority of Americans, and particularly those with lower incomes, whole or better, after subtracting out what they paid in carbon taxes.
Still, it will be a political long shot. Energy interests — particularly the dirtiest of them all, coal — will fight hard against this sort of plan. As usual, they will push for dangerous inaction instead. Some environmentalists, meanwhile, have already objected to the fact that the plan would rescind the EPA’s authority to address climate change via regulation, even though doing so is a crucial prerequisite for GOP movement. Environmentalists worry that merely setting a tax rate, without directly capping carbon emissions, would not guarantee that emissions would drop to desired levels. That is a fair concern, but there are smart ways of dealing with it: Congress could set the tax to adjust automatically if carbon emissions do not hit targets, for example.
These dyed-in-the-wool Republicans have proposed an elegant climate policy that addresses an issue of widespread concern and poses no threat to conservative ideology. The rest of their party should listen.