By Walt Minnick
“Too little, too late!” That’s what the world’s leading scientists say about the upcoming global climate conference in Paris.
Even if President Obama’s Clean Power Plan is not repealed by Congress or upended by the courts, the United States will fall far short of the greenhouse gas reductions the president intends to pledge as our contribution. More discouraging, even if no nation falls short or cheats on its pledge, the sum of the pledges all countries intend to make at Paris totals only 42 percent of the emissions reductions required to keep average global temperatures below the two degree increase most scientists say is necessary to prevent catastrophic damage.
Washington and Idaho’s dryland farming and forest products industries, together with its steelhead and salmon fisheries, are particularly at risk in a hotter, drier world. How many more record low snowpacks, fire seasons lingering into October, and steelhead dying in overheated Lower Snake River reservoirs are required to prompt our politicians to act?
The cheapest and fastest solution, one that would be more efficient than a regulatory approach, would be a revenue-neutral fee on carbon emissions. In our free-market economy, if carbon-intensive products cost more, industry will innovate and we will all become more energy-efficient. It’s just common sense. And all the emissions fees collected could be used to lower taxes.
A carbon fee works. British Columbia has had one since 2008. It has reduced fossil fuel consumption by 16 percent, while use in the rest of that country has risen by 3 percent. Meantime, British Columbia’s gross domestic product growth has outperformed Canada’s.
To find out if a revenue-neutral carbon fee could pass, the nonprofit I helped establish, the Partnership for Responsible Growth, met this year with 175 congressional offices. These conversations indicate strong bipartisan receptiveness to this idea, provided businesses and local opinion leaders speak out in support of this free-market solution.
The fee could start at $30 per ton, perhaps doubling over 10 years. It should be levied at the mine mouth or oil and gas collection point — 2,500 locations where carbon fuels are already measured for other purposes. $30 per ton equates to about 28 cent per gallon of gasoline. To offset these slightly higher energy costs, half the proceeds should be refunded to lower-income consumers. The rest used to lower corporate income taxes from 35 percent (the highest in the industrialized world) to 25 percent.
The legislation would deem the fee to be the way to comply with the president’s new Clean Power Plan rule for six or seven years, then pre-empting it permanently once the carbon fee demonstrates it has reduced emissions faster than the rule would have.
This free-market approach gets the U.S. Environmental Protection Agency out of the business of regulating greenhouse gases, creates jobs and allows energy generators and businesses the certainty needed to make sound usiness expansion decisions.
Since climate change is global, the solution must be, as well. The law should establish a World Trade Organization-compliant border tax adjustment on energy-intensive imports to make it in the self-interest of our trading partners to impose a like fee rather than have their exporters pay it to us at our border. Exporters to countries not charging for carbon pollution would receive a credit. By so leveraging our position as the world’s largest market, we might not even need a Paris conference to incentivize the emissions reductions required to avert future catastrophe!
A new survey by three Republican pollsters found that even conservative voters are increasingly eager to solve and “depoliticize” the climate change threat. Enacting a bi-partisan carbon-funded tax cut bill would do just that. Washington’s and Idaho’s representatives and senators from both parties should band together to lead the charge.
Our grandchildren will be thankful!
Walt Minnick, a former Idaho Congressman, is a co-founder of the nonprofit Partnership for Responsible Growth.