As Obama Visits Alaska, New Group Pitches Carbon Fee

WASHINGTON, D.C. -- As President Obama travels through Alaska and draws attention to the startling impacts of climate change in that state, a new nonprofit group said that putting a price on carbon would be the quickest, most efficient, and most politically palatable way to counter climate change.

“By adopting a carbon fee, we can take a step beyond the Clean Power Plan. The free market will help us combat climate change much more effectively than federal regulation can,” said George T. Frampton, a founder of a new nonprofit, the Partnership for Responsible Growth.

“It’s working in a number of countries, and a trial just over the border in British Columbia is turning skeptics into believers,” Frampton noted. Put in place in 2008, the province’s fee has reduced fossil fuel consumption by 16 percent, while use in the rest of that country has risen by 3 percent. Meantime, B.C.’s GDP growth has outperformed Canada’s.

“The president’s proposed Clean Power Plan is ambitious,” said Frampton, who headed the White House Council on Environmental Quality under President Clinton. “But even if it eventually is implemented, it will not cut greenhouse gases enough to prevent major climate change impacts. The United States can lead the world on this issue by using a free market approach that is coupled with a border adjustment. Our economic strength can encourage the international community to follow our example.”

Bills that would put a price on carbon have been introduced recently by Senators Brian Schatz (D-HI) and Sheldon Whitehouse (D-RI), Congressman John Delaney (D-MD), and others. Their provisions vary.

A carbon fee would generate billions of dollars a year in revenue, and its advocates have suggested a number of ways to use the money. The nonprofit urges that half of the revenue be used to bring the corporate tax rate from 35 percent (the highest in the industrialized world) to 28 percent—or to 25 percent if possible. In recent years Japan, Canada, and the United Kingdom have reduced their top rate to increase their competitiveness. “We shouldn’t tie one hand behind our back. Reducing our corporate tax rate would produce a surge of economic growth,” explained Bill Eacho, another Partnership founder.

The Partnership for Responsible Growth proposes that the other half of the revenue be returned to middle- and low-income households, perhaps in the form of tax cuts. “Assuming that the fee is applied when the carbon enters the economy, it will be passed along and eventually be paid by the end user,” “So a reimbursement will prevent those of lesser means from bearing the burden,” Eacho said.

“This plan can win enough support to pass Congress,” said Walt Minnick, a former Democratic Congressman from Idaho and the third of the Partnership’s founders. “We have spent this year talking with 175 members of Congress and their aides, and we can see a potential path to passage.” He said the best opportunity would be in the first half of 2017, after the election.

Alaska is the third leg of a week-long trip calling for strong action to tackle climate change. Obama began in Las Vegas and then traveled to New Orleans and the Mississippi coast, which were devastated by Hurricane Katrina ten years ago.