Fires & Storms: Running Up a Big Bill

It’s been quite a year. Consider this lineup: Franklin, Gert, Harvey, Irma, Jose, Katia, Lee, Maria, Nate, and Ophelia. Thanks to those hurricanes, 2017 has become the first year in more than a century in which 10 Atlantic storms in a row reached hurricane strength.

The record for the most weather-related disasters doing more than $1 billion in damage is 15, set last year. So far, 2017 has had 12, most recently the California wildfires. As of late October, the toll for those fires, some of which were still burning, was: 42 people dead, 8,400 homes destroyed, and 271,000 acres burned.

Hurricane Katrina still reigns as the U.S. weather-related disaster with the highest price tag: $160 billion. Hurricane Harvey ranks second ($86 to $108 billion), followed by Hurricane Irma ($64 to $92 billion), according to the National Climatic Data Center.

Despite all those eye-opening figures, many politicians continue to insist that taking steps to counter climate change would threaten our economic health. A more plausible view is that failure to take action will devastate our economy and impoverish our children.

Business Community is Key to Carbon Fee

If enough of the business community speaks up in favor of a carbon fee, it will become the law of the land. That’s the number-one message we heard during two years of meetings with some 300 senators, House members, and congressional aides. Most of them were open to this solution to climate change, but they need to see evidence that business leaders “back home” are on the same page.

Can we mobilize those leaders? The latest encouraging sign came last week from Business Forward, a group of small business owners, executives, entrepreneurs, and investors from across the United States. This trade association held a series of briefings with CEOs and economists from across the ideological spectrum to examine specific tax proposals and their potential impact on business. The conclusion: Many business leaders agree that pricing carbon is a simple, fair, and market-based solution. It decreases the need for federal regulation and can reduce emissions more quickly and equitably.

Lindsey Graham Backs Carbon Fee

The drive to enact a carbon royalty (or fee) received an important boost last week. South Carolina Senator Lindsey Graham became the first Republican in the Senate to publicly endorse a "price on carbon” to fight climate change.

"I'm a Republican. I believe that the greenhouse effect is real, that CO2 emissions generated by man is creating our greenhouse gas effect that traps heat, and the planet is warming," said Graham. "A price on carbon—that's the way to go in my view."

He said that he is working with Senator Sheldon Whitehouse (D, RI) on legislation. Whitehouse and Senator Brian Schatz (D-HI) introduced a carbon tax bill in July, appearing at the American Enterprise Institute (AEI) to announce it. Graham, who said he would take the idea to the White House for consideration, called for climate change legislation during the 2016 election but did not mention a price on carbon explicitly.

From our meetings with scores of senators and their aides over the past three years, we know that a number of them privately support this free-market idea or are at least open to it. We will try to persuade them to join Graham in speaking out publicly.

Reasons to Be Upbeat

Harvey, congressional gridlock, the U.S. withdrawal from the Paris accord, climate change deniers in high places…. These are just some of the things that can discourage someone who believes we need to take action on climate change.

But there are also reasons to be upbeat:

  • While Congress has a disproportionate number of members who are content to sit on their hands as the climate changes at an alarming pace, the House Climate Solutions Caucus has grown to include 52 members--half of them Republicans.

  • After a bipartisan vote in July left climate language in the annual defense authorization bill, Climate Solutions Caucus Co-Chairman Carlos Curbelo voiced optimism that lawmakers may actually begin to engage earnestly on the subject. "We have a lot of Republicans, even from the deep South, who everyday come to me and say, 'Well, let's talk about this climate change thing and sea level rise,'" Curbelo told a Florida radio station. "There is growing interest, and my hope is that we can build that coalition, that bipartisan coalition, as quickly as possible just so that we can advance common-sense policy solutions."

The Best Way to Pay for Tax Reform

Most in the GOP see tax reform as the next act. It has been a priority even longer than repeal of Obamacare. House leaders definitely have their eyes on this prize: House Speaker Ryan recently told the Wisconsin State Journal that he plans to introduce a tax overhaul bill in September with the goal of moving it through the House by the end of the year. According to Politico, Senate Finance Committee Chairman Orrin Hatch said, “We’re not going back to health care. We’re in tax now. As far as I’m concerned, they shot their wad on health care and that’s the way it is. I’m sick of it.” For its part, the White House wants a bill on the president’s desk by December.


Here’s a central question: Will the bill run up the national debt even higher? That would be irresponsible. Publicly held national debt already exceeds $14 trillion. Without any tax cuts or new spending, it is headed for $25 trillion in 10 years. That would produce the highest debt-to-GDP ratio in modern times--crippling our ability to fund a strong national defense, pay for basic services, and care for an aging population.