Bloomberg View: A (Not So) Crazy Idea to Sell Republicans a Carbon Tax

By Christopher Flavelle

If you were to select the most hopeless cause in Washington, getting Republican lawmakers to support a carbon tax would have to make the shortlist. The idea combines much of what conservatives hate most: a new tax, less coal, a more intrusive government and an acknowledgment that scientists -- worse, scientists at the United Nations! -- might be right about something.    

So when two Democrats and carbon-tax enthusiasts described their plan to win over Republicans to me last month, their confidence initially seemed to fall somewhere between optimistic and delusional. But here's what makes their idea plausible: It doesn't require changing anyone's mind about the science.

The pair, an ex-ambassador named William C. Eacho and former Idaho Congressman Walt Minnick, offer an unusual angle. Instead of evangelizing about potential benefits to the global common weal, they're appealing to naked financial self-interest. Eacho and Minnick want businesses to pressure their members of Congress to support a carbon tax. And they plan to recruit those businesses by offering them much of the proceeds from that tax.

Eacho and Minnick are pushing their idea through a nonprofit organization called the Partnership for Responsible Growth. (George T. Frampton, the third founder, who worked in Bill Clinton's administration, wasn't at the interview.)

The group wants to impose a $30 tax on each ton of carbon emitted and use the revenue to cut the top corporate income tax rate to 25 percent from 35 percent. Eacho and Minnick said there would still be money left over to offset the burden on low- and middle-income households. Sweetening the deal for Republicans, the group proposes to kill Environmental Protection Agency regulations, hated by the party, to limit carbon emissions at power plants.

Republicans "want corporate tax reform, and they need a revenue source," Minnick said. And, Eacho added, "They like the idea of reining in the EPA."

This is not an entirely new proposal. Democratic Senators Sheldon Whitehouse and Brian Schatz introduced a bill in June proposing a carbon tax, with part of the revenue going toward cutting the corporate tax rate. What's new is that somebody is doing the legwork of pitching and organizing business leaders to lobby their congressmen.

The response from Congress, according to Minnick and Eacho, has been more positive than one might expect. They said the nonprofit has already starting meeting with lawmakers who claim to be willing to listen if the business leaders show up. Minnick and Eacho added that half a dozen companies have already signed on to the idea. There's plenty of time: Congress is unlikely to take this up until after the presidential election.

The best-case scenario for the group's strategy probably unfolds this way: A new president takes office in January 2017 and proposes to break a longstanding stalemate on corporate tax reform using a carbon tax to pay for a rate cut. Republicans in Congress, who have railed against the EPA rules and been lobbied by businesses in their districts to cut their taxes, give the idea enough support for it to pass.

What are the odds this will work? The impulse toward skepticism is overwhelming, despite more than half of Republican voters agreeing that humans are contributing to climate change. However muchRepublican economists like the carbon tax -- which is, after all, an embodiment of free-market principles, because it lets individuals respond to prices -- Republican politicians may have lashed themselves too tightly to the mast of their opposition for anyone, even businesses, to untie them.

And yet: Questioning the science of climate change as an excuse not to act, and doing so without looking foolish, won't be tenable forever. Republicans will eventually need something new to say. If Eacho, Minnick and Frampton can offer conservatives an alternative path to obstructionism and an excuse for taking it, they may have found a way of tackling climate change that doesn't revolve around those dreaded scientists.

This article originally appeared in Bloomberg View on October 5, 2015.