Republicans Say They Want Free-Market Innovation. Then They Should Want a Carbon Tax.

November 27, 2018

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by Catherine Rampell (Washington Post) ... Alternatively, some Republicans suggest that, yes, the planet may be warming and, yes, humans may be the reason, but it’s too darn expensive to do much more than we are.

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As Sen. Joni Ernst (R-Iowa) equivocated on CNN’s “State of the Union,” after plugging her state’s use of wind energy, “Any time that we are putting regulation out, we need to always consider impact to American industry and jobs.”

Yet the “impact to American industry and jobs” will also be enormous if lawmakers take no action: The climate assessment report forecasts annual U.S. economic costs in the hundreds of billions of dollars by the century’s end.

Which brings me to Republicans’ final, most confused excuse yet for ducking the most critical policy challenge of our time: The private sector will fix the problem for us, if only we leave markets alone to innovate.

“I think it’s clear that [the climate is] changing and it’s clear that humans are a contributing factor,” Sen. Ben Sasse (R-Neb.) said on “Fox News Sunday.” “I think the real question, though, becomes what do you do about it? Because you can’t legislate or regulate your way into the past. We have to innovate our way into the future.”

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On NBC’s “Meet the Press,” Sen. Mike Lee (R-Utah) also acknowledged that “the burning of fossil fuels” isn’t the “healthiest for Planet Earth.” Asked if he supported a carbon tax, though, he said no. The reason: “If we’re going to move away from fossil fuels, it’s got to be done through innovation. And innovation can be choked out through excessive government regulation.”

Here’s the thing. Taxing carbon is exactly how you get faster innovation. That’s kinda the point.

A carbon tax prices in, upfront, the hidden costs of burning fossil fuels, including pollution and the warming of the planet. In the near-term, a carbon tax disincentivizes the purchase of carbon-intensive products, of course. But over the longer-term, it also increases demand for — and thereby incentivizes the development of — cleaner, less-carbon-intensive technologies. If you want to accelerate innovation in batteries, electric cars, solar, wind, etc., a carbon tax is a no-brainer.

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Additionally, if Republicans truly want to walk the walk on reducing “excessive government regulation,” there’s plenty for them to do. There are tons of regulations and subsidies that encourage use of fossil fuels — and slow down innovation in greener technologies.

There are, for instance, the enormous tax breaks and other subsidies for oil and coal. Or Trump’s proposed bailouts for failing coal plants. Or his tariffs on solar panels.

Policymakers could also take action to crush the NIMBYism that impedes offshore wind farms. Or they could discourage or even preempt lots of other stupid state and local rules and regulations. These include building codes that inhibit solar, or the unstandardized, jurisdiction-by-jurisdiction permitting process that makes installation more difficult.

All of which is to say that prioritizing innovation and the cutting of red tape are not actually an excuse for inaction on climate change. In fact, they’re key to the solution. READ MORE

'MORE LIKE AN ECONOMIC FORECAST, NOT SCIENCE' (Politico's Morning Energy)

Our climate reality will catch up to us, no matter how hard Trump tries to bury the evidence (Washington Post)

Climate Change an Economic Risk: Regions Vary, But Major Crops Poised to Suffer Under Higher Pollution Scenarios (DTN The Progressive Farmer)

Carbon Tax for Non-Renewable Fuels (Advanced Biofuels USA)

Stakeholders Again Call On Congress to Approve Long-Term Transportation Funding (Transportation Topics)

CANTWELL SEES CLIMATE EVOLUTION: (Politico's Morning Energy)

Poll: Nearly two-thirds of Republicans now acknowledge climate change (The Hill)

The Republican Solution to Climate Change Should Be Clean Energy (Morning Consult)

More articles on carbon tax and gas tax

Excerpt from Politico's Morning Energy: Asked what the government should do in response to climate change, (Senate's No. 2 Republican, John) Cornyn urged greater investment into research into new technologies. "I'm not for a carbon tax. I think we ought to be doing more research — things like, for example, fracking and direct horizontal drilling have helped reduce our dependency on coal," he said. "Things like that are better than more government bureaucracy, taxes." READ MORE

Excerpts from Transportation Topics: James Corless, executive director of the Sacramento Area Council of Governments, noted limitations with the current infrastructure funding structures: “We’re going to have to come up with a successor to the gas tax sooner or later.”

Corless suggested, for example, the adoption of a customized vehicle-miles-traveled fee as a possible alternative to the federal fuel tax. A few states, such as Oregon, are testing the alternative-funding method.

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Carper (Sen. Tom Carper (D-Del.), the committee’s ranking member), who is one of the few members of Congress to suggest raising the Clinton-era 24.4-cents-per-gallon diesel tax and the 18.4-cents-per-gallon gas tax, expressed optimism that next year’s Democrat-led House and Republican-led Senate would achieve a long-term infrastructure bill.

The incoming chairman of the House Transportation and Infrastructure Committee, Rep. Peter DeFazio (D-Ore.), said he shares Carper’s sentiment. Trump, and the leaders of the House and Senate, likely Speaker Nancy Pelosi (D-Calif.) and Majority Leader Mitch McConnell (R-Ky.), respectively, agreed infrastructure funding was policy capable of garnering bipartisan support when the next Congress convenes in January.

Under Republican control, congressional leaders opted against a 10-year, $1.5 trillion infrastructure funding proposal the White House unveiled in February. The plan’s significant reliance on private-sector backing, which would have paved the way for additional tolling nationwide, was a deal breaker for most Democrats and key Republicans from rural states.

High traffic volume, which is mostly absent from rural highways, is a requisite for tolling firms. In the meantime, the current highway authorization law expires in 2020, presenting policymakers with a deadline to avoid disrupting federal infrastructure funds. READ MORE

Excerpt from Politico's Morning Energy: Cantwell told reporters Thursday she's seeing signs of change among her Republican colleagues in how they view climate change. "It's starting to seep in people's minds that this is a cost factor for the federal government," she said. "They know that because they're seeing it on fire, they're seeing it on drought, they're seeing it on disasters. The question is whether they're going to own up to the fact that they could do better things for the future." READ MORE

Excerpt from Morning Consult: The problem is the Republican narrative is clouded by obstruction. What began as efforts to stop President Barack Obama’s climate “legacy” have divulged into plans to prop-up fossil fuels at any cost — including a proposal to bailout uneconomic power plants at a price of up to $17.2 billion per year. Such ideas are anything but conservative. With 2020 on the horizon, Republicans need to realize the party response to climate change is failing and leaving political capital on the table for Democrats to take.

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This industry provides an opportunity for Republicans to shape the climate change solution narrative as one that requires competitive markets, less regulation, lower costs and more consumer choice to improve quality of life for all.

Clean energy is competitive. Recent analysis shows major clean energy sources such as wind and solar are competitive with, if not outright cheaper than, conventional resources like coal and nuclear. READ MORE