Of course it is not so simple. Carbon dioxide is not the only gas that causes global warming. Redistributing the revenue to Americans prevents the government from spending it on renewable-energy research. People may save their government checks instead of spending them. But a carbon tax-and-dividend scheme really could be an elegant, market-friendly way to begin to address climate change in American policymaking.
This week, members of the Republican old guard—including two architects of the Reagan administration—proposed that the United States should adopt a carbon tax. They did so in a blitz of elite publicity: a story in The New York Times, dueling op-eds in the Times and the Wall Street Journal, and a press conference at the National Press Club. On Wednesday, they will meet with senior economic officials at the White House.
Their proposal is called “The Conservative Case for Carbon Dividends.” Mitt Romney has already tweeted it approvingly.
“For too long, we Republicans and conservatives haven’t occupied a real place at the table during a debate on global climate change,” said James Baker III at the conference. Baker served as secretary of the treasury under President Reagan and secretary of state under President Bush.
“Instead, we have continued to dispute the fact of climate change,” he continued. “I was, and remain, somewhat of a skeptic to the extent that man is responsible for climate change. But I do think that the risks associated with it are too great to ignore, and that we need an insurance policy.”
Climate change is definitely happening, and it is definitely human-caused. The vast majority of climate scientists have recognized this for almost two decades. But the pitch of Baker’s appeal is interesting: He is opening a path for Republicans to support the policy without looking like hypocrites.
Indeed, most of the comments on Wednesday were aimed at Republicans. Baker and the rest of the panel seemed to hope that if they said the carbon tax was “conservative” or “a free-market solution” many, many times, then their fellow partisans would come to agree with them.
“This makes such good sense from a conservative, limited-government competitive approach,” said Baker.
“For the sake of our children and grandchildren, I believe it is imperative that we set forth a climate solution that embodies long-standing conservative principles,” said George Shultz, the secretary of state under President Reagan, in a statement read at the event.
“This is a fundamentally conservative plan—one that showcases the principles of free markets and limited government,” said Hank Paulson, the treasury secretary under President George W. Bush, in another statement.
Shultz’s comments even referenced the Montreal Protocol, the landmark treaty passed under Reagan that remedied the hole in the ozone layer. “Given the risks, [Reagan] advocated for an insurance policy. As it turned out, the scientists who were worried were right and Reagan’s Montreal Protocol came along just in time.”