The baking of planet Earth is proceeding without interruption. Last year was the hottest year on record, according to NASA and the National Oceanic and Atmospheric Administration — edging out 2015, which had taken the crown from 2014. Of the world’s 17 warmest documented years, 16 have come in this century.
The obvious explanation is well-known: a steady buildup of heat-trapping gases in the atmosphere, produced by fossil fuels. Skeptics dispute how rapidly world temperatures will rise and how damaging the effects will be, but complete certainty isn’t needed to formulate prudent policy. There’s only a small chance your home will burn down, but it still makes sense to buy fire insurance.
The conflict over climate policy is driven partly by the fear, particularly among Republicans, that curbing greenhouse emissions requires costly, intrusive regulations. Those could hobble economic growth, destroy jobs, inflate electricity rates and deprive Americans of SUVs and other modern conveniences.
But Americans don’t have to choose between a free, thriving economy and a healthy planet. A new plan comes from the Climate Leadership Council, which includes George Shultz and James Baker, who respectively served as secretary of state under Ronald Reagan and George H.W. Bush, as well as Martin Feldstein and N. Gregory Mankiw, who headed the president’s Council of Economic Advisers under Reagan and George W. Bush. It’s an ingenious effort to satisfy Democrats and Republicans, free-market stalwarts as well as devoted environmentalists.
The centerpiece is a tax on carbon dioxide emissions that would start low and rise over time. At $40 a ton, the initial rate, it would raise gasoline prices by about 36 cents a gallon — a modest increase, but big enough to affect business and consumer decisions.
Making fossil fuels more expensive would stimulate conservation, speed the shift of power plants from coal to natural gas and make renewable fuels more price-competitive. The result would be a steady reduction in carbon emissions, which in turn would put a brake on global warming.
Here’s the real attraction for conservatives: This approach would remove the justification for a lot of federal micromanagement. “Much of the EPA’s regulatory authority over carbon dioxide emissions would be phased out, including an outright repeal of the Clean Power Plan,” says the council.
The need for federal aid to promote alternative energy would also vanish. No more federal loan guarantees, like the $535 million funneled to the solar equipment maker Solyndra, which eventually went bankrupt.
The council has a big sweetener for anyone unwilling to pay higher energy costs: rebating the revenue to taxpayers, which would mean that each year, a family of four would get a check for $2,000 from the federal government — an amount that would rise as the tax rate does. The idea is to keep the money from being grabbed by politicians to pay for existing or new federal outlays. It would also appease congressional Republicans who oppose any increase in tax burdens.
We share their concern, but a carbon tax could also be indispensable in closing the federal deficit, which is likely to swell in the coming decade. Unless Congress and the president can agree on real budgetary reforms, Washington shouldn’t be handing out money, even in the form of “carbon dividends.”
But the authors deserve a full hearing and a hearty thanks for trying to break the deadlock on the future of the planet. “Less government, less pollution,” is how they summarize the plan. As insurance policies go, this one looks like a bargain.