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The Carbon Tax: A Conservative Idea? Considerable efforts to boost the concept have not succeeded

By Michael Bastasch and Steven J. Allen

Summary: Some argue that a carbon tax would be a less harmful alternative to ever-greater environmental regula- tion, but the idea has such strong draw- backs that few conservatives are willing to support it. Still, non-conservative donors continue to push the scheme among conservatives.

s the carbon tax genuinely popular with conservatives and Republicans? IFor over a year, reports have been cropping up in the media about the sup- posed growth of conservative and Repub- lican support for a carbon tax. A former After losing his GOP primary, largely due to the carbon tax, Rep. congressman, Bob Inglis (R-S.C.), seems Bob Inglis (R-S.C.) was comforted by Chris Matthews of MSNBC. to be devoting himself to the project. The Christian Coalition, often identified as well-organized, well-funded campaign ronmental Protection Agency (EPA) and part of the “religious right,” and some to overcome their resistance. other parts of the federal bureaucracy. economists at the American Enterprise This June, he announced regulatory Not as bad as the alternatives? Institute, a think tank associated with the restrictions aimed at the same goals as First, some background. In 2009, when Republican establishment, have spoken cap-and-trade. Most conservatives, Re- Barack Obama became President and kindly about the idea. publicans, and supporters of free-market liberal Democrats had overwhelming ideas strongly oppose such restrictions, Other carbon tax supporters with Repub- control of Congress, environmentalists but a small number of people who lican credentials include Douglas Holtz- were optimistic they would win their describe themselves as right-of-center Eakin, chief economic adviser to John long fight to impose strict federal con- support a related idea—a tax on carbon McCain’s 2008 campaign and now presi- trols on carbon dioxide (CO2). Their dioxide emissions or “carbon tax”—as dent of American Action Forum; Greg legislative proposal was called cap-and- an alternative to cap-and-trade or to the Mankiw, economic advisor to President trade, which the President had admit- President’s new ultra-regulatory plan. George W. Bush and to Mitt Romney; ted would shut down coal-fired power former Secretary of State George Shultz; generation and cause electricity prices to Nobel laureate economist Gary Becker; “necessarily skyrocket.” Cap-and-trade August 2013 and , the guru of supply-side would have put limits on total emissions The carbon tax: a conservative idea? economics. of CO2 and set up markets for buying and selling emissions permits. It passed Page 1 While the vast majority of Republican, the House, but died in the Senate. R Street says: Yes, it is conservative, and free-market activists Page 7 believe a carbon tax would be disastrous Foiled by the democratic process, the for the country and disastrous at the ballot President decided to impose carbon Green Notes box, Inglis and others are conducting a dioxide restrictions by way of the Envi- Page 8 Thus, to conservatives and their allies, What is a carbon tax? promoting “conservatives4carbontaxes. the main selling point for a carbon tax A carbon tax would put a gradually rising com.” The slogan on the cards: “Join the is that it may be the least of many evils. fee on carbon dioxide emissions from Winning Team!” The website declares, Why target CO2? sources such as power plants and coal “Nobody likes taxes, but a sovereign and Why do environmentalists target car- mines, or on coal or gasoline or other judicious people will levy them wisely.” bon dioxide? CO2 is invisible, a “trace products that emit carbon dioxide when It highlights the view of a number of gas” that makes up roughly one 2,557th consumed. The specifics of the tax, such people with Republican backgrounds of the earth’s atmosphere—the rough as the stage at which the tax is levied, who support the tax, along with ma- equivalent of five tablespoons of water vary from one proposal to another. This jor corporations that have called for a in a 50-gallon tub. Humans and other would create incentives for lowering “stable price” for carbon. animals exhale it, and plants inhale it carbon dioxide emissions and would also The site is registered to Rachael Sotos, (and, at night, exhale it). CO2 is nec- make non-carbon-based energy sources an adjunct professor at Pace University. essary for the existence of life as we more attractive by comparison. Her Facebook page attacks “fox wing know it. It gives us soda pop, beer, and What’s wrong with a carbon tax? It has media,” links favorably to a story sug- leavened bread. But along with water been sold as a more efficient, transparent gesting that fracking causes earthquakes, (H2O), methane (CH4), nitrous oxide way to reduce carbon dioxide emissions and notes that she “likes” Media Matters (N2O), ozone (O3), and fluorinated gases than adding to the existing labyrinth of for America, the George Soros-funded (CFCs, HFCs, and SF6), it is classified environmental regulations. Proponents group that attacks the alleged right-wing as a GHG, a “greenhouse gas” that traps argue that some environmental regula- bias of the news media. heat in earth’s atmosphere. tions could even be repealed with a Environmentalists target carbon dioxide carbon tax, perhaps as part of a Grand But the campaign aimed at conservatives emissions for government restriction Bargain between environmentalists and goes far beyond cards distributed semi- because they believe it is responsible supporters of business. anonymously at a conservative confer- for Global Warming, “climate change,” ence. Taking the lead in the overall effort Carbon tax proponents claim that in- or “extreme weather”—they rename is former Rep. Inglis. His group, the creased revenues would be used to pay their theories based on stories in the Energy and Enterprise Initiative, based at down the federal budget deficit. (Their news—and in part because many people George Mason University in the suburbs analysis assumes that revenues would confuse carbon dioxide with other forms of Washington, D.C., is one of the groups increase—that is, that a carbon tax of carbon such as black carbon (soot) taking the lead in the so-called conserva- wouldn’t cause a reduction in revenues and carbon monoxide, which is used in tive push for a carbon tax. by suppressing economic growth.) Ac- suicides. (Conversely, they usually leave cording to Brookings Institution fellow water off their list of GHGs, even though This is his story: With a heavily Re- Adele Morris, a $16 per ton carbon it’s actually the most abundant GHG, in publican district, Bob Inglis could have tax that rises 4 percent annually would part because they want the list to sound stayed in Congress a long time. Instead, reduce the deficit by $815 billion over scary, and “water” doesn’t sound like a he took an anti-science position on the 20 years. dangerous chemical.) Global Warming issue, and that helped To bring conservatives and their allies cost him his seat. Editor: Steven J. Allen on board, proponents of the carbon tax Inglis, a lawyer, was first elected to Publisher: Terrence Scanlon say it would be enacted only as part of Congress in 1992, defeating Democrat Address: 1513 16th Street, NW a revenue-neutral “tax swap”—that the Liz Patterson in the Greenville/Spartan- Washington, DC 20036-1480 tax hike would be offset by cuts in cor- burg, South Carolina district that borders Phone: (202) 483-6900 porate or personal income taxes, payroll North Carolina. In 1994 and 1996, he E-mail: [email protected] taxes, or some other taxes, and that the was re-elected with more than 70% of the Website: CapitalResearch.org competitive advantage a tax would give vote. He gave up the seat in 1998 to run to, say, India or China would be offset against Sen. Ernest “Fritz” Hollings (D), Green Watch is published by Capital with tariffs. Research Center, a non-partisan education holding Hollings to 53%. Jim DeMint and research organization classified by the The conservative campaign got the House seat and held it until 2004, IRS as a 501(c)(3) public charity. Reprints Last February, at the Conservative Politi- when DeMint was elected to the Senate are available for $2.50 prepaid to Capital cal Action Conference (CPAC) in Wash- and Inglis took the House seat back with Research Center. ington, the nation’s premier gathering of some 85% of the primary vote. He was conservatives, someone distributed cards re-elected in 2006 and 2008.

Page 2 Green Watch August 2013 Along the way, Inglis took some posi- He attacked, as racists, people who include former Sen. Bob Bennett (R- tions that angered his constituents, such blame the housing crisis in part on the Utah)—who, like Inglis, lost his seat as opposing the Iraq “surge,” voting Community Reinvestment Act, which to a Tea Party challenger—and com- for the Big Bank Bailout of 2008, and forced banks to lend to people who mentator David Frum, who presents opposing drilling offshore and in the weren’t credit-worthy. He cited “bibli- himself as a voice of reason in contrast Alaskan wasteland. Most notably, he cal law” as the basis for his belief in a to the “crazy” . In became an advocate of the carbon tax. carbon tax. He said that “the most endur- a 2009 Newsweek article, Frum attacked His proposal was for a tax of $15 per ton, ing heresy was just saying that climate for being divorced and rising to $100 per ton by 2040. Inglis change was real. That was the one that overweight. was most damaging, I’m convinced.”* called it a “tax swap,” with the carbon The R Street Institute was formerly “DC tax offset by a corresponding cut in the Today, Inglis presents himself as a mar- Progress,” a group set up to promote payroll tax, but critics pointed out that tyr who paid a price for his principled free-market ideas locally in the notori- such an offset is politically impossible. positions on the issues. He serves as ously anti-business city of Washington, In 2009, the Tea Party movement executive director of the Enterprise and D.C. It took its present form when it was arose, giving working-class and small- Energy Initiative, which describes itself taken over by a splinter group, dealing business-class Americans a strong voice as “a campaign to unleash the power of largely with insurance-related issues, in the political process, and, as a result, free enterprise to deliver the fuels of the from the free-market-oriented Heartland Inglis faced four challengers in the 2010 future.” His group received funding Institute. primary. It’s rare for a Republican mem- from such organizations as the Rock- That group split away from Heartland— ber of Congress to lose a primary, espe- efeller Brothers Fund and the Energy an organization famous for its advocacy cially in the South, but prosecutor Trey Foundation (discussed below). of a science-based (or “skeptical”) ap- Gowdy defeated Inglis by an astonishing Inglis’ E&EI is based at George Mason proach to the Global Warming issue— 70%-29%. Inglis carried three of the 151 University’s Center for Climate Change after Heartland ran a controversial ad precincts in his home county. Communication, which promotes Global that associated Global Warming activ- Some lamented his loss. “Inglis was ex- Warming propaganda. (4C, as the Center ists with Unabomber Ted Kaczynski. ceptional for his bravery in standing up is known, receives taxpayer funding by (The ad, a billboard that was posted for what he believes is right for climate way of federal bureaucrats at NASA, the in Chicago for about a day, noted the change,” said David Hunter, a former Centers for Disease Control, the National similarity between Kaczynski’s views climate aide to Sen. Susan Collins (R- Science Foundation, and the National and those of leading environmentalists. Maine) and director of U.S. policy at Park Service, as well as money from left- It was considered by some to be in bad the International Emissions Trading of-center donors like the Robert Wood taste, and the controversy over the ad Association, which seeks to cash in on Johnson Foundation and the Rockefeller gave some Heartland donors such as Global Warming fears. Family Fund.) Insurance an excuse to cave in to environmentalist pressure to stop Inglis serves as a member of the board In a post-election interview with the funding the organization.) leftist magazine Mother Jones, Inglis ex- of directors of the R Street Institute, pressed contempt for his critics—specifi- which works to promote the carbon tax R Street is a member of the SmarterSafe. cally, for some former contributors who idea among conservatives and supporters org coalition, formerly Americans for failed to back him in 2010—ridiculing of free markets. Other board members Smart Natural Catastrophe Policy, which them as “ watchers. . . . They says it brings together “diverse chorus of say, ‘Bob, what don’t you get? Barack *Actually, whether “climate change” voices united in favor of environmentally Obama is a socialist, communist Marx- occurs is uncontroversial, given that the responsible, fiscally sound approaches to ist who wants to destroy the American Sahara used to be grassland and that boul- natural catastrophe policy that promote economy so he can take over as dictator. ders in New York City’s Central Park were public safety.” Other members include Health care is part of that. And he wants deposited by retreating glaciers. Earth’s environmental groups like American to open up the Mexican border and turn climate has always been in a state of Rivers, the National Wildlife Federa- [the U.S.] into a Muslim nation.’” change, so “climate change” is basically tion, the Sierra Club, the Environmental another term for “climate.” The debates Defense Fund, the Nature Conservancy, In the interview, Inglis attacked, as liars, on the issue are over the nature and cause and Defenders of Wildlife. critics of Obamacare who pointed out of so-called Global Warming and over that “death panels” are an inherent part the policies that should or should not be In June, Inglis teamed with Andrew of any such healthcare rationing scheme. pursued in connection with it. —SJA Moylan from the R Street Institute to

August 2013 Green Watch Page 3 debate James Taylor of Heartland and people favoring either individual liberty, skeptics of Global Warming theory, but David Kreutzer of the Heritage Foun- free-markets, or limited government largely abandoned that approach in 2006 dation on the question of whether con- might sanction.” Another AEI scholar, and now favors a carbon tax. Among the servatives should support a carbon tax. Mark Perry, has written: “The cost in possible reasons for ExxonMobil’s shift: [Moylan explains his support for the idea dollars, as well as in lost jobs, from a ►Its heavy investment in natural gas in an article on page 7.] At the debate, carbon-tax would be staggering. And the from fracking, which would gain a com- buttons were distributed cost would ultimately fall on American petitive advantage over carbon-heavy that teased carbon tax- consumers—without necessarily gen- resources like coal, ers. The buttons read erating any environmental benefits if ►The prospect that revenue from a car- “70/29”—the margin China, India, and other countries with bon tax would be used to reduce corpo- by which Inglis lost his fast-growing economies continue to rate income taxes, which hit ExxonMobil Congressional seat. pollute.” especially hard, Said Marlo Lewis of the Competitive Green and Perry oppose the tax, but oth- ►The desire for predictability, for set- Enterprise Institute: “The political ers at AEI appear to support it. In July tling the issue once and for all, along choice facing the American people is in 2012, it was reported that Kevin Hassett with the belief that passing a carbon tax no small part that between a Republican was holding closed-door meetings with would put the brakes on regulations that Party that is anti-tax and pro-energy and left-wing groups to develop a public rela- would be more onerous than a simple a Democratic Party that is anti-energy tions and legislative strategy on how to tax, and, and pro-tax. This clear product differen- push the carbon tax during a lame-duck ►The desire to deflect the opposition of tiation is an asset for the GOP. Repub- session of Congress. environmentalist organizations and like- licans are truly the Dumb Party if they minded governments, an approach that The closed-door meetings included Ty- squander their energy advantage instead critics liken to “feeding the crocodile so son Slocum, director of the energy pro- of pressing it to the hilt. Conservative he’ll eat you last.” advocacy of a carbon tax can only blur gram for Public Citizen, a group founded the battle lines, divide GOP leaders, and by supporters of Ralph Nader; Kevin Christians and young people demoralize the movement’s activist base. Curtis, program director of Al Gore’s The argument for a carbon tax has fallen Climate Reality Project and a member on deaf ears among most conservatives. “Inglis himself blames his defeat princi- of the board of directors of the Climate So carbon tax advocates have decided to pally on his advocacy of a carbon tax,” Action Network; and Alden Meyer of the mold the minds of younger generations, Lewis noted. “Inglis is an ideal spokes- leftist Union of Concerned Scientists. targeting college-age conservatives. man for the proposition that a carbon “I’ve spent a lot of time on college tax is a conservative idea whose time In November 2012, AEI held another campuses at College Republicans, Fed- has come. The messenger is a living carbon tax event co-hosted by the liberal eralist Societies at law schools, energy refutation of the message.” Brookings Institution, the International clubs at business schools, and they all Monetary Fund, and Resources for the Other conservative voices get it,” Inglis told the Daily Caller News Future. At the event, AEI’s Aparna Foundation. Some scholars at the American Enter- Mathur “explained the economic reason- prise Institute, one of the nation’s most ing behind a theoretical tax on carbon to Another pro-carbon tax group is Young prominent conservative think tanks, have correct for externalities of pollution,” Conservatives for Energy Reform. been instrumental in leading the intel- according to AEI’s website. (Mathur founded by Michele Combs, director of lectual push in support behind a carbon has stated that the event—“an academic communications at the Christian Coali- tax. In May 2011, the Institute held an meeting”—should not be taken as evi- tion, and Ben Smith, former co-chairman event discussing the feasibility and the dence that AEI supports a carbon tax, and of the Young Republican National Feder- pros and cons of a carbon tax. AEI’s own in fact, the Institute itself never endorses ation and now a student at Northwestern Kenneth Green and the Heritage Foun- specific policies and has a history of per- University. According to the National dation’s David Kreutzer were featured mitting its scholars to disagree publicly Journal, “Combs and Smith said they’ll on the panel and gave strong arguments on controversial policies.) press the case by presenting alternative against a carbon tax. Green, who once energy, climate change, and clean air as looked favorably on the carbon tax idea, Critics claim, and AEI spokesmen deny, nonpartisan issues affecting families and has written, “I no longer believe that that pro-carbon tax activities at AEI national security. . . . The group intends such a tax (or, for that matter, other eco- are connected to the financial support to replicate the organizational model of taxes) can be implemented in the sort of it receives from Exxon-Mobil. The oil the Young Republicans, creating city, ideal, economically beneficent way that and gas giant once funded pro-science regional, and state chairmen.”

Page 4 Green Watch August 2013 Combs is the daughter of Roberta educating conservatives and the Chris- international president of the United Combs, president of the Christian Coali- tian community about renewable energy Steelworkers). tion, which has been pushing “green” issues and climate change. Prospects policies for some time now. The National Despite the best efforts of carbon tax Journal reported that Roberta Combs led One EF grant to the Coalition for proponents, no elected Republican a Christian Coalition lobbying effort in $100,000 was to “identify and educate has come out in favor of it. In fact, 2010 to encourage GOP lawmakers to supporters of renewable energy within Congressional Republicans have been act on climate change. Michele Combs the conservative community.” $50,000 vehemently opposed to the idea, and said she started to push “clean energy” went to support “faith outreach” on it is doubtful that many coal-state and issues when she was pregnant and was clean cars standards, $300,000 to sup- energy-state Democrats would sup- told she couldn’t eat fish because they port the Coalition’s “America’s Energy port such a tax either. “It is not going might contain mercury from coal-fired Future” campaign, $50,000 to educate to come from the Republicans,” said power plant emissions. “Christian Coalition state chapters and churches on energy and climate is- Michigan Republican Rep. Fred Upton, Michele Combs also has a history of sues.” A $125,000 grant to the National who chairs the House Energy and Com- supporting policies promoting so-called Wildlife Federation was to support the merce Committee. “We are going to do “renewable” energy and Global Warm- Christian Coalition partnership, set our very best to make sure that this is ing theory. In January 2007, she and up to engage conservative leaders on not a mole that pops up again.” her mother attended the Transpartisan energy issues. But some observers believe a Grand Women’s Retreat put on by Reuniting The Energy Foundation’s board of direc- Bargain, a massive backroom deal that America, a group that claims to seek includes the carbon tax, is a possibility. common ground among people of vary- tors includes members associated with ing ideologies. Others in attendance in- such organizations as Resources for the “There is little chance that this Congress cluded Charlotte Pera, VP of the Energy Future, the Nature Conservancy, and the (or even a future Congress in which Foundation; Tipper Gore, now-estranged JEHT [Justice, Equality, Human dignity, Democrats control both chambers) will wife of Al Gore; Chellie Pingree, presi- Tolerance] Foundation. One board enact a carbon tax on straight up-or- dent of Common Cause; Sierra Club member is former Gov. Bill Ritter (D- down votes on the House and Senate president Lisa Renstrom; and Joan Colo.), who is currently director of the floors,” Myron Ebell of the Competi- Blades, co-founder of MoveOn.org. In Center for the New Energy Economy. In tive Enterprise Institute told the Daily an interview, Michele Combs said that 2006, Ritter became the first governor Caller News Foundation. “The danger she personally met with Al and Tipper elected by a billionaire-funded coalition is that it could be included in a big Gore, liked them both, and later attended of interest groups credited with turning budget or tax reform deal. Such deals Al Gore’s “climate change” training. Colorado’s political orientation from are negotiated in secret. A carbon tax conservative/Republican to left-wing/ could be included as part of the pack- The Christian Coalition, a supposedly Democrat. (See The Blueprint: How age and never have an up-or-down floor conservative group, has been accepting the Democrats Won Colorado (and Why vote. Members could then explain that funds from left-wing environmental- Republicans Everywhere Should Care) of course they were against the carbon ists for years. In 2009, the Rockefeller by Rob Witwer and Adam Schrager.) tax provision, but didn’t have a chance Foundation gave the coalition $80,000 to vote on it and had to accept it as part In turn, EF’s grantees include a Who’s to “advance US climate change mitiga- of the deal. I think the fact that it is the Who of left-wing nonprofits, includ- tion and adaptation” policies. In 2010, only thing on the table that would raise ing the Center for American Progress, the Foundation donated an additional a lot of revenue means that it will be a the Earth Island Institute, Earthjustice $20,000 to achieve the same goals. threat for the foreseeable future.” (formerly the Sierra Club Legal Defense The coalition has received at least Fund), the Environmental Defense Furthermore, the Finance Committee $750,000 since 2009 from the Energy Fund, Friends of the Earth, the Natural chairman, Sen. Max Baucus (D-Mont.), Foundation (EF), a pass-through entity Resources Defense Council, the Sierra has been reported saying that support that was founded in 1991 by three of Club Foundation, Greenpeace, Rock for a carbon tax has been “creeping up” America’s largest left-wing environmen- the Vote, the Rockefeller Family Fund, on the Hill and that “everything is on the talist donors: the Pew Charitable Trusts the Union of Concerned Scientists, and table.” There are “more members of the and the MacArthur and Rockefeller the Apollo Alliance (whose leaders Senate now who openly talk about that foundations (see the profile in our sister have included Jesse Jackson Jr., Carl than I have experienced. It is creeping publication Foundation Watch, Jan. Pope of the Sierra Club, former “green up a little bit. Is that going to rise to the 2006). The EF grants are said to be for jobs” czar Van Jones, and Leo Gerard, level of where it is a very strong, serious

August 2013 Green Watch Page 5 provision? I don’t know. But I am not The NAM study looked at two different scrap all existing and planned regula- going to pre-judge it,” Baucus has said. scenarios: tions and restrictions on carbon diox- 1.A carbon tax starting at $10 per ton ide emissions, (3) government must A good idea? that rises at 4 percent per year, similar eliminate subsidies for low-carbon Economist Bob Murphy notes that a to a proposal by the Brookings Insti- and carbon-free energy sources and carbon tax would be a “cure worse than tution. (4) government must impose similar the disease”: “In recent years, more and 2.The same scenario for ten years, but tax penalties on other energy sources, more self-described conservatives, who then the tax is cranked up by “as much such as appropriate tax penalties on generally embrace the free market and as necessary” to achieve 80 percent wind turbines for bird kills and land are suspicious of taxation and govern- emissions reduction by 2053. conservation shortcomings, and solar ment regulation of business, have come thermal power for water depletion.” out in favor of a carbon tax. . . . Con- Under the first scenario, emissions re- servative proponents of the free market, duction is only 30% (far less than the These preconditions for accepting a of all analysts, should be wary indeed 80% pushed by many politicians), and carbon tax are rarely mentioned in of any plan to introduce a new carbon the economy is reduced by $97 billion reports about conservative support for tax in the name of promoting economic in 2023. The second scenario reaches taxing carbon emissions. A possible growth. the goal of 80% reduction, but reduces reason for the omission: a revenue economic growth by $1.4 trillion by neutral bill that would scrap environ- “The dismal record of the U.S. govern- 2053. Talk about trade-offs! mental regulations and “green”/“crony ment in implementing efficient climate capitalism” subsidy programs is a pipe change policies is hardly evidence in Conclusion dream. As ’s favor of a massive new carbon tax (or Despite efforts by liberal lawmakers David Kreutzer said in E&E News, cap-and-trade program). . . . [S]uch a on the Hill and some “conservatives,” it’s a “fantasy” that Democrats would new program will be abused in the politi- grassroots support for a carbon tax has grant so many concessions in order to cal process, and will not be tailored to the failed to sprout up among conservatives. pass a carbon tax. “We know we’re recommendations of climate scientists In fact, many conservative groups are not going to get a deal like this on a and environmental economists.” fighting such a tax. Twenty conserva- carbon tax,” he said. tive groups have signed a petition by Despite some claims that a carbon tax the American Energy Alliance against Meanwhile, scientists are beginning could be used for deficit reduction, it’s a carbon tax and have rallied behind a to debate the nature and extent of the actually a self-depleting revenue source. House resolution that expresses oppo- problem the carbon tax is supposed to It aims to reduce the use of carbon- sition to taxing carbon emissions. The help solve. Soon it may be possible to intensive fuels. As the tax increases, so Alliance declares that “A carbon tax base climate policies on actual science does the incentive to switch to “green” would increase energy prices by design, rather than the politicized pseudo-sci- energy sources, which would deplete exacerbating pain at the pump and rais- ence put out by the Warmers. Roger the tax’s funding base. The better it ing the price of electricity and home Pielke Sr., senior research scientist at works, the less revenue comes in. And heating fuels.” In addition, “The poor- CIRES at the University of Colorado/ not only would consumers be hit with est Americans would be hit the hardest Boulder, told the Daily Caller News paying more for nearly every good they because they spend the largest share of Foundation, “The divergence of the consume, they would also be forced to their income on energy. People on fixed real world observations from the pay more for costly “green” energy from incomes would take a terrible financial [Warmers’] multi-decadal climate sources like wind and solar. hit as they would be forced to pay more predictions, both in terms of forecast- for energy.” ing the magnitude of global warming Murphy is not the only economist who is and of changes in regional climate, skeptical of a carbon tax. A study by the Even the most ardent conservative/ is finally initiating a much overdue National Association of Manufacturers Republican proponents of a carbon tax scientific debate on the level of our also took a critical look at the carbon tax insist on prerequisites for their support. knowledge of the climate system.” and decided it would be a terrible idea. The ’s James Taylor “A carbon tax can be expected to create wrote in Forbes: “Those prerequisites Michael Bastasch is a reporter for the an offsetting drag on the economy be- include (1) a carbon tax must be revenue Daily Caller News Foundation. Dr. cause it will make several major sources neutral, with all collected revenues offset Steven J. Allen (JD, PhD) is editor of energy more costly to use,” said Dr. by reductions in payroll taxes and capital of Green Watch. CRC Haller interns Anne Smith of NERA Economic Con- gains taxes (and NOT offset by liberal Paul McGuire and Thomas Garvey sulting, which authored the NAM study. ‘targeted’ tax cuts), (2) government must contributed to this report.

Page 6 Green Watch August 2013 Counterpoint: There is such a thing as a conservative carbon tax By Andrew Moylan The phrase “carbon tax” strikes fear litigation or congressional action have of several levies that conservatives into the heart of many conservatives. all failed. rightly regard as structurally deficient After all, most proposals to create one or duplicative: capital gains and divi- involve layering energy taxation on The question now isn’t whether or dends taxes, the death tax, and tariffs. top of the overly burdensome tax and not we’ll have emissions reductions regulatory regime we already have to- policies. Unless there’s a miraculous Finally, a conservative carbon tax plan day. But one need not accept the most Republican revolution delivering 60 should include wholesale reform of extreme forms of climate alarmism or Senate votes and a Republican Presi- regulations intended to reduce green- capitulate to growing government to dent in 2016, such efforts are here to house gas emissions. Because of the see the potential benefits of taxing car- stay. The question instead is whether costs and complexity it would impose, bon. There is, in fact, such a thing as a we’ll achieve those emissions reduc- a carbon taxation regime should not be conservative carbon tax, and President tions through onerous regulation, with layered on top of existing carbon regu- Obama is helping illustrate why con- no attention paid to cost, or through a lations. Rather than using command- servatives need to consider one more market-based system with clear price and-control regulation to dictate power seriously. signals attached to all fuels. plant emissions—or, for that matter, set Corporate Average Fuel Economy A conservative carbon tax has three On June 25, in a major speech at standards for automobiles—we would key components: revenue neutral- Georgetown University, the President achieve reductions through a tax levied ity, elimination of existing taxes, and outlined an expensive and complex on every ton of carbon dioxide emitted. regulatory reform. When combined, scheme to regulate greenhouse gas Restructuring in this manner would such policies would yield a smaller, emissions from existing power plants. remove uncertainty for energy produc- less-powerful government, a tax code This policy is likely to cause serious ers and eliminate a source of highly more conducive to investment and disruptions to electricity generation regressive (and completely opaque) growth, and the emissions reductions and to the economy as a whole. Earlier costs to energy consumers. that policy says we must achieve. executive action had already applied Reducing carbon emissions doesn’t stricter standards for building new elec- The first, and arguably most important, need to entail bigger government and tricity generation facilities, effectively component of a conservative carbon a damaged economy. A conservative making it impossible to build coal-fired tax is absolute, bona fide revenue carbon tax could achieve the same goal power plants due to their high concen- neutrality. The federal government is the President seeks to address without trations of carbon dioxide emissions. already too large and expensive. As expanding government or contracting But applying the heavy hand of the conservatives, we routinely oppose economic opportunity. A price signal Environmental Protection Agency to efforts by the Left to raise revenue in operating in an open and free market existing facilities was always poised to order to shore up lavish spending and would encourage a transition to less be the game changer. broken entitlement programs. We carbon-intensive energy sources, should not regard a carbon tax any Unfortunately, it’s a game from which while a clean tax-swap and stream- differently. It should not raise new net conservatives have been completely lined regulatory regime would ensure revenues. Instead, every single dollar absent. Regardless of one’s views on government doesn’t grow larger and raised should be devoted to tax reduc- climate change, the simple reality is more powerful. tions elsewhere in the code. that there will be federal policy to ad- Conservatives should seize the op- dress carbon dioxide emissions. The Ideally, those tax reductions should portunity to once again emphasize the Supreme Court’s decision in Massa- target outright elimination of some of superiority of free markets over central chusetts v. EPA found the agency has the most damaging and anti-growth planning. A revenue-neutral carbon authority to regulate greenhouse gases taxes on the books. For example, an tax with regulatory reform could do if it determines they endanger public MIT analysis estimated that a $20 per exactly that. health. The EPA’s “endangerment ton tax on carbon dioxide emissions finding” asserted their legal authority could generate roughly $1.5 trillion in Andrew Moylan is senior fellow and to do so soon after, and subsequent ef- revenue over ten years. That’s enough outreach director for the R Street In- forts to reverse that plan through either to allow for the complete elimination stitute in Washington, D.C.

August 2013 Green Watch Page 7 GreenNotes Not everyone agrees with the Obama administration’s War on Coal (aka the War on Coal Miners). For in- stance, Jimmy Rose is an Iraq War veteran and former coal miner from Pineville, Kentucky. As a contes- tant on NBC’s “America’s Got Talent,” he performed a song he wrote that, astonishingly, got past censors on the notoriously left-wing network and brought a standing ovation from the audience and the judges. The song goes: “Coal keeps the lights on in my home town, keeps the food on the spoon in my young-uns’ mouths . . . a sundress on my baby girl. Coal keeps the bills paid….” On July 14, hundreds of people turned out to honor Rose in his home town, and he was named honorary mayor and a Kentucky colonel. “He’s done more in 7 minutes than has taken place in the last 10 years, as far as our fight to bring attention to what’s happening here as it applies to coal,” said Bell County Judge Executive Albey Brock.

President Obama’s proposed ultra-regulation of carbon dioxide, which will shut down all coal-fired power plants and drive electricity prices an estimated 50% higher, is projected to cost a family of four $1,000 a year. Compared to doing nothing, the Obama Plan is projected, by the end of the 21st century, to reduce the world’s temperature by 1/189th of a degree.

The League of Women Voters has joined forces with the Sierra Club (profiled in June’sGreen Watch) and with Media Matters, which promotes journalistic bias, to demand that “the nation’s top newscasts give climate change the coverage it deserves,” in the words of the League’s Vanessa Kritzer. She added, “the media needs to connect the dots between climate change and the extreme weather we’re seeing right outside our windows.” (Actually, the number of major tornadoes is down, hurricanes are in a normal cycle, droughts and wildfires are at the usual levels.)

HBO is showing an anti-fracking film,Gasland Part II, that blurs the line between truth and fiction, reports the Daily Caller. The documentary has a scene in which a Texas landowner lights the contents of his garden hose on fire. The problem: A Texas court ruled that the scene was an environmentalist hoax (the hose was attached to a gas vent, not a water line). The movie is a sequel to Gasland, which featured a scene of people who live near fracking operations lighting their tapwater on fire. The problem: The flammable nature of the local water supply is apparently a natural condition that predates local fracking by decades. Gasland received an Oscar nomination for best documentary.

Justin Gillis of the New York Times is freaking out over the state of Global Warming theory. “The rise in the surface temperature of earth has been markedly slower over the last 15 years than in the 20 years before that,” he wrote (June 10). “And that lull in warming has occurred even as greenhouse gases have accumu- lated in the atmosphere at a record pace. . . . Given how much is riding on the scientific forecast, the practitio- ners of climate science would like to understand exactly what is going on. They admit that they do not, even though some potential mechanisms of the slowdown have been suggested. The situation highlights important gaps in our knowledge of the climate system, some of which cannot be closed until we get better measure- ments from high in space and from deep in the ocean.”

The U.K. Daily Mail reported on June 27: “There had been only eight recorded sightings of the white-throated needletail in the UK since 1846 [and the last one 22 years ago]. So when one popped up again on British shores this week, twitchers were understandably excited. A group of 40 enthusiasts dashed to the Hebrides to catch a glimpse of the brown, black and blue bird, which breeds in Asia and winters in Australasia [the Australia region]. But instead of being treated to a wildlife spectacle they were left with a horror show when it flew into a wind turbine and was killed.” In a related story, federal officials announced they will allow wind- power companies in California’s Tehachapi Mountains to kill endangered California condors without fear of prosecution.

Page 8 Green Watch August 2013