CHAPTER 5 Put a Price on It. Or Not. The stock market is roaring and planet Earth is wailing. —STEVEN MAGEE AS MY FRIEND BILL MCKIBBEN LIKES TO POINT OUT, THE FOSSIL fuel industry has been granted the greatest market subsidy ever: the privilege to dump its waste products into the atmosphere at no charge.1 That’s an unfair advantage over climate-friendly renewable energy in the playing field that is the global energy marketplace. We need mechanisms that force polluters to pay for the climate damage done by their product—fossil fuels—tilting the advantage to those forms of energy that aren’t destroying our planetary home. Such mechanisms can take the form of tradable emissions permits, also known as cap and trade. In this policy, government allocates or sells a limited number of permits to pollute, and the polluters can buy and sell these permits. This strategy limits pollution by providing economic incentives for polluters to reduce emissions. Another policy is a carbon tax, wherein a tax is levied at the point of sale on the carbon content of fuels or any other product yielding greenhouse emissions. Additionally, carbon credits can be granted for activities that take carbon out of the atmosphere and bury or store it, thus offsetting carbon emissions. Fossil fuel interests and right-wing anti-regulation plutocrats have fought tooth and nail against any legislation aimed at pricing carbon emissions, for this would diminish their profits. In 2009, they torpedoed a carbon-pricing bill in the United States and similar legislation in Australia and elsewhere. Moreover, a coalition of petrostate actors, including Russia and Saudi Arabia, joined in the United States by the Trump administration, has also conspired to block carbon-pricing initiatives. Ironically, some environmental progressives are now providing them an unintentional assist. DISOWNING THEIR OWN As you may recall, former Republican president George H.W. Bush signed a cap-and-trade amendment to the Clean Air Act in 1990 that required coal- fired power plants to scrub sulfur emissions before they exited smokestacks. Between 1990 and 2004, sulfur emissions from coal-fired plants fell 36 percent, even as power output increased by 25 percent. The roughly nine- million-ton cap on sulfur emissions was reached in 2007 and fell to about five million tons in 2010. Lakes, streams, and forests in the Northeast— including the western Adirondacks where my family and I often vacation in the summer—recovered. It was a true environmental success story. You might think Republicans would want to own it—and build on this legacy by tackling the climate crisis using the very same market approach.2 Instead, the GOP disowned its own brainchild. Presumably expecting some buy-in from moderate Republicans, a cap- and-trade bill sponsored by Democratic congressmen Henry Waxman of California and Edward Markey of Massachusetts (then in the House) was proposed in 2009 to regulate carbon emissions. It passed, but largely on a party-line vote. Opposition from fossil fuel interests and their front groups —which attempted to brand it “cap and tax”—was perhaps predictable.3 But there was also opposition from some in the environmental community, who argued that the problem was that it wasn’t a tax. They favored an explicit carbon tax over a system of tradable emission permits.4 Nobel Prize–winning economist and progressive New York Times columnist Paul Krugman argued that while either a carbon tax or a cap-and- trade policy could achieve the needed reductions in carbon emissions, “in practice, cap and trade has some major advantages, especially for achieving effective international cooperation.” He thought the House bill was likely the best compromise possible given the prevailing politics: “After all the years of denial, after all the years of inaction, we finally have a chance to do something major about climate change. Waxman-Markey is imperfect, it’s disappointing in some respects, but it’s action we can take now. And the planet won’t wait.”5 Further confusing the politics of the matter was the fact that some Republicans actually supported a carbon tax. But with a catch—it had to be “revenue neutral,” which is to say, it couldn’t increase the overall taxation on the American people, so other taxes, such as income taxes, would have to decrease. South Carolina congressman Bob Inglis and Jeff Flake of Arizona—both fiscally conservative Republicans—made the case for such a vehicle as an alternative to cap and trade.6 Fossil fuel interests and their abettors now faced a grave threat. A climate bill was one house of our bicameral legislative branch away from being the law of the land and even some Republicans supported a price on carbon. The inactivists kicked into high gear. First, the Koch brothers used their tremendous wealth and influence to wage a massive disinformation campaign to defeat the climate bill.7 They had shills such as Myron Ebell of the Koch-funded Competitive Enterprise Institute misrepresent the cap-and- trade bill as a “tax” bill that would hurt our economy and everyday citizens. Even the New York Times was hoodwinked into promoting that interpretation. Describing him as “a strong advocate of the acid rain cap- and-trade program,” Times reporter John M. Broder quoted C. Boyden Gray, who had been White House counsel during the first Bush administration, saying that “opponents were largely correct in labeling the Waxman-Markey plan a tax.”8 The Times failed to note that Gray had worked with the Koch brothers as a member of the board of directors for Citizens for a Sound Economy, a conservative think tank the Kochs had founded in 1984. Citizens for a Sound Economy would lead to Freedomworks and Americans for Prosperity.9 Americans for Prosperity was in fact a Koch brothers front group. The Kochs employed it as a vehicle for sponsoring a “hot-air” bus tour around the country promoting climate-change denial and fear-messaging about how regulating carbon emissions would supposedly destroy the economy.10 They even constructed an Astroturf movement that became known as the “Tea Party” to create the illusion of widespread grassroots opposition to the climate bill, marshaling a rabble of disaffected citizens resentful of a changing fiscal, racial, and social landscape that seemed to have left them behind.11 Meanwhile, the Kochs served notice to any Republican legislators who might think about supporting climate legislation by making an example of Congressman Bob Inglis (R-SC), who, as noted earlier, had supported a carbon tax bill. Christopher Leonard, author of Kochland, described what happened during Inglis’s reelection bid in 2010: “Koch Industries stopped funding his campaign, donated heavily to a primary opponent named Trey Gowdy and helped organize teams of Tea Party activists who traveled to town hall meetings to protest against Mr. Inglis. Some of the town hall meetings devolved into angry affairs, where Mr. Inglis couldn’t make himself heard above the shouting. Mr. Inglis lost re-election, and his defeat sent a message to other Republicans: Koch’s orthodoxy on climate rules could not be violated.”12 The Kochs’ efforts were successful. Democrats were unable to achieve filibuster-proof support (that is, a minimum of sixty votes) in the Senate, and the bill never went forward to President Obama’s desk. Even with both houses of Congress under their control and a president in favor of climate action, Democrats were unable to pass a climate bill. While one might blame them for fecklessness, there is little doubt that cap and trade, as Broder at the Times put it, “ran into gale-force opposition from the oil industry [and] conservative groups that portrayed it as an economy-killing tax.”13 Tens of millions of dollars from the Koch brothers and dark-money spending aimed at sinking the bill didn’t help matters. Nor did a beleaguered president who had already expended considerable political capital fighting a war with the right over health-care reform. And thus ended, with little fanfare, what had once seemed a promising prospect, finally, for a climate bill in the United States.14 (A noteworthy postscript: Bob Inglis, who in full disclosure is a personal friend, now leads an organization aimed at bringing Republicans on board with climate action. He travels around to speak to conservative audiences about free-market approaches to pricing carbon, and in 2015 he received the JFK Profile in Courage Award.15) Similar episodes played out in the other major industrial nations. Australia provides perhaps the most striking example.16 In some sense, what transpired down under was even more disillusioning than what had occurred in the United States: The Aussies did have a national price on carbon, and they lost it. In 2011, after a long, drawn-out battle that dated back several governments, Julia Gillard, prime minister of the ruling labor government, passed an emissions trading scheme, or ETS (another name for a cap-and-trade system). Drawing from the very same textbook that inactivists used to sink the US cap-and-trade bill, Australia’s center-right opposition party (the “Liberals”—who are actually conservatives) misrepresented the measure as a “carbon tax” that would hurt individuals. This was particularly problematic for Gillard, who had made a campaign promise not to pass a carbon tax but had not ruled out an emissions trading measure.17 The usual suspects—Koch-funded front groups combining forces with coal interests and the Murdoch media (which dominate the Australian media landscape)—went to work, savaging Gillard and the Labor Party.18 The attacks, as described by the New York Times, “coalesced around the promise and the tax.” The ETS was portrayed “as a burden that would hurt businesses and cost households, instead of one that would cut pollution and ensure a more secure future for our children.” There was only the smallest grain of truth to that claim.