An Achievable Climate Change Plan

Posted by on December 18, 2017

By Eric Ashby*

A new study released in the Lancet medical journal paints a startling landscape. Environmental pollution is now deadlier than “all war and violence in the world.”[1] If one is still having trouble understanding the importance of this report, consider that pollution is killing more people than “smoking, hunger or natural disasters… [m]ore than AIDS, tuberculosis and malaria combined.”[2] Carbon emissions are a major source of pollution, and a major driver of climate change. Climate change is a serious issue facing the world, but the United States is severely lacking in efforts to address the issue.[3]

The lack of a viable solution is exacerbated by partisan bickering. Those on the left argue for increasing regulation and complex schemes to weigh the social cost of carbon versus the economic benefits regarding new energy projects.[4] On the right, an increasing number of politicians refuse to acquiesce to near-unanimous scientific evidence that climate change is occurring.[5] However, there is room for agreement in the realm of a carbon tax. A carbon tax is a simple solution that can be easily implemented. The United States is one of the few large, industrialized countries without such a tax.[6] It is an efficient, fair, and reasonable market-based solution to the greatest environmental problem facing humanity. Unlike a complex regulatory scheme, or no scheme at all, carbon tax solutions are supported by a broad range of bipartisan actors.[7]

One viable solution comes from The Climate Leadership Council, an international research and advocacy organization advancing equitable climate solutions. The Council’s carbon dividends plan is composed of a “a gradually increasing tax on carbon dioxide emissions, to be implemented at the refinery or the first point where fossil fuels enter the economy.”[8] Because the tax will reduce emissions over time, it is important that it increases so as to further reduce emissions and keep revenue steady. The entity responsible for the tax will be the one that releases the pollutants into the atmosphere. The proceeds from such a tax would be given to citizens in the form of a monthly dividend check. [9] A key element of the plan, which is partially designed to appeal to conservatives, is the elimination of regulations that will no longer be necessary once the carbon tax is implemented.[10] The Climate Leadership Council makes the argument that “the People deserve to be compensated when others impose climate risks and emit heat-trapping gases into our shared atmosphere.”[11] The Council’s plan should be able to garner support.  A survey taken just after the 2016 election by the Yale Program on Climate Change Communication found that 66 percent of registered voters supported a carbon tax on fossil fuel companies with the money used to reduce personal taxes.[12] That support includes 81 percent of Democrats, 60 percent of independents, 49 percent of Republicans, and 48 percent of Trump supporters.[13]

Another prominent group, the Citizens’ Climate Lobby, endorses a similar plan. The group wants to place a steadily rising fee on fossil fuels. One hundred percent of the fees—minus administrative costs— would be given back to households each month. While a border adjustment would be implemented to stop business relocation.[14] The group explains that their plan “does not increase the size of government, require new bureaucracies[,] or directly increase government revenues.”[15] Instead, the plan creates disposable income for citizens, which should gain “widespread, sustained engagement.”[16] “Economists across the political spectrum agree that a carbon tax is the most effective way to discourage carbon consumption and lower the risks of catastrophic climate changes.”[17]

The types of plans being proposed and advanced by the Climate Leadership Council and the Citizens’ Climate Lobby have attracted support from a variety of prominent leaders from both sides of the aisle. Gregory Mankiw, chairman of the Council of Economic Advisers under President George W. Bush, has written in support of similar taxes that reduce global warming and create economic growth.[18] The libertarian economist, Milton Friedman, has made a cogent argument in favor of carbon taxes as well.[19] Friedman once explained that “there’s always a case for the government to some extent when what two people do affects a third party.”[20] Lester Brown, founder of the Earth Policy Institute, highlights the fact that many European countries, including Sweden, the Netherlands, German, and the United Kingdom, have instituted taxes on environmentally destructive activities.[21] Brown notes that firms in the Netherlands developed equipment to help achieve reductions in emissions and subsequently “gained an edge on firms in other countries, greatly expanding their export sales and earnings.”[22] The former Chairman of the Federal Reserve, Paul Volcker, has stated that global warming will have dire consequences for the planet over the next “30 or 40 years if no action is taken.”[23] He has said that taxes on emissions could be an effective solution.[24]

The idea of a carbon tax and dividend plan has even drawn interest from major political candidates and large businesses that might normally be lukewarm to the idea. During the 2016 presidential campaign, Hillary Clinton explored a universal basic income derived from tax revenues on public harms, such as carbon emissions.[25] The world’s largest oil companies wrote an open letter to governments “saying that they can take faster climate action, if governments provide even stronger carbon pricing and eventually link it all up into a global system that puts a proper price on the environmental and economic costs of greenhouse gas emissions.”[26] The oil companies explained that they want to see governments provide “clear, stable, long-term, ambitious policy frameworks.”[27] Business leaders, including “Caterpillar Chief Executive James Owen and FedEx CEO Fred Smith have voiced their preference for a [carbon] tax, which they believe would be clearer, fairer and less bureaucratic.”[28]

This solution has broad appeal and immense potential. Those on the left need little convincing that we need solutions to climate change and we need them now. Conservatives need more convincing. The carbon tax and dividend solution appeals to many influential conservatives, and there are convincing arguments that can be made to persuade those of a more libertarian bent that the solution is ideologically sound.

The air we breathe is a common resource. Those who pollute it do so at the expense of all, to the benefit of a few. A recent report by the Government Accountability Office makes it clear that “climate change is already costing U.S. taxpayers billions of dollars each year, with those costs expected to rise as devastating storms, floods, wildfires and droughts become more frequent in the coming decades.”[29] A carbon tax asks polluters to pay a fee in exchange for the privilege to pollute. The revenue is returned to citizens, to spend as they please. This is the smart, efficient, and effective solution that the United States needs to address climate change in a bi-partisan, long-term manner.

*Eric Ashby is an Associate Editor on MJEAL. He can be reached at eashby@umich.edu.


The views and opinions expressed in this blog post are those of the authors and do not necessarily reflect the official policy or position of the Michigan Journal of Environmental and Administrative Law or the University of Michigan.

[1] Katy Daigle, Study Finds Pollution is Deadlier Than War, Disaster, Hunger, Phys.org (Oct. 20, 2017), https://phys.org/news/2017-10-world-pollution-deadlier-wars-disasters.html.

[2] Id.

[3] See Where Carbon is Taxed, Carbon Tax Center, https://www.carbontax.org/where-carbon-is-taxed/ (last visited Oct. 26, 2017).

[4] Phil Mckenna, GOP and Democratic Platforms Highlight Stark Differences on Energy and Climate, Inside Climate News (Jul. 26, 2016), https://insideclimatenews.org/news/26072016/democrat-republican-party-platforms-energy-climate-change-hillary-clinton-donald-trump.

[5] Dana Nuccitelli, Conservatives are Again Denying the Very Existence of Global Warming, The Guardian (Jul. 10, 2017), https://www.theguardian.com/environment/climate-consensus-97-per-cent/2017/jul/10/conservatives-are-again-denying-the-very-existence-of-global-warming.

[6] See Where Carbon is Taxed, supra note 3.

[7] Steve Valk, Members of Bipartisan House Caucus Introduce Climate Solutions Commission Act, Citizens’ Climate Lobby (May 4, 2017), https://citizensclimatelobby.org/members-of-bipartisan-caucus-introduce-climate-solutions-commission-act/.

[8] The Conservative Case for Carbon Dividends, Climate Leadership Council (2017), https://www.clcouncil.org/media/TheConservativeCaseforCarbonDividends.pdf.

[9] Id.

[10] Id.

[11] Id.

[12] John Schwartz, ‘A Conservative Climate Solution’: Republican Group Calls for Carbon Tax, N.Y. Times (Feb. 7, 2017), https://www.nytimes.com/2017/02/07/science/a-conservative-climate-solution-republican-group-calls-for-carbon-tax.html.

[13] Id.

[14] Citizens’ Climate Lobby, https://citizensclimatelobby.org/ (last visited Oct. 26, 2017).

[15] Id.

[16] Id.

[17] Laura D’Andrea Tyson, The Myriad Benefits of a Carbon Tax, N.Y. Times: Economix (June 28, 2013), https://economix.blogs.nytimes.com/2013/06/28/the-myriad-benefits-of-a-carbon-tax/#more-164986.

[18] Gregory Mankiw, Gas Tax Now!, Harvard Economics (May 1999), https://web.archive.org/web/20010902083125/http://post.economics.harvard.edu/faculty/mankiw/columns/may99.html.

[19] See Jeff McMahon, What Would Milton Friedman Do About Climate Change? Tax Carbon, Forbes (Oct. 12, 2014), https://www.forbes.com/sites/jeffmcmahon/2014/10/12/what-would-milton-friedman-do-about-climate-change-tax-carbon/#5a7c1196928c.

[20] Id.

[21] Lester R. Brown, Eco-Economy: Building an Economy for the Earth Chapter 11 (2001), http://www.earth-policy.org/books/eco/eech11_ss3.

[22] Id.

[23] See Associated Press, Economist Paul Volcker Says Steps to Curb Global Warming Would Not Devastate an Economy, International Herald Tribune (Feb. 6, 2007), https://web.archive.org/web/20090210011059/http://www.iht.com/articles/ap/2007/02/06/news/FIN-GEN-Egypt-Volcker-Global-Warming.php.

[24] Id.

[25] Kelly Swanson, Hillary Clinton’s Realism vs. Bernie Sander’s Idealism, Vox. (Sept. 13, 2017), https://www.vox.com/2017/9/13/16302866/hillary-clinton-what-happened-bernie-sanders-health-care-plan.

[26] Six Oil Majors Say: We Will Act Faster With Stronger Carbon Pricing, United Nations Framework Convention on Climate Change (June 1, 2015), http://newsroom.unfccc.int/unfccc-newsroom/major-oil-companies-letter-to-un/.

[27] Id.

[28] Scott Bittle & Jean Johnson, The Energy Debate We Should be Having, Forbes (Nov. 10, 2009), https://www.forbes.com/2009/11/10/climate-energy-legislation-leadership-citizenship-warming.html.

[29] Michael Biesecker, Report: Climate Change Cost U.S. $350 Billion Over Last Decade, Talking Points Memo (Oct. 24, 2017), http://talkingpointsmemo.com/news/report-climate-change-cost-us-350-billion-decade.