The dream of a bipartisan deal on carbon taxes is evergreen in US political circles. Lately, it has taken on a somewhat more specific form. The Climate Leadership Council (led by emeritus Republicans George Shultz and James Baker III) and the libertarian Niskanen Center have both proposed various forms of a deal in which Republicans would agree to a carbon tax in exchange for Democrats agreeing to repeal regulations on carbon emissions and fuel economy (among others).
Reporter Amy Harder (who recently moved from the Wall Street Journal to Axios) points out that no Republicans support the deal. But she also says that environmental groups and Democrats will not accept it — and their refusal is “the logjam preventing any climate compromise.”
Niskanen’s David Bookbinder (formerly of Sierra Club) told Harder that green groups actually would accept the trade if the price was right, they just won’t say so. "Like most entities that have no experience in actual negotiations,” he said, “[environmental groups] believe that they can't say publicly that they will make the trade until the R's put the tax on the table.”
Our thought bubble: At least one side is going to have to be the first to show a willingness to compromise privately and eventually publicly to break the logjam that is this perennial carbon tax debate. So far, that's not happening. A spokesman for the Sierra Club declined to comment on the record about their official position, which is that they wouldn't support a trade of EPA regulation for a carbon tax.
This is shaping up to be a classic Washington dynamic: Democrats being pressured to compromise in advance, with phantoms.
Here’s the thing about the “perennial carbon tax debate” — it’s not a debate between the two parties. No actual Republican officeholder has proposed a carbon tax or signaled support for one. Conservative power brokers like Grover Norquist and the Heritage Foundation (which is writing Trump’s environmental initiatives) have stated in no uncertain terms that a carbon tax is a non-starter.
House Republicans voted unanimously for resolution condemning carbon taxes. Senate Republicans voted unanimously for an amendment that would permanently prevent the federal government from taxing carbon. Mitch McConnell has “dared” Democrats to propose a carbon tax in the Senate.
And Trump himself has been quite clear.
.@thehill Your story about me & the carbon tax is absolutely incorrect—it is just the opposite. I will not support or endorse a carbon tax!— Donald J. Trump (@realDonaldTrump) May 13, 2016
There is zero authentic support from the conservative movement or elected Republicans for a carbon tax. So the “debate” mostly consists of journalists and pundits (who have received these proposals rapturously) pressuring the left to reveal what it’s willing to give away.
Bookbinder would have us believe that real, experienced negotiators blab about what they’re willing to trade away in advance not only of a concrete offer but of anyone to negotiate with.
It would be indescribably stupid of Democrats to fall for this. Let us count the ways.
1) “A carbon tax” is not, in and of itself, a thing
There is no policy just called “a carbon tax.” At a bare minimum, a policy proposal must answer two sets of questions.
First, how high is the tax? Does it increase over time, and if so, how fast, and by what mechanism? Does it expire, and if so when?
Second, what is to be done with the revenue? Does it fund decarbonization? Go to the communities most vulnerable? Reduce other taxes (if so, which taxes)?
The Shultz/Baker and Niskanen proposals do answer some of these questions, but neither can claim any backing from any Republican with any power.
Until that happens, there is no policy. The term “carbon tax” has no more content on its own than the term “carbon regulation.” Everything depends on what kind and how stringent. A $5 carbon tax that goes to reduce the deficit and a $50 carbon tax that funds deployment of clean energy share very little but a name.
So saying that unnamed Republicans are “open to a carbon tax” tells us precisely nothing and is worth precisely nothing in trade.
2) No elected Republican official is going to propose a new tax
It’s somewhat surreal that this needs saying at all, but: No elected official in today’s Republican Party is going to back the creation of a new carbon tax, certainly not in the name of a compromise with the Democrats on climate change.
Considerations weighing against it:
- Republicans hate taxes. Raising taxes is the single most disqualifying ideological heresy in the GOP.
- Republicans don’t believe in climate change, and a carbon tax is a tacit omission that climate change is a problem.
- Republicans do not want to hand Democrats any legislative achievements, much less on a core issue.
- Any such proposal would bring down the wrath of the entire party apparatus, generate excoriating coverage in right-wing media, and almost certainly guarantee a primary challenge.
Considerations weighing for it:
- Uh … some oil companies have said they wouldn’t oppose it.
Who among today’s Republicans would do this, and why?
3) No, Republicans do not need revenue
It is an article of faith among centrists, fiscal conservatives, and VSPs of various stripes that the US is on the road to fiscal ruin and eventually there’s going to have to be a deal to reform taxes and tame the long-term deficit. Doing that is going to require new revenue. (You can’t get there entirely through tax cuts.) A carbon tax is one of the least offensive forms of revenue, so it could be part of a “grand bargain.”
As it happens, the US is not on the road to fiscal ruin and the long-term deficit is not a particularly pressing problem. But never mind that. Even granting the alleged fiscal crisis, what evidence is there that Republicans are willing to consider new revenue?
George W. Bush ran up huge deficits to pay for his tax cuts. Dick Cheney famously said, in 2002, “Reagan proved that deficits don’t matter. We won the midterm elections, this [large debt-financed tax cuts for the wealthy] is our due.”
Obama, who was far more serious about the deficit than his deficit-flogging critics on the right ever were, was practically desperate for a grand bargain. But in one negotiation after another, no matter what Obama offered to sacrifice (and he offered a lot), House Speaker John Boehner simply couldn’t get his caucus to sign on to a penny of new revenue.
The power of the Freedom Caucus, the House’s most absolutist anti-tax faction, has only grown. Paul Ryan has shown zero leadership ability. Trump has a monomaniacal attachment to coal miners, and coal will be the first and hardest hit by any carbon tax.
All signs point to Republicans reverting to standard operating procedure: large, deficit-funded tax cuts for the wealthy. The need for revenue has not troubled them for decades. It’s hard to see why it would now, in their moment of triumph.
4) Democrats and Republicans are after different things in carbon policy
The debate over policy mechanisms risks missing the point. The parties do not primarily disagree over means, they disagree over ends, which is what makes honest negotiation impossible.
Democrats want to reduce carbon emissions. The measure of how well a carbon-reduction policy is working is how much it impacts those responsible for the most carbon. If fossil fuel companies adapt to the policy without difficulty, the policy is weak.
Republican officeholders want to protect fossil fuel industries. They do not believe that climate change is real, or if it is real, that it is a serious risk warranting a strong policy response. (Those few who do cannot say so publicly.) The party has no interest in reducing carbon emissions as such. Its involvement in climate policy is primarily geared toward protecting donors and allies in the fossil fuel industry from the impacts of policy.
A carbon tax cannot square that circle. If it is high enough to be effective, it will be anathema to fossil fuel interests. If it doesn’t bother fossil fuel interests, it’s not high enough to be effective.
5) The whole thing’s a fantasy anyway
How exactly would Democrats “trade” EPA regulations? As things currently stand, EPA is legally obliged to regulate carbon, which covers both mobile sources (cars) and power plants. There’s almost no chance Republicans can overturn EPA’s endangerment finding on carbon dioxide (its official ruling that CO2 is a danger to public health), because the courts will ask to see the evidence, which is overwhelmingly on EPA’s side.
So the only way to be rid of EPA carbon regulations for good is to amend the Clean Air Act to explicitly exclude carbon dioxide.
I cannot imagine what would come of today’s Republican Congress opening up the Clean Air Act for revision, but I suspect Democrats would not like the result.
Among other things, this concession would effectively be permanent. Democrats would be surrendering a powerful tool against carbon, forever, in exchange for a carbon tax that is vulnerable to every subsequent Congress.
There’s no votes for that. There’s no votes for any of this, on either side. Incanting “carbon tax” cannot align two parties supporting fundamentally different policy goals based on fundamentally different understandings of the facts.
"We could spend time coming up with this grand compromise and then start working with the Hill and it would all collapse," a Trump administration official told Harder of the tax-regulation swap. "We wouldn't waste our time on it."
That may be the only smart decision made by this administration yet.
There’s nothing wrong with people pushing this idea, if they think it’s a good idea. But elected Democrats are surely aware that a) there is no actual support for it among the GOP and b) when it comes to carbon, federally speaking, EPA regulations are the only tool left on the table.
Showing your cards — admitting that you’re willing to surrender your last remaining ace — in exchange for the approval of the DC cognoscenti … well, surely that’s a mistake Democrats won’t make.