And now, ve may begin?
Readers of a certain age, and a certain literary bent, will recognize the words of Alexander Portnoy’s psychiatrist, spoken at the close of Philip Roth’s transgressive 1969 novel, Portnoy’s Complaint.
After lo these many years, they popped into my head today as I read that Senate Democrats had finally thrown in the towel on an energy bill that would have included a partial cap-and-trade provision for limiting carbon emissions from power plants. The bill, written by Senators John Kerry and Joe Lieberman, was touted by Washington insiders and some major environmental groups as this year’s last hope for federal climate legislation. Yet it would have relied on carbon offsets and other dodges to postpone the day of reckoning with true, visible carbon emissions pricing — the cornerstone of meaningful climate policy.
Instead, reported the New York Times, Senate Democrats will pursue a limited bill aimed at increasing oversight of oil drilling and tightening energy efficiency standards — with no direct assault on climate-destabilizing CO2. (For a later Times story amplifying the first, click here.)
Yes, now, we may begin — “we” being Americans who care about climate, sustainability, and Earth — to unite around a climate approach that is effective, equitable and transparent enough to win the support of our fellow citizens and a Congressional majority.
I’m referring of course to the idea advanced by climatologist Jim Hansen as fee-and-dividend and by the Carbon Tax Center as a revenue-neutral carbon tax, by which fossil fuel extractors and importers pay the U.S. Treasury fees pegged to the carbon content of the coal, oil and gas they take from the ground or bring into U.S. ports, and the Treasury distributes the revenues to all Americans via equal monthly dividends (“green checks”), or by tax-shifting from regressive taxes such as payroll taxes.
The Senate’s antipathy to even the partial cap-and-trade proposed by Sen. Kerry will doubtless be spun as indicating that for the foreseeable future the well for climate legislation has been poisoned. The Carbon Tax Center says that the opposite may be true: with cap-and-trade out of the way at last, the political well can begin to be de-toxified so that the effective, equitable and transparent carbon fee-and-dividend can be seriously considered.
For this to happen, however, the Big Green groups like EDF and NRDC that for years have dominated climate discourse among environmentalists, and that convinced Congressional Democrats and the White House that the only way to “put a price on carbon” in America was via carbon cap-and-trade, will have to abandon that approach and allow others, and themselves, to try a fresh start.
It will be said that cap-and-trade failed because Fox News and other climate deniers branded it as “cap-and-tax” and, therefore, a carbon tax (or fee) cannot possibly succeed. And it is true that carbon cap-and-trade was looked to, years ago, as a way to build on the success of acid rain cap-and-trade, win over Republican free-marketers, and put a price on carbon without having to parade the dreaded t-a-x word before the public.
In the event, though, carbon cap-and-trade did none of these things.
Instead, Big Green’s pursuit of carbon cap-and-trade tethered the climate movement to complex financial instruments and branded us as servants of Wall Street elites. It opened the legislative floodgates to off-the-charts Beltway deal-making that rightly repulsed the public. Perhaps most importantly, the co-optation of climate advocacy by the cap-and-traders robbed us of the high moral ground we might have shared with abolitionists, suffragists, labor agitators and civil rights workers — true American heroes who fought to liberate our society of oppression and injustice.
If you’re in the climate movement, you recognize that fossil fuels’ assault on Earth’s climate is an ultimate form of oppression and injustice: of rich against poor, of the profligate against the frugal, of the present against the future. Ending this assault will require concerted action on many fronts; and it starts by internalizing the climate-damage costs of coal, oil and gas into their prices, so that the free ride for fossil fuels is ended and all of the alternatives, from energy efficiency, renewable energy and low-carbon fuels to conservation-based behavior and mindfulness toward energy consumption, may compete fairly and effectively.
Political action to accomplish this must be done in bright sunlight, not in Beltway shadows.
Cap-and-trade, let us hope, is dead. And now, we may begin!
Photo: Flickr / generica.
Michael Smith says
Love the Portnoy reference. Love the whole thing, actually.
Interesting that the Dems couldn’t, or wouldn’t, *even* do C&T. Seems unlikely that they will do anything better. How we will ever get where we need to be does not clearly appear, but at least it’s a relief that the horrifying Rube Goldberg machine of C&T has been sent to the junkyard.
Sallan Foundation says
I believe you misread the politics. Democrats won’t hang together on any climate bill and the only snowflake’s chance is if the mid-term elections bring in climate friendlier Senators. For this to happen, you’ll have to show me why carbon tax would improve that snowflake’s chances. I don’t see it. If advisors Emanuel and Axelrod have Obama’s ear that the political payoff on climate change isn’t equal to that on health care, financial tweaking or extending unemployment insurance, they’ve won.
This is not a debate about the best is the enemy of the good. Instead, let’s keep up organizing locally and regionally. Show the world (well, US climate action opponents or the indifferent) that there is a better way.
Ken Small says
I don’t pretend to know the politics well enough to judge which approach has a better chance. I basically like the policy proposed here. But let me mention that it makes a big difference whether revenues are returned through equal monthly checks or by reducing other taxes (whether or not regressive) — reducing other taxes has the big advantage of offsetting the small but inevitable damage that higher energy prices will cause to economic activity.
Michael Hoexter says
Thanks Charles for a great piece. This clears the way for effective policy instruments that address specific issues. Comprehensive targets and pledges are fine but policymakers need to get the individual instruments right. In an omnibus bill, these instruments got “dulled” or corrupted. Omnibus bills are also, almost by definition, non-transparent. Transparency is one of the key political virtues that those who have been pressing for cap and trade seem to always discount. Onward to better policy!!
David F Collins says
As those of us of past a certain age remember Lawrence Welk saying, “Wunneful, wunnerful!”
And to paraphrase what subjects of days long gone (Thank God!) would say, “The Climate Bill is dead! Long live the Climate Bill!”
Now, how do we go about getting the new Climate Bill enthroned?
Jeanne Fudala says
Charles, I so hope you’re right!
Many really dedicated climate activists, as opposed to Big Green, have turned to the cap and dividend bill, the Cantwell/Collins CLEAR Act as the best thing we can hope to achieve. It’s clear (pun intended) to me that won’t get any further, either. I hope great people like Ted Glick and Van Jones will get behind the carbon fee and dividend proposal.
And could someone with more influence/expertise please keep trying to put a bug in Rachel Maddow’s ear. She is so articulate on so many things but she is so wedded to cap and trade. It’s ironic that I have to be glad the obstructionists blocked it.
Jeanne Fudala says
P.S.
I also meant to add that I so respect Janes Hansen who is so straight-on about anything pertaining to climate!
Albert Bates says
Sallan Fdtn writes: you’ll have to show me why carbon tax would improve that snowflake’s chances. Sallan, the political perk on this is the dividend. Checks in everyone’s mailbox — more, and more often, than the token stimulus checks of the past couple administrations. The CLEAR Act showcases this selling point. It is a vote-getting goldmine.
Dean Weichmann, Wisconsin says
Albert’s comment suggests to me that this should become a climate dividend rather than a carbon tax.
Dean Weichmann, Wisconsin says
On second thought, a carbon dividend.
James Newberry says
Thanks Charles for all your work (over decades) on energy economics.
Please consider that our collective foot is on the accelerator of climate change through billions of dollars of direct fuel subsidies, tens of billions of indirect (tax expensing) fuel subsidies, and hundreds of billions per year of externalized subsidies that exist due to the policy of “cheap fuels.”
I am in favor of your concerns, but should we continue to drive the climate toward meltdown via. subsidy policy. If not, then let’s start identifying these, such as the work of Green Scissors 2010 report and Sima Gandhi of Center for American Progress.
Dan says
A carbon fee (or tax) is likely to be opposed, not only by those who oppose any new tax, but by those who favor taxes and who live off of them.
Consider the current dire economic situation of most state and local governments. Think of schools as an example. When energy prices rise due to a carbon fee, where will the money come from to cover the higher cost or to pay for new conservation improvements? Maybe we lay off some teachers? Or maybe we raise local taxes? We will have our carbon dividends in our pockets to help pay extra taxes, but a lot of people will have trouble making the connection.
How do we maintain revenue neutrality; or do ve begin to compromise already?
Ezra Small says
This is a great piece Charlie, thank you for your wonderful insight on this very crucial, political, social, and environmental opportunity!
David F Collins says
“Americans’ sense of energy savings? Small change.” — TDC’s 2010/08/17 charming essay on typical Americans’ awareness of CO2 emissions, makes the point that most of us have a poor understanding of how to take effective conservation steps; we do not see it as something really worth paying attention to. And the Carbon Tax is the most effective way to change that. Money is an effective motivator. As Francisco de Quevedo put it, “Poderoso caballero — Es don Dinero.” The Carbon Tax, in the Fee-And-Dividend form, is the best way to go. This is pretty well acknowledged by thinking people, on the political right (yeah, there actually are some, I met one in Michigan a few months ago) and left.
But how about the unthinking people? Political obstacles are formidable; when there is such massive opposition to doing the minimally effective, it’s gonna be horrendous to do something effective. Demagoguery and bigotry cannot be ignored on the simple basis of their being wrong both morally and factually.
Yes, now we may begin. But how? It’s kinda like, how’re we mice gonna bell that cat?
Andrés J. Forno says
Raising the price of carbon is a necessary condition for implementing carbon policies, and because the health of biosphere is a global public good, everyone, everywhere on earth must face the same price, and everyone, everywhere on earth must be indeminized in the sme way for the damage to the biosphere. This means that if the best solutions so far, these are “carbon fee and dividend” or “revenue-neutral carbon tax”, are to be completely fair; they have to be of worldwide application, i.e. any African shall be paying the same tax and receiving the same dividend as any American will. But, will such fairness ever be possible, given the fact that a human in America consumes at least 4 times more carbon than a human in Africa?