Regardless of political persuasion, partisanship is easy. "Us" versus "Them." Irrational and misleading appeals to base political instincts. Self-interested numbers games with no hint of compromise. Gagging congressional debate in the dead of night. Placating donors with last-minute, hand-written scribbles on legislation. In these endeavors, neither leadership or patriotism is required. As electoral winds change, "progress" is inevitably gobbled up by political backlash. Easy come, easy go.
And so it is on the Republican’s tax bill. In the early hours of Saturday morning, Senate Majority Leader Mitch McConnell, R-Ky., explained, "At the end, there was not a single Democrat who thought this was a good idea, and so we're going to take this message to the American people a year from now." With such partisan beltway point scoring, it’s no surprise support is limited to the most rusted on Republicans — a mere 32 percent of Americans approve of the tax bill.
Laying well beneath the partisan rancor, however, are the beginnings of a bipartisan tax proposal — a carbon (pollution) tax. Against the backdrop of voter discontent at dysfunction in Washington, D.C. a carbon tax presents an opportunity for both parties to pursue a more secure economic and environmental future for Americans.
Working in partnership with Democrats, Sen. Lindsey Graham, R-S.C., recently expressed support for a carbon tax. Just last week Democratic House Representative John Larson renewed calls for a carbon tax where the revenue raised would fund a $1 trillion infrastructure package. This follows similar calls from old-guard Republican economists and, incredibly, large oil companies including Exxon Mobil, BP, and Royal Dutch Shell. Fed up at being marginalized as "anti-environment," there is also growing appetite for action among a broader group of Republican Congressional representatives with 31 Republicans joining the House’s bipartisan climate solutions caucus.
A carbon tax is a market based mechanism that increases the price of polluting. It’s levied on corporations such as utilities generating electricity or refineries drilling for oil and gas.
The revenue raised would be pumped back into the U.S. economy funding job creating infrastructure and transition support for workers in coal county. Cash rebates could also be provided to Americans impacted by slight increases in electricity prices – know colloquially as a carbon dividend.
This is smart policy and good politics. There is no increase in the size of government and no blunt regulations restricting pollution. After having the idea explained to them, no wonder two-thirds of polled Americans support the idea, including 48 percent of Trump voters.
Business benefits too. With a carbon tax comes long-term certainty and therefore greater investment. In the words of BP Chief Executive Bob Dudley, "A global carbon price would help to unleash market forces and provide the right incentives for everyone to play their part." In addition, lower and middle income households will likely spend their carbon dividend, thus contributing to economic growth.
Over 42 countries and 25 subnational jurisdictions now have a price on pollution. Where America’s exports compete with countries that do not have a similar system, exceptions can be granted so that American companies are not disadvantaged.
There’s one hitch. If you don’t believe pollution is bad, a carbon tax can be a tough sell. While climate change denial is increasingly a fringe view, there is potential for these extremes to stall progress. Just ask Australia. As Federal Opposition Leader, Tony Abbott – the resident climate change denying nutter — led a scare campaign that destroyed a well-designed carbon tax. Australia is worse for it — less business certainty, fewer resources to support coal industry workers losing their jobs, and a stagnating renewable energy sector.
Yet, in the U.S., even climate change skeptics believe a carbon tax has merit. James A. Baker III, Treasury Secretary under Ragan and Secretary of State under Bush, explains "I was, and remain, somewhat of a skeptic to the extent that man is responsible for climate change. But I do think that the risks associated with it are too great to ignore, and that we need an insurance policy."
With America’s infrastructure deteriorating by the day and the risks associated with climate change mounting, a carbon tax is a no brainer. Beyond the prospect of a positive environmental and economic legacy, America’s democracy could benefit from a well overdue success story. We’ll soon see if America’s supposed leaders are up to the task.
Matt Tyler has worked for the last decade across the private, public, and academic sectors. Currently he is focused on improving social services primarily working with governments to improve child welfare, criminal justice, and homelessness. Matt is a former management consultant where he supported executives develop and implement strategy working with large companies in financial services, telecommunications, manufacturing, postal services, and retail. Subsequently he worked as an economist for Australia’s foreign service and as a policy adviser to the Federal Australian Labor Party on economic and social policy. He holds a Master of Public Policy from the Harvard Kennedy School, Bachelor of Economics (Honors) from Monash University, and a dual degree in Arts (Psychology)/Commerce (Finance) from the University of Melbourne. He tweets as @matt_b_tyler. To read more of his reports, Click Here Now.
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