A group of eight Republican elder statesmen released a proposal on February 8th for a revenue-neutral carbon tax that returns proceeds to households. The group, working together under the “Climate Leadership Council”, includes three former Treasury secretaries – Henry Paulson, George Shultz and James Baker, III ; and two former Chairmen of the President’s Council of Economic Advisers, Martin Feldstein and Gregory Mankiw. The other two are Rob Walton, former chairman of the board of Walmart and Thomas Stephenson, a former Ambassador and currently a partner in a Silicon Valley venture capital firm.
The Council’s plan – The Conservative Case for Carbon Dividends – calls for a carbon tax starting at $40 per ton that rises over time at a rate of 2% per year. All of the revenue would be returned to households as a quarterly dividend, and border adjustment tariffs would be applied to carbon-intensive imports from countries lacking an equivalent carbon-pricing mechanism. There would also be a rollback of EPA CO2 emissions regulations.
This is good news: Republican ownership of climate solutions is just what the non-partisan Citizens Climate Lobby (CCL) has been working for. The messenger is just as important as the message, and these respected Republican statesmen are the perfect messengers. You can go to the Climate Leadership Council web page and download the complete plan (https://www.clcouncil.org).
Even prior to the press conference presenting the plan, the Climate Leadership Council proposal was picked up by the New York Times and CNN. Also an op-ed from Shultz and Baker about the plan appeared in the Wall Street Journal. Other authors of the plan published an op-ed in the New York Times. A delegation from the Council went to the White House to brief presidential advisers about the plan. This plan also deserves support from Democrats and Independents since it reduces emissions and encourages movement away from fossil fuels.
However, there are several differences between the Conservative Case for Carbon Dividends and CCL’s Carbon Fee and Dividend Proposal as reported by CCL’s Dr. Danny Richter:
CCL’s proposal would apply to all greenhouse gasses from fossil fuels and GHG’s not found in nature (e.g. CFCs, HCFCs), whereas their proposal would only cover CO2.
CCL’s proposal begins lower ($15) and increases faster ($10 per ton per year) thereby having a greater impact on emissions.
CCL’s proposal would not repeal regulations.
CCL’s proposal would return a dividend monthly, not quarterly.
CCL’s proposal would not include any excess revenues from the border adjustment moving into the dividends. (We believe that would help keep the policy in line with the World Trade Organization requirements re tariffs.)
CCL’s dividend would be taxable, and be revenue-neutral.
CCL would return a half-share of the dividend to each child, up to 2 children per household.
In any event, the proposed plan is worthy of support from everyone and changes could be proposed during any Congressional legislative action.
Note: The material for this article was drawn from the CCL Community web pages and the CCL press release and blog.