Several leading conservatives, including senior economic and foreign policy advisers to Presidents Reagan, George H.W. Bush, and George W. Bush, have called for dramatic action on climate change. These conservatives call for a tax on carbon emissions, starting at $40 per ton, with the proceeds returned to Americans in the form of dividends.
Conservative Authorship of CLC Carbon Tax Proposal
The Climate Leadership Council (“CLC”) issued “The Conservative Case for Carbon Dividends” last week. The report’s authors, listed below, are mostly well known American conservatives:
- James A. Baker III (Secretary of State under President George H.W. Bush and Secretary of Treasury under President Reagan)
- Martin Feldstein (Chair, Council of Economic Advisers, under President Reagan)
- Ted Halstead (President of the CLC)
- N. Gregory Mankiw (Chair, Council of Economic Advisers, under President George W. Bush),
- Henry M. Paulson, Jr. (Secretary of Treasury under President George W. Bush)
- George P. Shultz (Secretary of State under President Reagan)
- Thomas Stephenson (Partner, Sequoia Capital)
- Rob Walton (former Chairman of the Board, Walmart)
CLC Report: Global Warming Risks Should Be Hedged
The report states that while the extent of human contribution to climate change can be argued, “the risks associated with future warming are too big and should be hedged. At least we need an insurance policy.”
Four Main Points of this “Insurance Policy”
- Tax on carbon dioxide emissions
- Phased in and starting at approximately $40 per ton
- Implemented at the refinery, or at the place where fossil fuels enter the economy, such as the mine, well, or port
- Proceeds from the tax returned in the form of dividends to all Americans
- The dividend program appears to have a slight re-distribution component, for example, children would count toward the dividends a family would receive.
- Larger carbon consumers would pay more than they would receive in dividends.
- Border carbon adjustments
- Imports from countries without comparable carbon programs would require carbon component fees.
- Exporters to countries without a program would receive rebates on carbon taxes paid, to avoid penalizing American exporters.
- Regulatory rollback
- Phase out or elimination of the current greenhouse gas regulatory scheme, including repeal of the Clean Power Plan
- Elimination of state tort liability for carbon emitters
In a future alert, I will give my thoughts on the implications of and prospects for this proposal.
For a copy of the CLC report click here.