President Obama may be walking into a trap of his own side’s devising as he departs for the latest climate action summit in Paris. If Republicans can suppress their innate ability to snatch defeat from the jaws of victory, the summit’s outcome could hand the GOP an incredibly potent election-year weapon.
I’ll state up front that I believe that rising CO2 levels are largely the result of man-made processes, that this is warming the climate, and that it could lead to negative consequences down the road, albeit something short of the apocalyptic forecasts that many of climate-change warriors espouse.
I think the solution is for the U.S. to impose some form of a carbon tax, preferably in conjunction with other countries, done in a more or less revenue-neutral way. Even those who are of the opinion that climate change is a crock ought to agree that it could be a better way to raise revenue than having effective marginal tax rates above 50 percent on small businesses (as well as on low-income earners facing the steep phase out of various benefits) or taxing the returns to saving. Using a carbon tax to lower tax rates elsewhere would be an obvious pro-growth improvement on our current tax code, and with oil and natural gas being cheaper today than at almost any other time this century and the evidence suggesting low prices are in store for the foreseeable future, it’s an especially propitious time to make such a change.
Of course, doing so would not constitute an acceptable solution for the climate change crowd. The real debate to take place in Paris is not how to deal with climate change–it’s long since been decided that a comprehensive cap and trade regime is the only acceptable solution to this crowd. Rather, the central debate at hand is over how much of of the revenue raised in the U.S. and Western Europe from selling carbon credits should be handed over to India and the other developing nations as penance for our previous actions that have created the current predicament, and to get them to go along with the trading regime.
The amount of the transfer currently being bandied about is $100 billion per annum. There’s no longer much debate over the size of the bribe amongst the climate change community–just who pays what, how will it be used (the recipients insist on a very generous definition of “climate change mitigation” while the wealthy countries want to put strings on it) and when will it start.
If President Obama were to present this issue to Congress openly and tell them that our share of this tribute is $25 billion a year, it could hand Republicans the White House in an electoral season where the party seems determined to fritter it away. While a slight majority of Americans might tell a pollster they believe in climate change and can be persuaded to make some sort of sacrifice for it, the median amount they say they are willing to pay to stave off global warming is under $50. Even someone lacking proficiency in demagoguery could make this a winning issue.
Do the countries that industrialized decades ago owe money to the developing world for their impact on the environment? Not being a philosopher I’ll steer clear of that debate but good luck to the president who tries to sell that argument in the hinterlands.
Ike Brannon is president of Capital Policy Analytics, a consulting firm in Washington, D.C.
