Is the Carbon Tax Seance Over? (A reality check for a trumped-up ‘conservative’ cause)
When asked if a carbon tax was preferable to EPA regulations on greenhouse gases, David Kreutzer, a research fellow with the Heritage Foundation who sat on yesterday’s panel, described the question as a trap.
It’s like asking me what’s the most humane way to execute innocent people …. When conservatives talk about a carbon tax, the headline says, “Conservative supports carbon tax,” So I’m not going to be drawn into this fantasy world where we speculate on what might happen when we know it won’t, when it gives people ammo to misrepresent what I said.
So no, a carbon tax is not preferable to EPA regulations.
- Evan Lehmann, “Conservatives Attack Each Other Over Carbon Tax Plans,” ClimateWire, July 18, 2013.
“[Ken] Green delighted his mostly conservative audience by comparing a carbon tax to a vampire who must be staked, beheaded and sprinkled over water — ‘preferably holy water’.”
- Jean Chemnick, “Panel Urges Conservatives to ‘Just Say No’ to Carbon Tax,” Energy & Environment Daily, July 18, 2013.
Last week, the Institute for Energy Research (IER) held a panel event in Washington, “A U.S. Carbon Tax: The Rest of the Story,” featuring four critics of such a levy:
Robert Murphy, Senior Economist, Institute for Energy Research
Ross McKitrick, Professor of Economics at the University of Guelph, Ontario;
Kenneth Green, Senior Director of Energy and Natural Resource Studies at the Fraser Institute; and
David Kreutzer, Research Fellow in Energy Economics and Climate Change, Heritage Foundation.
I moderated the panel for IER (I am founder and CEO of the organization). My comments attempted to put the current tax debate in perspective:
Today’s debate is the third try for a major energy tax related to the issue of climate change. The first was the Clinton BTU tax debate, which died in 1993 after several years of debate. (Note: The BTU tax began as a carbon tax and got quite polluted in the real world).
The second energy/climate tax debate was the federal cap-and-trade legislation that died in 2007. Try three for a climate tax has one major difference from the first two: It has far less political support and prospects than the earlier two from the White House to Congress to Wall Street to Main Street.
But if it be said that we are beating a dead horse today, there is a séance going on to bring a carbon tax to life. And it is one particular piece of that debate that we will challenge today on theoretical and empirical grounds: That a carbon tax can somehow be nonpolitical—and it can produce economic benefits on its own.
You have heard about a carbon tax being a “win-win”—a “double dividend” for both the environment and the economy…. A tax on “bads” rather than “goods.
Now, we do know by simple math that a unilateral U.S. carbon tax will not have a discernible effect on global climate. As one pundit put it, nature will not notice a U.S. carbon tax. [Chip Knappenberger has calculated that a tenth of a degree of anthropogenic warming would be avoided 50 or 100 years out—if you believe the high-sensitivity climate models.]
But the economy will notice a carbon tax—and everyone in the economy as producers and consumers. A carbon tax is an energy tax since more than 80 percent of American energy today is carbon-based.
We had a packed room and a large Internet audience. And the panelists did not disappoint.
Bob Murphy exposed the social cost of carbon as subjective and varying–and even as positive rather than negative as climate alarmists/activists are determined to portray. (His testimony the next day before a Senate subcommittee elaborated on his points.)
Ross McKitrick explained how the tax interaction effect did not make a carbon tax a trade for taxing ‘goods’. Ken Green explained how the idea of a revenue neutral, nonpolitical tax was fantasy–and how he came to reject a theoretical CO2 levy with such realization.
And Kruetzer, as the lead quotation above made clear, was not going to be party to any dialogue for a carbon tax being preferable to anything…. Bravo! Also in question & answer, Ken Green made his views on the carbon tax very clear. But how the media tried and tried to get a crack to show that there was “conservative” support for a carbon tax, even asking Green in a private conversation the same question and getting a ”might.”
See, conservatives are “fighting” over a carbon tax, right? … Not really….
R Street/ E&EI Pushback
Basically, two “conservative” groups are getting a lot of ink (and big bucks) for their support for a carbon tax to somehow get Republican politicians to go along. One is R Street, the breakaway group from the Heartland Institute. The other is Energy and Enterprise Initiative, founded by discredited former (ousted) Republican congressman Bob Inglis of South Carolina (he lost 27%-73%) . As IER president Tom Pyle stated to a reporter after the event:
“I feel like they’ve been given an exorbitant amount of weight in terms of their voice in the conservative movement by the media,” Pyle said after the event. “So there’s this perception that there’s a groundswell of conservative support for a carbon tax, and it’s just not true. It’s the same couple, few people that keep popping up in the same articles,” he added.
Following up on the two groups, E&E News quoted Andrew Moylan of R Street as urging a “Republican” strategy of embracing a carbon tax as an alternative to Obama’s “expensive and opaque regulatory regime.”
Alex Bozmoski of the Energy and Enterprise Initiative complained about the IER panel’s approach: “Their [anti-carbon-tax] plan is just to fight having a plan.” In double-speak that would make any propagandist feel in company, Bozmoski added:
Honestly, that’s not where conservative Americans stand. Washington will catch up to the silent majority. I think there will be a courageous batch of conservative leaders who are remembered as the ones that positioned American free enterprise to deliver an answer to climate change.
No, government planning should be frontally challenged with the solid intellectual case that there should be no government plan with the climate as with the economy itself. And no, “conservative Americans” are not interested in a major new qualitative tax, period.
A carbon tax is problematic in theory and application. It is a political nonstarter. It is a feeder lane on the road to climate serfdom. And as a result of IER’s conference, it now has less of a place to hide.