A Free-Market Energy Blog

‘Sense of Congress’ Resolution on a Carbon Tax (parsing the argument)

By Robert Bradley Jr. -- July 10, 2018

“The last thing American families need is for our nation’s lawmakers to put our economy in reverse by enacting a national carbon tax.”

“A ‘carbon dividend’ is simply wealth redistribution by another name. And history is littered with the economic casualties wrought by heavy-handed government interference in the marketplace.”

Yesterday, a group of free-market, classical-liberal/libertarian, conservative groups sent a letter to The Honorable Paul Ryan (Speaker, U.S. House of Representatives) and The Honorable Kevin McCarthy (Majority Leader, U.S. House of Representatives) asking for consideration on H.Con.Res. 119, “express[ing] the sense of Congress that a carbon tax would be detrimental to American families and businesses and is not in the best interest of the United States.”

The letter follows (in red), with inserted comments by me.


A carbon tax is a policy with one definable goal: to raise the cost of traditional, reliable, affordable sources of energy.  This includes the domestically produced gasoline, diesel, coal, and natural gas that fuel our cars and trucks, power our homes, and keep our economy going strong every day. 

A carbon tax is a fossil-fuel levy, thus penalizing the 80-percent-plus market share of US energy today. With energy costs inherent in virtually all goods, higher costs will reduce profit margins (the few winners will be those firms engaged in low carbon energies and in energy conservation). Demand will go down for energy-using equipment, such as new cars, since the cost of driving goes up, other things the same.

While individual carbon tax proposals vary in their severity, numerous academic studies clearly show the harm that any carbon tax would inflict on our economy.  It is widely acknowledged, for example, that a $40 per ton carbon tax would increase the price consumers pay at the pump by about 38 cents per gallon. 

Resources for the Future has quantified the cost of a carbon tax for anyone to see, starting at $5 per metric ton and going to $50 per metric ton.

Notably, a much higher tax has been recommended to have its desired effect on climate. Joseph Stiglitz and Nicholas Stern have recommended a levy as high as $100 per metric ton tax by the year 2030. A $300 tax by 2050 has been quietly floated as well in Canada.

And a study commissioned by the National Association of Manufacturers found that a carbon tax could destroy anywhere from nearly 4 million to more than 20 million American jobs.

Despite recent attempts to market several carbon tax policy proposals as “conservative,” it is also important to note the striking similarities between those proposals and carbon tax legislation being pushed by liberal Members of Congress. The fundamental tenets – imposing a new economy-wide tax that would raise energy costs for virtually every American family, while ostensibly instituting a rebate scheme to redistribute the revenues in some fashion – are virtually identical.

Yes! The carbon tax crusade is championed by the most Progressive, radical fringe of the Democrat Party–as well as bought off fringe “conservatives”. There is nothing Republican, indeed, about a Malthusian/deep ecology/anti-industrial view of the world.

There is simply nothing conservative about implementing a massive new energy tax under which the federal government would be empowered to collect hundreds of billions more dollars each year from American taxpayers, and then entrusted to do the “right” thing – however that might be defined – with its vast newfound stream of revenue.  A “carbon dividend” is simply wealth redistribution by another name.  And history is littered with the economic casualties wrought by heavy-handed government interference in the marketplace.

Listen to environmentalist hero Bill McKibben on the rebate side of a carbon tax (emphasis added).

Carbon rebates also come with one obvious moral and intellectual flaw: most of the damage from both climate change and air pollution has fallen on poor people, people of color, and Native nations, both in our country and around our world. They need to be treated fairly in any rebate plan.

And any such rebates shouldn’t overlook the estimated nearly 12 million undocumented Americans who contribute to the economy — and cause far less than their proportional share of emissions. Environmental justice would mean a truly “fair” system compensated them for that history; it would also require policies to make sure that carbon pricing doesn’t perpetuate toxic “hot spots” in poor communities as companies look for least-cost ways to deal with the new reality.

Furthermore, environmental justice demands that carbon prices don’t create a windfall on other of forms of ecological or toxic energy production, such as mass incineration or mega-hydro dams.

Any rebate scheme will be VERY complicated!

Nor would a carbon tax represent any sort of “insurance policy” on climate change.  Contrary to proponents’ rhetoric, a nationwide carbon tax implemented across the United States would have no measurable impact on global climate. Even a climate policy that eliminated U.S. carbon dioxide emissions altogether would – according to accredited climate models used by U.S. government agencies – only impact global temperature by less than 0.2 degrees by the year 2100. And a carbon tax achieving a more modest 20 percent reduction in CO2 emissions would still wreak significant economic harm on our nation’s families and businesses, while impacting temperatures by an even less significant 0.02 degrees.

This is a very important paragraph. Carbon-tax proponents speak as if a carbon tax would act as a cure for the alleged problem of man-made climate change. But such a tax would not have any such effect. Unfortunately, RFF’s carbon-tax calculator does not translate the estimated reduced emissions into an (avoided) temperature and sea-level effect.

A calculator at the Cato Institute, however, estimates that if the US entirely eliminated CO2 emissions, the global temperature effect would be between one-tenth and two-tenths of a degree Fahrenheit by the year 2100. If all industrialized nations eliminated their CO2 emissions, the savings would be about three-tenths of one degree F by the year 2100.

Under your leadership, Congress has delivered major victories to the American people – perhaps none larger than the comprehensive tax reform that will lower the tax burdens of a projected 8 in 10 American households. The last thing American families need is for our nation’s lawmakers to put our economy in reverse by enacting a national carbon tax. We are heartened, too, that many Congressional Democrats have recently expressed their concern over the prospect of policies that could increase energy prices. Senate Minority Leader Schumer made clear several weeks ago that higher gas prices are “something we know disproportionately hurts middle and lower income people.”  The impact of a carbon tax on both gasoline and electricity prices would be swift, direct, and severe.

There is another problem that joins the regressive nature of a carbon tax that the letter does not state: the need for international tariffs (“border adjustments”) to prevent fossil-fuel activity to simply shift outside of the carbon-tax region (such as the US).

As we approach the 2018 midterm election, American voters deserve to know whether their elected Representatives support the implementation of a new tax on the energy they rely on every single day. Now is the time for Congress to make its voice heard on this important issue. 

Thank you for your consideration and your continued strong leadership in the House of Representatives.


Thomas J. Pyle, American Energy Alliance; Lisa B. Nelson, ALEC Action; Phil Kerpen, American Commitment; Myron Ebell, Competitive Enterprise Institute; Rick Manning, Americans for Limited Government; Harry Alford, National Black Chamber of Commerce; Grover Norquist, Americans for Tax Reform; David Williams, Taxpayers Protection Alliance; David T. Stevenson, Caesar Rodney Institute; Jason Pye, FreedomWorks; Tim Huelskamp, Ph.D., Heartland Institute; David Ridenour, National Center for Public Policy Research; Craig Richardson, E&E Legal; John Droz, Alliance for Wise Energy Decisions; Kathleen Sgamma, Western Energy Alliance; Calvin Beisner, Ph.D., Cornwall Alliance for the Stewardship of Creation; Craig D. Idso, Chairman, Ph.D., Center for the Study of Carbon Dioxide and Global Change; Jameson Taylor, Ph.D., Miss. Center for Public Policy; Becky Norton Dunlop, Secretary of Natural Resources for Virginia (1994-1998); Andrew Langer, Institute for Liberty


Leave a Reply