Americans are interested in a radical carbon tax that would pay them $2,000 each year

Breaking the addiction.
Breaking the addiction.
Image: Reuters/Wolfgang Rattay
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A new poll of 2,000 representative US voters shows overwhelming support for action on climate change. Some 95% of Democrats and 65% of Republicans said yes when asked “Should the government take action on climate change?”

The survey was commissioned by the Climate Leadership Council, a Republican-led group that is promoting a radical carbon tax as a means to cut emissions, and conducted by an independent consultancy. The council’s plan would levy a carbon tax of about $40 per ton of carbon dioxide emitted, which would gradually increase over time. If the plan is implemented, the council’s modeling—which has been independently verified by the research group Resources for the Future—shows that the US could far exceed its commitments under the Paris climate accord.

The survey asked whether voters would support a carbon-tax plan that provides the revenue collected back as monthly checks. It found 56% were in favor of the idea and 26% opposed. When survey respondents were given options to use the revenue for other purposes, 38% wanted it back as a dividend to all Americans, 12% wanted to promote renewable energy like wind and solar, another 12% wanted to pay down the national debt, and 10% wanted to build out US infrastructure.

Economists of all stripes have long argued that implementing a carbon tax is the most cost-effective way to fight climate change. Without putting a price on carbon, they’ve argued, governments around the world have been subsidizing the use of fossil fuels. Many kinds of models show that bringing such a correction to the market would incentivize policies and technologies that curb greenhouse-gas emissions.

Globally, some form of carbon pricing has been adopted in at least 40 countries. The Dutch, for example, already pay as much as $60 per ton of carbon dioxide.

The trouble is that US politicians have found it easy to ignore economists. Only six Republican lawmakers voted against a recent resolution denouncing carbon taxes.

Ted Halstead, CEO of the Climate Leadership Council, wants to make a carbon tax political viable.“It’s easy to argue against a carbon tax, because it hurts the poor,” he says. “But returning the money to the American people as a dividend flips the argument.”

The carbon-tax plan was developed by James Baker and George Shultz, former secretaries of the US Treasury under Republican presidents, and it promises to give back as much as $2,000 each year to a family of four. The plan has been backed by former chairs of the US Federal Reserve, Janet Yellen and Ben Bernanke. It has broad corporate support from some of the largest oil companies, carmakers, insurance firms, solar companies, food giants, utilities, and environmental groups. In June, the council launched (paywall) a political-action committee (PAC) called Americans for Carbon Dividend looking to spend as much as $10 million on lobbying efforts.

The plan has its critics. Lee Wasserman and David Kaiser of the Rockefeller Family Fund wrote an op-ed in the New York Times warning readers to “beware of oil companies bearing gifts.” In return for levying a carbon tax, the plan requires repealing many environmental regulations and “would also make possible an end to federal and state tort liability for emitters.” Wasserman and Kaiser worry that it provides immunity to oil companies, which are increasingly being sued by individuals and governments alike for worsening the effects of climate change.

Halstead responded to the criticism by saying that the Climate Leadership Council has yet to publish its full plan, which will include details on how to deal with corporate liabilities. He confirmed that it won’t provide “blanket immunity” but it also won’t hold companies responsible for historical emissions. “The goal should be trying to solve the climate problem going forward, not getting tied up in litigations,” he says.