The Bold Conservative Push for a Carbon Tax and Dividend

What would you say if I told you that there is a high-profile group of Republicans that are working diligently to create a global carbon tax and dividend plan? You might think I was full of beans, right? Enter Ted Halstead, an author and policy entrepreneur who is one of the major conservative thought leaders on reversing global warming. In 2016 Ted founded the Climate Leadership Council (CLC), which is a group of conservative business and economic celebrities with household names. They created what Halstead calls a conservative pathway forward to deal with climate change.

Photo By Glenn Fay

The CLC includes heavyweight political leaders such as James Baker, III, Martin Feldstein, George Schultz, N. Gregory Mankiw, Henry Paulson, Jr., and Rob Walton. This group authored “The Conservative Case For Carbon Dividends” also known as the Baker-Schultz Plan, which is a plan for a market-based solution for change that includes a carbon tax. What is the essence of the Baker-Shultz Plan? They propose to significantly reduce carbon dioxide going into the atmosphere by facilitating an international carbon fee that would be levied on those who are putting carbon into the air and, get this, return the money to us, the citizens as a dividend.

The fine print of the Baker-Shultz Plan includes a gradually rising carbon tax to account for the social and environmental costs of burning fossil fuels. A portion of the money raised would be returned directly to citizens as a monthly or annual dividend. The third part of the plan would simplify and roll back regulations in favor of a market-driven business environment. The regulation roll-back rationale is that the tax would regulate carbon emissions better than regulations do since enforcement creates layers of bureaucracy. The fourth part of the plan is what Halstead calls a climate domino effect, providing a new strategy to reach a global price on carbon. Imports would be taxed based on their carbon content, thereby driving down carbon pollution worldwide. The CLC sees the carbon dividend plan as a popular, populist, pro-growth, pro-business plan that would shrink government and help the working class.

At first glance, neither conservatives or liberals like this proposal. Some conservatives dislike it because it supports a tax on fossil fuel businesses and it is global. Liberals don’t like it because the proposal aims to deregulate business and let market forces take over. Given the probability that Republicans might not like it and Democrats might not like it, why is does it make sense? To answer that question we need to look it the plan through a both/and or win-win lens. Instead of using the old either/or approach and judging it either as a good idea or a bad idea, which ultimately ends in stalemate, are we able to see the mutual benefit to all sides?

What if the answer to the plan is both yes and no? No we don’t like some parts of it but yes we like other parts. And what is the overarching goal that both conservatives and liberals want and really need to achieve? If the devastating perils of climate change are corrected then humanity avoids the suffering that will be unavoidable if we don’t curb global emissions immediately.

Make no mistake, we may not like the idea of more taxes, especially those who have internalized this as a core value. And the impact of deregulation might not be very palatable to some. But honestly, if we can stop global warming, is it possible we might agree with Ted Halstead, who said that carbon has a hidden social and environmental cost that nobody pays for right now? And could most of us agree with Halstead’s point that people who pollute more should get penalized and those who pollute less should get a financial dividend each year? I sure wouldn’t mind getting a carbon dividend check!

Looking again at the Baker-Schultz plan, if we take an either/or position and either favor or reject the plan, it has little chance of getting off the ground. But using a both/and approach allows us to keep the discussion alive and negotiate finer points with the possibility of keeping the world a more hospitable place for humans in the future.

If you look at the plan as a black and white decision, that is, either you do support it or you reject it we might have less of a chance of finding a solution and progress. If we were to take a hard line position and say absolutely no to carbon taxes, ever, then we have sealed our fate. In that case, neither of us gets anything of what we want, or what we need. We can’t afford to shut off the possibility of solving what most reasonable Americans believe is going to impact every aspect of our lives. Halstead and many others strongly believe global warming may be our most serious problem for now and in the future for millennia to come. It may surprise you to learn that businesses are warming up to the plan.

Even though some fossil fuel companies have been slow to take action toward supporting renewable energy that might compete with their business, a number of companies have expressed interest in the Baker-Schultz carbon tax and dividend plan, including Exxon-Mobil, BP, Johnson & Johnson, Exelon, GM, Shell, Pepsi, MetLife, and Unilever. Halstead admits that there is a gap between the Republican base and Republican leadership on climate change. As of this writing over 20 College Republican groups publicly support a national climate solution, including Students For Carbon Dividends, along with some College Democrats groups and other Environmental groups. Ted Halstead believes taking a concrete role against climate change would make economic sense and empower the Republican party to do something about climate change.

Of course, in today’s political climate, anyone who sticks his or her neck out risks getting their head chopped off and the Baker-Schultz Plan is no exception. And some of the harsher criticism comes from the right. As we will find out later, moving forward with solutions is imperative, and any bipartisan solution will demand that we find common ground and compromise, instead of living with continued dysfunctional stalemate. Why would conservatives like the members of the CLC take on an issue like climate change, when it is traditionally unpopular with conservatives? The best person to answer that question is the conservative Evangelical Christian climatologist Katharine Hayhoe. We will explore her ideas in the next post!

Author of Vermont’s Ebenezer Allen: Patriot, Commando and Emancipator by Arcadia/The History Press, University of Vermont EdD.

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