Wednesday, 14 November 2012

Why Conservatives Should Support a Carbon Tax, Part III: They'll Blame You for Going Over the Fiscal Cliff

Did I not correctly predict that Republicans would find themselves disappointed on the morning of November 7? I have another conditional prediction: that if we go over the fiscal cliff, conservative Republicans will be blamed for it more than the President, and more than Democrats.

I've been eager to sell the carbon tax in the form of a revenue-neutral tax swap -- reduce personal and corporate income taxes, and reduce payroll taxes, and pay for them with a carbon tax. $30 per ton will get you about $150 billion in at least the first few years of a carbon tax (after that, revenues may go down if people substitute away from CO2 emissions -- we should hope they do, indicating that emissions are going down!). For fiscal cliff-avoiding purposes, that's not much, but it's something. As part of a larger package of budget cuts, entitlement reform (yes, let me be on the record with my view -- entitlement reform including Medicare should be on the table), tax reform, and unavoidably, new revenues, a carbon tax must be a piece of the puzzle. It will almost certainly be the least obnoxious piece, of all the pieces that will be negotiated. It will be the most transparent piece, being a very obvious price and a very trackable paper trail. It will be the only piece that accomplishes the side benefit of addressing -- partially -- the most dangerous environmental problem the world has ever faced.

So Bill McKibben will blame you for Hurricane Sandy. That won't be fair. And Harry Reid will blame you if the country goes over the fiscal cliff. That won't be fair, either, in my view, since neither Democrats nor Republicans have yet to part with their sacred cows. But if I take away one thing from this election cycle, it is that most Americans really don't like the Tea Party, believe that the Tea Party is steadfastly opposed to anything resembling compromise, and that the Tea Party strongly influences the Republican Party. And so if we go over the cliff, you conservatives are going to get blamed. Cry me a river.

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