Cross-posted from The Breakthrough Blog
Three weeks before the Senate is scheduled to vote on global warming legislation, presidential candidates John McCain and Hilary Clinton have both called for temporarily suspending the 18-cent gasoline tax. The proposal is anathema to anyone who is pushing for disincentives on dirty energy. But instead of just railing against political pandering, we should take this as an opportunity to rethink our politics. The big question is: how do we finance the transition to a clean energy economy?
The Center for Climate Progess’s Joe Romm answers that a carbon price is not enough. Environmentalists often look to Europe - and its $38 per ton carbon dioxide price - as the gold standard of climate legislation. But Romm warns that the U.S. lacks the political will to reach that high of a carbon price anytime soon. What’s more, the New York Times reported last week that Europe has been experiencing a surge in new coal plant construction, despite its high carbon price.
Romm’s solution is an immediate moratorium on the construction of new coal plants while we wait for the carbon price to render coal economically irrelevant. But a moratorium on coal would increase energy prices - a tough sell politically during a recession. So how do we motivate people to pay more?
The traditional environmental response is to emphasize the gravity of global warming. If people just understood how serious the problem was, the thinking goes, then they would support price increases that went towards solving it. But opinion research suggests that an approach based on simply educating the public may not garner support for price increases. A 20-year poll by Gallup showed that public concern about global warming hasn’t changed much, despite the popularity of films like Al Gore’s An Inconvenient Truth. And an ABC News/Time/Stanford poll from 2006 that asked voters whether they would support a gasoline tax to convince people to drive less found that 68 percent opposed the measure.
A carbon tax does not have to be framed as a way to change behavior; in this week’s Breakthrough Interview, Monica Prasad advocates for a very high carbon tax that funds clean energy. The caveat is that all the revenue generated go toward clean energy, and not to any of the special interests vying for a piece of the pie. The point of the carbon tax is to make itself go out of existence, so it would be counterproductive for interest groups to be lobbying to keep the cash flowing.
Breakthrough believes the price for carbon should be high enough to make low-cost technologies like wind immediately viable, while raising sufficient funding for clean energy (e.g. $30-$80 billion/year). A much higher price for carbon could potentially raise more money for clean energy, and bring down the coal hegemony faster. But at a time when voter anxiety about the economy is rising, legislation focused centrally on raising energy prices to deal with global warming is bound to be a hard sell.
Given the circumstances, what’s the best strategy to transition to a clean energy economy as quickly as possible?
Our answer is that we need to stop framing public policy as a response to global warming apocalypse. Instead, we should start talking about how to create a new clean energy economy that also addresses voters’ concerns about energy prices, jobs, and national security. When the gas tax is reframed as a funding mechanism for clean energy, voter support increases. Asked in the same survey as above whether they would support a gas tax that would fund renewable energy research, 64 percent of voters approved. The lesson: making clean energy cheap is much more popular politically than making dirty energy expensive.
Making clean energy actually - not just relatively - cheaper than dirty energy is a solution that deals with global warming not only in the U.S., but also in China, where emissions surpassed our own last year. We could shut down every coal plant in the U.S., but there is little reason to believe that China would follow our example. Only when the real, unsubsidized cost of clean energy drops below that of coal will the developing world abandon its coal plants. Until then, we can hardly begrudge them for using the cheapest energy possible to pull their people out of poverty.
There is a lot that Romm, Prasad, and Breakthrough agree on. We’re concerned about people looking to the carbon price as a panacea, we’re concerned about an environmental politics that is vulnerable to slumps in the economy, and most of all, we’re concerned about how to foment a global transition to a clean energy economy as quickly as possible. These are complicated issues, and a lot of open questions remain. We’d like to hash things out with our readers - regulation, taxation, and investment can all play a role, but what would you put at the center of your strategy?
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There are a couple of additional questions I’d like to offer in response to your very thorough assessment of the gas-tax situation: First, in addition to ensuring that whatever gas tax policy we settle on facilitates a rapid transition to clean energy sources, how do we protect those Americans who are low-income or living on the margins of society and whose very security is crippled by rising energy costs (unlike the mass of affluent Americans who moan about rising gas prices but fail to reduce their consumption despite having access to alternatives)? Moreover, how would we as a movement distinguish between our efforts to safeguard people who are legitimately at risk in this scenario from the mainstream conservative rhetoric that clean energy is too expensive for the average American? Part of the answer, I’d think, relies on telling a compelling and accurate story to the country about who controls our energy resources - i.e. raging monomaniacal capitalists, in many cases - and thus who is messing with our lives by robbing us of our dollars and our ecological health simultaneously. This type of educational and community empowerment approach relates to my second question: How do we push for a moratorium on fossil fuel energy development and a switch to zero-emission sources while also sending a message that cheap clean energy is in itself not a panacea for our environmental crisis? If the society as a whole simply replaces coal with wind and solar to fuel the production-consumption machine that is our global economy, we will never derail the path of rapid resource depletion, toxic pollution, and exploitation of those without political and economic power under the current paradigm.
Any ideas?
I have noticed that cheap energy is often discounted in some of the discussions. It is good to see a post that reminds us that cheap energy is important to global development and that continued (or increased) poverty is not a viable solution to the carbon problem.
John A. Warden III, a leading US expert in strategy made this interesing post about: Thinking Strategically About Global Climate Change. I found it provocative and am interested in what your readers think about his idea of creating a Future state for the Global Climate before embarking on a lot of tactical solutions to solve percieved problems.
Once again, I think this is a good example of how we need to stop talking so much about what we’re against, and need to talk more about what we’re for. People are unwilling to support a tax against dirty energy, but supportive of a tax for clean energy.
Katherine -
At the Breakthrough Institute we share your concern for low-income communities who would be hit much harder by an energy tax. We advocate for an earned income tax credit, as well as a new social contract to help more people attain economic security. But at the same time, it’s important to avoid creating a constituency that wants to keep dirty energy taxes in place. As taxation expert Monica Prasad argues in our interview with her this week, “The role of the carbon tax is to make itself go out of existence.”
I think the way we distinguish ourselves from conservatives who would argue that clean energy is too expensive is by making it about getting clean energy cheap. If we frame a tax as an investment in protecting energy costs in the long term — rather than a punishment for using dirty energy — I think we’ll see much more support.
Simply return the tax equally to all tax filers. This makes it less regressive since higher income people use more fossil fuels and since it is all returned to taxpayers, it should not lead to greater and often wasteful government spending.
My dictionary says a tax is to fund government. This then would not be a tax, but rather an assessment against carbon pollution to be returned to those bearing the cost of the pollution. The carbon tax should increases each year replacing fossil energy with cheaper renewable energy. It would not be expensive as wind and thermal solar are already close to being cost competitive with coal generated electricity. It is transparent and would due much to decrease useage, either through conservation or more energy efficient products..