Welcome to the Carbon Tax Ticker
Half of the U.S. is frozen solid right now, but debate in the world of the carbon tax is only getting hotter. For the high brow set, the most interesting development of the month was the publishing of the so-called Economists’ Statement on Carbon Dividends in the Wall Street Journal. Below you’ll find IER’s answer. On the legislative front, the 116th Congress is in session and we’ve already seen our first bill of the year, the re-booting of Reps. Ted Deutch and Francis Rooney’s lame duck lob with a new cadre of co-sponsors. Scroll to the bottom of this email to see how IER’s sister organization, the American Energy Alliance, responded.
Also in this email:
- A look at what the left has to say about carbon taxes
- A report from the Wednesday Meeting
- A carbon tax explainer for industry
Prestige isn’t policy.
Institute for Energy Research, 18 January 2019:
We live in strange times indeed when an environmental reporter for the New York Times writes that we should stop pushing for a carbon tax, just a few weeks before dozens of distinguished economists sign a letter to the Wall Street Journal calling for a carbon tax. Yet despite the prestige behind the impressive list of signers, the economists mislead the American public on several key points.
Specifically, there is quite open hostility on the progressive Left to merely a carbon tax—for example as is spelled out in the “Green New Deal” that has attracted so much attention.
Institute for Energy Research, 31 January 2019:
There is a reason the U.S. economy is so heavily reliant upon carbon-intensive fuels in its energy and transportation sectors: They are very reliable and convenient, given all the realities of our current situation. Yes, a new carbon tax, if draconian enough, could ultimately force households and businesses to sharply curtail their emissions. But doing so, especially quickly, would come at a huge cost in Americans’ standard of living.
Now if those concerned about climate change want to argue that the benefits outweigh the costs, they can do so. But they should make their case plainly, rather than trying to trick Americans into thinking that they can save the planet while making some extra spending money on the side. That argument is utterly deceptive, which the WSJ letter signers would be quick to point out if, say, Trump Administration officials tried to use a similar trick regarding tariffs.
Who actually thinks this could happen? Clearly no one on the left wants it to.
American Energy Alliance, 30 January 2019:
The policy du jour within the center-right and neoliberal ivory towers is the carbon tax. Economics brand names like Janet Yellen, Richard Thaler, and Larry Summers took to the pages of the Wall Street Journal recently to inform us that a carbon tax of their design can be a bipartisan winner in these factious times.
The so-called “Economists’ Statement” is a five-pillar proposal that they think will transcend the partisan divide by taxing carbon-based fuels while simultaneously mitigating the well-known regressive effect of energy taxes with a “dividend” and removing burdensome, top-down regulations. The economic flaws with a tax-and-dividend arrangement are documented extensively in the October 2018 study, “The Carbon Tax: Analysis of Six Potential Scenarios.”
But promises of regulatory relief do not stand up to scrutiny either. The problem is that no one to Yellen, Thaler, and Summers’ political left agrees that regulatory red tape should be cut.
Not as simple as the experts say.
Shale Magazine, 23 January 2019:
The National Climate Assessment is the latest in a series of reports that has thrust climate change into the public spotlight—and added to the intensity of calls for a carbon tax. This brief article will illustrate first the arguments put forth by advocates for the carbon tax and then explain a couple of reasons among the many for which my organization, the Institute for Energy Research (IER), steadfastly opposes such calls.
Instead of handcuffing our capacity for productive growth, our best path forward may simply be enriching ourselves as much as possible to prepare for any vagaries of climate we may face. Our species is the most adaptable the world has ever seen. Through free markets and wealth maximization we will put ourselves into the best position to manage threats of all kinds. The case for a carbon tax is not of the open-and-shut variety. Global warming may be a problem as we move further into the 21st century, but that alone does not provide terra firma to tax the energy sources that power our prosperity.
From the funnier, cooler, hipper version of IER.
Washington Examiner, 29 January 2019;
President Trump’s former energy transition chief, Tom Pyle, is donning the vest of France’s protest movement in launching a campaign against the bipartisan carbon tax legislation introduced in the House last week.
Pyle’s group, the American Energy Alliance, is shipping Rep. Francis Rooney of Florida, the sole Republican on the bill, a yellow vest. In accompanying letter to be sent Tuesday obtained by John, Pyle wrote that the vest represents “solidarity with our French brethren who have protested expensive climate policies.” The populist protest movement in France is known as the “Gilets Jaunes” for their yellow vests.
And a hat tip to ATR.
On January 23, James Lucier of Capital Alpha Partners and I discussed the IER-commissioned study, “The Carbon Tax: Analysis of Six Potential Scenarios,” in a lunch sit-down session following the Wednesday Meeting at Americans for Tax Reform. Also on hand was Jim Karahalios of the Canadian organization Axe the Carbon Tax, who delivered a riveting account of the carbon tax imbroglio north of the border.
Follow this link to view a one-pager and/or download the study in full.