Welcome to the Carbon Tax Ticker

September, with its annual United Nations powwow, has become the hottest month of the year for showing off one’s global warming activist bona fides. In addition to the media frenzy surrounding teenagers cutting class (I’m not sure the term “strike” really applies here), Democratic presidential nominee hopefuls expelled copious volumes of hot air on their barely distinguishable climate change platforms during the hours-long events hosted by both CNN and MSNBC.

The T-Word…
CNBC, September 20, 2019 article:

Several Democratic candidates this week emphasized plans to take aggressive action on climate change during MSNBC’s two-day climate forum at Georgetown University, vowing to funnel trillions of dollars towards renewable energy and impose a carbon tax on corporations.

The MSNBC forum is the second major climate-focused discussion with some of the 2020 candidates this month, following a seven-hour CNN town hall in September. Placing a tax or fee on carbon dioxide pollution has long been a controversial proposal, but it’s recently come to the forefront of discussions of candidate’s climate proposals.

Carbon pricing has drawn intense opposition in Washington by those who argue that it’s essentially an energy tax that would make energy bills, gas and flying more expensive.

IER’s Take

CNBC has this rear-end backwards. What’s been interesting about the Democrats’ climate change discussions hasn’t been the embrace of the carbon tax, but rather the nearly universal reluctance to center their climate change responses around it. As Pete Buttigieg remarked, “I know that you’re not supposed use the T-word in politics.”

Only three of the Democrats genuinely trumpet the carbon tax: Buttigieg, Andrew Yang, and John Delaney. But these three darlings of the millennials and the neoliberal set are far from likely to carry the Democratic banner come next year.

Based on what we’ve seen this month, I think it’s clear that the central Democrat view is that carbon taxes remain politically toxic.

Muh crumbling roads and bridges…
The Office of Rep. Brian Fitzpatrick, September 26, 2019 press release:

Representative Brian Fitzpatrick (PA-01) was joined by Representatives Salud Carbajal (CA-24), Francis Rooney (FL-19), and Scott Peters (CA-52) to introduce the MARKET CHOICE Act. This legislation seeks to combat climate change through the elimination of the gas tax, and the implementation of a fee on carbon emissions, the revenue from which would provide funding for infrastructure development and enhancement.

“We are at a crossroads with regard to infrastructure and climate change,” said Fitzpatrick. “Legislative action taken—or not taken— by this Congress on these issues will be felt for generations. With the American public overwhelmingly seeking fixes to our crumbling roads and bridges while searching for solutions to mitigate the dangerous effects of climate change, our bipartisan bill is a dynamic solution that seeks to tackle both problems. It doesn’t have to be a tough choice.”

IER’s Take
Brian Fitzpatrick and company have re-upped the (so-called) Market Choice Act—the bill that helped bump Carlos Curbelo from his South Florida seat in last year’s midterms.

Here’s my full statement from last July.

And here’s the tl;dr version: The bill would place a $24 tax on the production of fossil fuels. It would rise each year by 2 percent and allocate proceeds to the Highway Trust Fund. One reason to reject the bill, even on its own terms, is that while costing each American a load of money it would reduce U.S. emissions by only an additional 10 percent from the current trajectory, according to favorable estimates.

The Market Choice Act would harm Americans with only the most nebulous justification while also introducing potentially wasteful federal spending. This bill, with its high economic costs and minuscule benefits, does not represent evidence-based policy and Congress should summarily reject it.

Oh, Canada…
The Brian Lehrer Show on WNYC, September 30, 2019 radio interview:

Kathryn Harrison, professor of political science at the University of British Columbia in Vancouver, explains Canada’s carbon tax and how it differs from other countries’ carbon taxes.

IER’s Take

With refreshingly honesty carbon tax advocate Kathryn Harrison explains how Canada’s federal government has burdened citizens in the Great White North. “We tend to think of this as a market-based solution because it does take advantage of the innovation and efficiency of markets,” she said. “But it’s also very much government intervening and correcting markets.”

“The interesting with carbon taxes,” Harrison explained, “is the price increase tends to be more noticeable than when the same environmental objectives are accomplished by regulation or emissions trading; [regulation or emissions trading] may actually cost people more in terms of higher prices, but they don’t connect the dots between the price increase and the public policy.”

With that in mind, is it any wonder that most Democrats here in the States want nothing to do with the carbon tax label?

Here’s another nugget from Harrison:

“Subsidy programs tend to be very popular with voters and that’s why we’re hearing about it in this election, but they also tend to be a relatively expensive way to get emissions reductions because a lot of the money goes to people who are doing what they would already have done. In the case of things like electric vehicles it’s going to relatively wealthy people who can afford to buy electric vehicles.”

Reminder: Earlier in 2019, Canada’s federal carbon tax started at $20 (Canadian) per tonne and will increase annually to $50 per tonne in 2022.

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