A Conservative Case for a Carbon Tax in the United States of America1

By Georges Alexandre (Alex) Lenferna

University of Kansas Philosophy Department NSF IGERT C-CHANGE Research Associate Email: alexlenferna@gmail.com

Thesis Statement: This paper argues that putting in place a carbon tax in the United States is a policy which adheres to conservative principles, and will also help to promote more equitable economic growth and can, relative to other climate legislation, tackle problems of social inequality, poverty and climate change among other societal problems hence why it has also been appreciated by democrats.

This paper will attempt to provide a comprehensive argument in support of the carbon tax, but will not neglect the shortcomings that such a policy might have. My aim is to provide an argument illustrating why when starting from conservative principles a carbon tax is the most sound policy choice in response to climate change. My first task will be to elucidate many of the potential benefits of a carbon tax, such as job creation, efficiency promotion and environmental protection, and then respond to some of the major objections that are voiced against it. While keeping in mind the potential shortcomings of a carbon tax, the paper will continuously explore why a carbon tax is better than its three major competing policies: environmental regulation of greenhouse gases (GHGs) through the EPA; government subsidies for clean energy; and neither of the above.2 Although these are not necessarily mutually exclusive policies, I aim to show why a carbon tax best adheres to conservative principles and why conservatives should support it as the dominant policy instrument aimed at effectively leveraging the economy towards a sustainable paradigm of growth. Following from that I will then go on to argue why significant opposition to a carbon tax exists within the US and why much of the opposition is morally suspect, after which I shall end with a discussion as to why it is of particular moral significance that the US takes on such an action.

1 2

Alternate title: A Republicans Guide to Shooting Yourself in the Foot with Climate Legislation I have not included cap-and-trade both, because there is great evidence to suggest a carbon tax works much more effectively and, mostly, because on a national level it seems that a cap-and-trade bill is simply a political nonstarter, especially following the major failure of the Waxman-Markey Bill which attempted to introduce such legislation. In the more poetic words of Jonathan Chait, no possible scenario, not even if John Boehner were ordered to pass a cap-and-trade bill by a returning Jesus Christ, bearing legislative text, could result in Congres ss passing a cap-and-trade law (2013).

The Political Context

For the sake of our children and our future, we must do more to combat climate change...I urge this Congress to pursue a bipartisan, market-based solution to climate change. But if Congress wont act soon to protect future generations, I will. I will direct my Cabinet to come up with executive actions we can take, now and in the future, to reduce pollution, prepare our communities for the consequences of climate change, and speed the transition to more sustainable sources of energy Barack Obama (2013)

The above quote from President Barack Obamas State of the Union address lays down a challenge to the US Congress, either they work together to come up with a market-based solution to climate change3, or President Obama uses his executive powers in order to address climate change, which involves expanding the powers of the Environmental Protection Agency to further regulate greenhouse gases under the Clean Air Act. Following up on his challenge Obama is currently pursuing the option of using the EPA to regulate greenhouse gas emissions (among other avenues4) because congress has so far failed to rise to Obamas challenge and put in place a market-based solution to climate change. For both conservatives and democrats alike, the continued inaction of congress should be seen as a mistake, for as this paper will argue, the market-based option, if pursued in the form of a carbon tax5, is the most effective way to bring about action on climate change in a form which is most beneficial (and least detrimental) to the US (and the rest of the world), and which not only adheres to conservative principles, but can also most efficiently bring a bring about a just transition to a more equitable, environmentally-benign and labour intensive paradigm of growth.

This paper agrees with the overwhelming scientific consensus that anthropogenic greenhouse gas emissions are causing devastating climate change. This scientific consensus and the details thereof (which this is not the place to get into) are outlined in detail in the Intergovernmental Panel on Climate Change Fourth Assessment Report (IPCC, 3 2013) among other places, and while the supposed debate rages on in many circles within the United States, I will take for granted, as the relevantly qualified global scientific community does, that consensus from those who are relevantly qualified on matters related to climate change is virtually unanimous. The controversy, as far as I can tell (being a former climate skeptic myself (Cf. Lenferna, 2011)) comes not from legitimate scientific concerns, but from a malignant fossil fuel industry funded disinformation campaign (Cf. Conway & Oreskes, 2010). What does remain uncertain is how far we will allow this crisis to grow and how devastating the effects thereof will be, not 3 that we are causing the problem, for that we know with virtual scientific certainty . 4 http://www.whitehouse.gov/sites/default/files/image/president27sclimateactionplan.pdf 5 A carbon tax is somewhat of a misnomer, for even though much of our worries around anthropogenic climate change revolve around our emissions of carbon dioxide, other greenhouse gasses are also important to consider. Thus under many proposed carbon taxes other greenhouse gasses such as methane and nitrous oxide are 5 included and measured according to their carbon dioxide equivalency , such that where carbon emissions are taxed per ton of carbon other greenhouse gasses can be taxed according to their relative global warming 5 potential . A carbon tax in the US would hopefully do likewise.

The Economics of a Carbon Tax

A carbon tax is a Pigovian tax which works by putting a price on carbon dioxide emissions and/or greenhouse gas equivalents. The aim is to internalize the costs that are now externalized by using the atmosphere as a free sink within which to pump our pollution. The costs of such emissions are referred to as the social cost of carbon6, referring to the fact that the costs of the emissions are not borne by the companies themselves, but rather by society at large. Thus a carbon tax aims to make companies pay for the costs that they are foisting upon society and which are not included in the way that we currently determine the price of goods and operations. Far from this being a radical distortion of the free market system as opponents of the tax often claim, such a tax corrects a distortion of our current system by attempting to make companies pay for the full price of their production and processes. Indeed by doing so a carbon tax adheres to a fundamental conservative and free market principle of ensuring that companies pay for their full costs, and are not subsidized by society at large through foisting the costs of their production upon society. As Brian Andrew (2008) points out, a perfect market is one where all parties bear the full costs and receive the full benefits of their production and consumption. Indeed, it is if for such reasons among others that major conservative economists, such as Art Laffer and Greg Mankiw, have supported such a tax (Cf. Ryan, 2013), while many carbon intensive industries, attempting to protect their perverse subsidy/privilege have attempted to fight it off.

The

economic

effects

of

increasing the prices of carbon intensive goods through

internalizing the social cost of carbon can partly be understood by way of a simple supply and demand analysis. As the graph

According to Ackerman (2010), in the United Kingdom, where carbon pricing and cost calculations have a longer, better-researched history, the latest estimates of the social costs of carbon is a range of $41 to $124 per ton of CO2, with a central case of $83. The U.S. administrations interagency working group that has been studying the SCC, however, has come up with a range of values, with a central estimate of $21 per ton of CO2. What this means, if we follow their estimates, is that only part of the cost of carbon will be added into the price, and this is problematic. However, many U.S. proposals for a carbon tax currently on the table, some of which I will explore later, aim to better factor in a carbon price closer to the true social costs of carbon, although determining the exact price of carbon is a complex, uncertain, methodologically-dependent and value-laden affair (Cf. Watkiss & Hope, 2011).

alongside illustrates internalising the costs leads to a higher price per unit for carbon intensive products, and thus leads to an upward shift along the demand curve, creating a higher price and smaller demand for carbon intensive goods. Through increasing the costs of carbon intensive products their less carbon intensive competitors become more competitive, as they will have less of a tax to bear depending on how much less carbon intensive they are. Thus depending on the short- and long-term elasticity of the respective market and the relative competitiveness of competitors to carbon intensive goods, including the cost of carbon into the price will lead to a shift away from carbon intensive goods. As Dieter Helm points out, when it comes to carbon, nobody particularly wants it. Demand for carbon is indirect (Helm, 2012, p. 179). Thus, for instance, in the energy sector such a tax would lead to a move towards more natural gas, wind and solar rather than coal, and in the agricultural sector it would involve a move away from more fossil fuel-intensive modes of production towards less carbon-, more labour-intensive (read: job-creating) modes of farming, many of which are already emerging or exist as cost-effective competitors.7 In Australia, for instance thanks to a carbon price wind energy is currently cheaper than coal despite the fact that it is a country with some of the worlds most abundant fossil fuel resources, thus illustrating the efficacy of putting a price on carbon (Paton, 2013). Furthermore, the carbon tax through setting a set price on carbon gives certainty as to the costs of climate legislation, and thus unlike uncertain wind subsidies or fluctuating prices caused by the uncertainties inherent in a cap-and-trade system, the carbon tax sends a clear price signal to the market, which will arguably unleash much needed nascent investment in the clean energy economy. Indeed, the world is moving towards a low-carbon renewable energy economy, and quite uncoincidentally most of the major economic leaders are also leaders in clean energy. According to the 2013 Global Climate Leadership Review, France, Japan, China, South Korea, Germany and the UK are leaders in clean energy on top of the low-carbon competitiveness index, while the US is ranked 11th (The Climate Institute, 2013). A carbon tax, through sending important and clear market signals can help the U.S. take the lead and remain competitive in the emerging low-carbon economy. Given that the National Renewable Energy Laboratory (Mai, Sandor, Wiser, & Schneider, 2012), claims that the United States can meet 80

Using Hotellings Model to understand demand, for instance, in the oil sector, an increase in price of oil caused by a carbon tax would lead to decreases in current output of oil and shifting of production to the future. That is because by not having priced oil properly we have over-allocated resources in the present relative to a production profile that aims to maximize gains (Cf. Dahl, 2004, p. 300) . Hotellings Model ignores ethical constraints and focuses solely on maximizing profit, but nonetheless on this barebones economic model we find that by including an SCC we push production to the future, which gives more time for the development of alternative sources of energy and production.

percent of its electricity needs in 2050 through renewable energy generation using just current (never mind future) technology, this represents great potential for growth and job creation.

Job Killer or Creator?

Policy designed for creating jobs is often a goal more associated with the left than conservative principles. Republican Congress members, however, are arguing against a carbon tax on the grounds that it will kill jobs. While job creation may not be a fundamental concern for conservatives, a policy that would reduce jobs in the United States would arguably not be a welcome outcome for conservatives. However, evidence points to the fact that the Republican opposition to carbon tax on the grounds of job loss is unfounded as a carbon tax can actually assist in creating jobs. Indeed implementing a carbon tax will create many more jobs in the long run than not doing so would. That is not to say that some jobs wont be lost in the transition to a clean economy, as just like in any economic transition or progress, some jobs will be gained while some will get lost, but overall if the carbon tax is implemented the gains in jobs will be significant, and so the Republican opposition on the grounds of job loss is a bit more than suspect. Allow me to expand. Consider, as Dan Hind (2012) points out, that the triumph of productivity has perverse consequences, insofar as the abundance of energy and mechanical labour provided by fossil fuels and associated technologies has made more and more people economically unnecessary, shifting them to the margins of our economy, while those who have access to the fruits of the fossil fuel revolution richly reap its rewards. Furthermore, as Huber (2009) argues, and as is evidenced by vast income disparities in the U.S. and the world over, by decisively shifting productive forces from human labour to machines, fossil fuels generalised the conditions for a class monopoly over the means of production thus reducing the amount of meaningful jobs available and creating great inequalities.8 Clean energy, however, when compared to fossil fuels, uses far more of its budget on hiring people and less on acquiring vast machines, supplies, land and energy itself (Cf. Pollin, Heintz, & Garrett-Peltier, 2009). More than simply not hurting jobs, much evidence shows that the transition spurred on by the carbon tax will help to create many more jobs than the fossil fuel industry does. Even in West Virginia (which has the highest dependence on coal in the country with the coal industry directly employing 3% and indirectly 9% (McIlmoil, Hansen, Boettner, & Miller, 2010)), comparative studies show that a developed renewable resources industry could provide far better fiscal returns to the county and state than coal

Cf. Wealth Inequality in America: http://www.youtube.com/watch?v=QPKKQnijnsM

presently does, while raising wages and expanding overall employment opportunity (Cf. Hansen, Collins, Hendryx, Boettner, & Hereford, 2008). According to Robertson (2010), the coal mining industry maintains 82,595 jobs nationwide, while the wider coal industry supports 174,000 permanent jobs nationwide, despite the fact that coal accounts for around 40% of energy production. On the other hand, conservative estimates for a transition to just 20 percent national power generation from wind shows 500,000 jobs created (Robertson, 2010). Already in 38 states and the District of Columbia, job growth in the clean energy economy outperformed total job growth between 1998 and 2007 (Pew Charitable Trusts, 2009). Just the currently underdeveloped solar industry currently employs more people than there are ranchers in Texas, actors in California and coal miners nationally (Spross, 2013). Indeed significant amounts of evidence show there is a great net gain in job creation through the switch to a clean economy, and the jobs gained, furthermore, are healthier and more environmentally benign. Pollin et al. (2009) found that for every $1 million invested in renewable energy as compared to the fossil fuel industry, more jobs would be created at more than a 3-1 margin. Indeed as the graph9 alongside only begins to reveal, a move towards a clean energy economy can help reverse trends towards the obsolescence of human capital, i.e. the transition will help create more jobs, and more ecologically friendly ones at that. Thus the slogan of green jobs and the clean economy is not a mere rhetorical political slogan, but is underpinned by the reality that the fossil fuel industry is based more on exploiting natural resources, while the clean economy is based more on the use of human capital. A carbon tax by shifting production and R&D towards a clean economy can help us to accrue such gains, and although there will be losses in the fossil fuel industry, overall jobs will increase substantially. Thus, as the Financial Times Editorial Board points out, the claim made by more than 85 Republican members of Congress that carbon taxes would kill millions more jobs has no evidence to support it (2013). As Joseph Schumpeter argues, the process of industrial mutation that incessantly revolutionizes the economic structure from within is one of the underpinning strengths of capitalism (in Gilding, 2013). Economies are not static entities, and thus protecting the fossil fuel industry by not implementing a
9

Created from data in Robertson (2010)

carbon tax would not only result in fewer jobs, it would be equivalent to protecting the telephone industry from the development of cell phones or the horse-and-cart industry from the development of cars, an unjustifiable form of protectionism preventing technological progress clearly against good conservative principles as well as broader job creation and pollution reduction. As conservatives are fond of pointing out, government shouldnt be in the job of picking winners and losers, but protecting the fossil fuel industry from the full costs of the production does just that with the losers being broader society and the environment. That is not to say that we shouldnt perhaps think about assisting those who might lose out as we transition to clean energy, as, for instance, a 2009 bill from Rep. Larson has.10 However, shielding the fossil fuel industry from the full costs of their production in order to save the limited jobs they create, which is less than would be created otherwise, is both bad for job creation and contrary to conservative principles of a free, fair, transparent and accountable market.

Shrinking Government, Reducing Taxes and Helping the Poor

I believe that any conservative who heard that a policy could shrink government, reduce taxes and help the poor, would be more than happy to support such a policy, all other things being equal. Well, a carbon tax when compared to its alternative, could do all of the above depending on how it is structured, and so, given that the alternative of EPA regulations is pretty much inevitable if a carbon tax is not put in place11, a carbon tax should be a conservatives cup of tea, so to speak. Firstly, if the U.S. is to go ahead with expanded EPA regulation of greenhouse gasses emission under the Clean Air Act instead of a carbon tax, then doing so involves expanding the EPAs reach to cover power stations and other stationary sources, which would involve creating the regulatory framework and enforcing the regulations at each and every source a contested process that is currently underway (Cf. Chait, 2013). That is certainly quite a substantial government feat, which would require substantial growth of the EPA i.e. government hardly a goal of most conservatives. Efforts to block the EPA, furthermore, will be stalling the inevitable as the Supreme Court has granted EPA authority to do so, and

10

Cf. http://www.carbontax.org/blogarchives/2009/03/06/new-larson-bill-raises-the-bar-for-congressionalclimate-action/ 11 To quote from the Citizens Climate Lobby: Efforts to block new EPA regulations are destined to be an exercise in futility amounting to little more than political grandstanding. Such legislation has no chance of moving in the Democrat-controlled Senate. Even if it passed in both chambers, the President would veto any such bill. Equally futile would be attempts to block CO2 regulations through the court system. In 2007, the Supreme Court ruled that the EPA has the authority and the obligation to regulate greenhouse gases that contribute to global climate change. And just last year, a three-judge panel from the U.S. Court of Appeals for the District of Columbia upheld a finding from EPA that greenhouse gas emissions endanger public health.

they will do so unless we accept Obamas challenge and implement a market-based solution like the carbon tax. A carbon tax, on the other hand, if implemented, would avoid the need for copious EPA greenhouse gas regulation, and could be levied upstream at the source of fossil fuels, at bottlenecks of production, and at the border, which would drastically reduce the need for government expansion, such that by collecting the tax from upstream fuel producers and a few big sources of CO2 the government would only have to charge thousands of businesses, not millions of Americans (Washington Post Editorial Board, 2013). The carbon tax would thus eliminate the need for the massive central planning and spending required to more broadly enforce the Clean Air Act. Indeed, according to an overwhelming majority of the IGM Experts Panel of economists, a carbon tax would be the least expensive way to reduce carbon-dioxide emissions (IGM Experts Panel, 2011). Furthermore, if a carbon tax becomes the predominant policy for dealing with climate change it could reduce the need for clean energy subsidies and its associated lobbying and rent-seeking. This is a potential gain, for as any good conservative will tell you, markets are neutral and look for the most efficient responses whereas governments pick winners and losers in subsidy choices, and sometimes they get it wrong and create lock-in to incumbent technologies and businesses, foreclosing opportunities to spur innovation (Cf. Hsu, 2011).12 Furthermore, as Dieter Helm points out, with subsidies not only do we often pick the wrong winners, but typically the better-off invest and get the subsidies, and the poor pay a disproportionate part of the bill (2012, p. 89). Thus a carbon tax can most effectively tackle climate change, reduce the size of government, and, if designed correctly, even assist the poor.

12

Subsidy removal, however, cannot be on sided, for if we remove subsidies to the clean energy industry they need to be accompanied by removal of the much larger subsidies to the American fossil fuel industry, which receives $502 Billion in subsidies annually through direct support to those industries, consumer rebates and avoided taxes on pollution (International Monetary Fund, 2013).

Source: Rausch and Reilly 2012 According to Handley (2013), the House Republican leadership has pledged to reject any climate measure that generates revenue for the government, this, however, still leaves political room for two different forms of carbon tax which do not increase government revenue. The first is revenue-neutral tax swaps and the second is a carbon fee and dividend. A revenue-neutral tax swap starts from one of the few uncontroversial conclusions of economics, that it is better to tax bads than goods (Financial Times Editorial Board, 2013). Realizing that, the aim is to move taxes away from goods, such as income and payrolls, towards bads such as pollution. A revenue neutral carbon tax-swap does just that, thus promoting the goods and not the bads. Some might worry that such tax-swaps would

disproportionately affect the poor. However, according to a study done by MIT, depending on how one structures such revenue-neutral tax swaps the carbon tax could actually be structured so as to reverse its potentially regressive nature and make it a progressive tax which helps the poor (Rausch & Reilly, 2012- see table below). Thus a revenue-neutral tax swap could reduce the size of government, reduce other taxes and be progressive and assist the poor, while tackling climate change all good conservative goals. 13 As the Congressional Budget Office has pointed out, many analyses point to the projection that a tax swap could actually lead to a net increase in output, albeit a less carbon intensive increase in output (Congressional Budget Office, 2013, p. 11).

13

CTCorp = Corporate Tax Swap; CTPersin = Personal Marginal Income Tax Rate Swap; CTPayroll = Payroll Tax Swap; CTTranser = Carbon tax revenue used to increase transfer payments e.g. social security, Medicaid, etc.

Likewise we could also protect the poor and middle class if we implement a carbon fee and dividend system, whereby the revenue gained from the carbon tax was not used to grow government revenue but was rather returned to citizens on an equal basis using existing revenue structures. If we return all revenue through a dividend, although the amount will vary between regions, a Resources for the Future study estimated that average households in the lowest two deciles may enjoy a consumer surplus gain of as much as 5.4 percent of income (in Texas) or of just 1.9 percent of income (in the Northeast) (Burtraw, Sweeney, & Walls, 2009, p. 2). Indeed as the report shows, those in the lowest two deciles nationally can receive average gains in welfare through dividends.14 Charles Kamanoff also calculated that a proposal being campaigned for by the Citizens Climate Lobby, involving 100% revenue returned, would see 2/3 of American households receive a net gain in income. Furthermore, according to the 2013 Congressional Budget Office report on the Effects of a Carbon Tax on the Economy and the Environment, offsetting the costs for households in the lowest one-fifth of the income distribution would take roughly 12 percent of the revenue raised by a carbon tax (Congressional Budget Office, 2013, p. 13). These calculations put paid to the oft posed objection that a carbon fee and dividend would devastate the poor of the U.S. Thus through using a carbon fee and dividend system it is possible to ensure both that government does not receive the revenue as Republicans have demanded, and that the poor and middles class are protected from the negative effects. 15

Exporting Production and Pollution

One of the major objections to national action on climate change is that by taking on climate legislation nationally we will not stop greenhouse globally, but simply export production out of the country. Indeed, not only are greenhouse gasses a global problem, but our economy is global too, such that generally countries who implement climate legislation are likely to see those companies move to a country with less stringent climate policies (Shaw, 2013). Thus measures like expanding EPA climate regulations, which focus only on national production, are bound to cause a certain amount of corporate
14

However, like the proposed Sustainable Energy Act does, I would recommend dedicating some of the revenue (or another source of government revenue) to infrastructure development and research and development for clean energy, such as the development of the smart grid, as development of such infrastructure which is required to spur support a clean economy, is a public good arguably outside of the purview and ability of private markets to deliver on. 15 For those who might object to the fact that the poor are being protected under this scheme, it is worth pointing out that the effects of climate change, and air pollution are visited disproportionately on the poor as much evidence suggests. Thus it seems only appropriate that the dividend should assist them such. A further case might exist for the dividend being distributed not only to the U.S., but to the rest of the world, seeing as the costs are visited not only upon U.S. society. However, given that there already exist certain (albeit insufficient) mechanisms for redress, and that it would be unlikely that such a proposal would pass muster, I believe that many would be happy at the thought that the U.S. is taking action.

flight from those countries. Indeed, the United Kingdom provides an important example of this, for through regionally focused climate policy they have reduced their regional emissions over the past decade. However, when it comes to looking at overall emissions, including those associated with the goods they consume, the UK has actually increased their emissions by 10% since 1993 by importing carbon intensive goods mostly from countries like China (House of Commons Committee on Energy and Climate Change, 2012). Indeed, about half the increase in Chinas CO2 emissions from 2002-2005 were linked to the export of goods to the US and EU (Wijkman & Rockstrom, 2012, p. 43). Thus, given that the US is already the largest importer of embedded emissions from China, it is argued that climate legislation would simply enhance that trend further. Such an objection, when levelled against EPA regulations or regional cap and trade, is a justifiable one, as such policies only focus on national emissions. However, this is where a carbon tax once again proves to be a more effective policy, as one of the carbon taxes complimentary policies, border taxing, can move us away from such limited regional action towards a more global and effective response to climate change, which protects the U.S. economy from competition from other countries that do not take on climate legislation. Allow me to explain. A border tax works by ensuring that products that are exported from the U.S. to countries that do not have a carbon price are granted carbon tax exemption, and are thus competitive in such countries. Goods that are imported into the United States are taxed according to their carbon content so that they do not have an unfair advantage in the U.S. over locally produced goods that were already subject to the carbon tax. Given that U.S. production is often more energy efficient than, for instance, Chinese production, a carbon tax with border taxing may actually help to promote U.S. products, and thus enhance US competitiveness. Further aiding the U.S. competitiveness, the revenue gained from the border taxes import tax could go to the U.S., which also provides major incentive to other countries to implement such a tax themselves in order to keep the revenue from such a tax, rather than see it go elsewhere. Thus, as Dieter Helm argues, a carbon tax coupled with border taxing is is a pragmatic mechanism for gradually translating bottom-up carbon taxes into an international agreement (2012, p. 192) or for muscling countries like China and India into climate action, a task the U.S. has long claimed it hopes to achieve. Although border taxing is a complex process and it will be difficult to gain exact precision, it is both a possible and integral element to ensuring the integrity and efficacy of climate legislation, for otherwise we will continue to shoot ourselves in the feet by exporting production to dirtier parts of the wold

through regionally limited legislation. In response some have argued that it would violate WTO regulation on fair competition. However, as world renowned WTO scholar Professor Joost Paulewyn shows, the WTO has exemptions for environmental considerations and border taxing should pass WTO scrutiny (Pauwelyn, 2012). Despite the fact that such a tax could pass WTO scrutiny my proposal would be that the revenue gained from the import taxes, and the import taxes alone, be directed towards a climate change fund such as the Green Climate Fund, otherwise such a proposal might be fought against on the grounds that it serves as a way for the US government to siphon off funds from the rest of the world. Even if my suggestion was put in place, a carbon tax coupled with border taxing still has the major benefits not only of protecting the U.S. from unfair competition and promoting broader international action on climate change, but also of reducing both carbon production and consumption, unlike the UKs policy did and the EPA would. Thus a carbon tax, unlike much other climate legislation, ensures that any climate gains are not rendered meaningless by carbon intensive imports. Thus for any conservative concerned about free market fairness, the carbon tax once again proves to be truer to it than EPA regulations could be, thus putting paid to the misleading argument put forward by Jay Timmons, the National Association of Manufacturers (NAM) President and CEO16, which said that a carbon tax will severely harm the U.S. ability to compete with other nations. If anything, by attempting to block a carbon tax the NAM is ensuring that EPA regulations will emerge which will indeed hinder U.S. competitiveness and damage meaningful action to tackle climate change by focusing only on national emissions and not on the global picture as carbon taxing can.

Morally Corrupt Opposition

Bertrand Russell once wrote about the American revolutionary Thomas Paine, "He had faults, like other men; but it was for his virtues that he was hated and successfully calumniated. Likewise with a carbon tax, the fossil fuel industry seems to recognize the virtues of such legislation will mean a move away from their perverse privilege/subsidy of being able to pollute the atmosphere freely. Thus much of the industry is doing anything in their means in order to protect their perverse privilege,

16

Cf. http://www.nam.org/Communications/Articles/2013/02/A-Carbon-Tax-Would-Wallop-Our-Economy.aspx

including fabricating disinformation, spreading lies, creating/funding biased and/or flawed studies17 and investing millions in dishonest lobbying. Worst of all they are masking their attempts in the name of conservative principles, whereas their campaign is actually a perversion of good conservative principles (or pretty much any set of principles that isnt solely based on protecting the fossil fuel industry bottomline). Thus Republicans in Congress who toe the industry line by opposing a carbon tax are rather hypocritically and arguably corruptly being untrue to conservative principles. Furthermore they are ignoring the core of democracy by ignoring the will of the people, for as Ryan Koronowski (2013) reports, according to polling, a revenue neutral carbon tax that would provide dividends back to taxpayers and invest in renewable energy received 70 percent support, and US voters favor a carbon tax over spending cuts by a 4-1 margin. 93 percent of Democrats favored a carbon tax, and 66 percent of Republicans did too. Thus according to my argument it seems that congressmen who oppose a carbon tax do not do so because they truly represent their constituency or for principled reasons; they do so most likely because they are either misinformed or corrupt and beholden to a small high-paying portion of their constituency, the fossil fuel industry.

Why the U.S.?

The question that many might ask when faced with the prospect of a U.S. carbon tax is, Why America?. This is indeed a very important question, which has many answers. Firstly, implementing such a policy in the United States may be the most effective single policy to tackle climate change, given the that the U.S. is the biggest historical emitter of greenhouse gas emissions, and one of the biggest current net and per capita greenhouse gas emitters, and arguably the center of world consumption. Even though China currently produces the highest amount of greenhouse gasses, the US currently imports the highest amount of Chinese goods than anywhere else and if the imported carbon was included in the U.S. emission count it would probably make the U.S. the highest net greenhouse gas emitter in the world. Indeed, the American populace consumes 25 percent of the worlds energy

17

Cf. The Institute for Energy Researchs (Murphy, 2013), the NAMs (Lavoie, 2013), American Institute for Petroleums (Mufson, 2012) and American Legislative Exchange Councils Koch -funded Beacon Hill Institute study.

despite representing just 5 percent of global population five times more than the average Chinese person and 160 times more than a Bangladeshi18 such that, if we take the projections of climate science seriously, the average American is responsible, through his or her greenhouse gas emissions, for the suffering and or deaths of one or two future people (Nolt, 2011). Furthermore, in order to feed the growing demand for energy the U.S. has been waging many inordinately expensive wars, both literal and metaphorical, on both the environment and humans across the globe. For those who think America is unfairly being targeted it is worth keeping in mind that other countries are already doing their bit and generally more than the US, as the table on the previous page shows. Furthermore even developing countries like China and South Africa are soon set to join the ranks of countries with a price on carbon, and even the worlds poorest countries are putting in place mitigation strategies to reduce their emissions (Cf. King, 2013). While many developed countries are meeting more ambitious climate targets, as the graph below from Bianco et al. (2013) shows, even if regulations under the EPA were expanded and states acted incredibly

ambitiously on climate change, which they arguably wont, the States still wouldnt meet its international climate change

goals, which are the lowest of all developed country goals and arguably much less than their fair share of world emission reductions.19 Similarly Burtraw et al. (2011) showed that new EPA regulations will at best reduce greenhouse gas emissions in 2020 by only 13%. Bianco et al. thus conclude that major climate legislation is needed in order to get us to those goals. Carbon tax legislation arguably can get us to meet U.S climate goals. According to John Millers analysis of EIA data, If the predictions that carbon taxes and reduced fossil fuels consumption will help expand the economy based on a substantial expansion of renewable energy supplies, energy efficiency technology improvements, and expanded green jobs is correct, then the $100/MT level of carbon taxes
18 19

(Biello, 2013), Cf. http://climateactiontracker.org/countries/usa.html?utm_&&&

energy policy should effectively achieve most of its claimed goals (2013). Furthermore analysis from Charlie Komanoff of the Carbon Tax Center study show that H.R. 1337 Americas Energy Security Trust Fund Act of 2009 which puts a steadily increasing price on carbon dioxide emissions, could achieve Americas target of an 80% reduction in CO2 emissions by 2050 (Robertson, 2010, p. 20). Even more than that what is important to remember is that these numbers focus only on carbon emissions from production in the U.S. and not carbon consumption from imports, which would also be reduced through the use of border taxing, thus carbon taxing would make even greater reductions on greenhouse gas emissions.
Furthermore, the question, Why America? is a question that sees a carbon tax as a burden, and while it may indeed be a short-term burden through rising prices on carbon-intensive goods and practices, as I have hopefully shown throughout this paper it is arguably less of a burden than alternative policies such as EPA regulation, which will be put in place if a carbon tax is not. Furthermore, in the long run it will be a policy which will have great benefits for us and our children that outweigh the short-term burdens. Given that we are often so willing to make sacrifices for our children and the future, this is arguably one of the short-term sacrifices we need to make, and arguably easily more justifiable than the sacrifices imposed upon the U.S. populace through the sequester. In the face of wartime the American populace was willing to work together to make sacrifices to shift the economy, and the moral imperative in the climate case is arguably even stronger, as climate change could halt and substantially reverse global progress on poverty reduction, and cause innumerable conflicts, suffering and environmental degradation among many other negative effects.20 As was the case when the U.S. ended slavery, it realized that even though slavery made certain activities profitable, those profits were not worth the exploitation involved. Similarly with regards to reigning in industrys ability to freely pollute the atmosphere, while certain industries remain profitable because of the perverse privilege/subsidy of foisting their costs onto society at large, it is time we realized that such exploitation is unacceptable. Doing so is moral and societal progress that has no political color to it. Whether you are a Republican, a Democrat, an Independent, a plain American, or a citizen of the world, ensuring that we have a liveable world with a thriving society and economy is a goal I like to think that we all share, rather than ensuring (through our obstinacy) that a massive relatively inefficient EPA regulative apparatus is put in place instead. Nonetheless, in asking the U.S. to make the smaller relative sacrifice of a carbon tax for the greater good, it is important to put that sacrifice into perspective, so I end with a quote from Carl Safina (N.d.):

20

http://hdr.undp.org/en/mediacentre/humandevelopmentreportpresskits/2013report/

Of all the psychopathology in the climate issue, the most counterproductive thought is that solving the problem will require sacrifice. As though our wastefulness of energy and money is not sacrifice. As though war built around oil is not sacrifice. As though losing polar bears, ice-dependent penguins, coral reefs, and thousands of other living companions is not sacrifice. As though withered cropland is not a sacrifice, or letting the fresh water of cities dry up as glacier-fed rivers shrink. As though risking seawater inundation and the displacement of hundreds of millions of coastal people is not a sacrificeand reckless risk. But dont tell me to own a more efficient car; that would be a sacrifice! We think we dont want to sacrifice, but sacrifice is exactly what were doing by perpetuating problems that only get worse; were sacrificing our money, and sacrificing what is big and permanent, to prolong what is small, temporary, and harmful. Were sacrificing animals, peace, and children to retain wastefulness while enriching those who disdain us. When we stop seeing our relationship with the whole living world as a matter of sustainability, and realize it is a matter of moralityof right and wrongwe might make the moment we need.

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