You Can’t Beat Something With Nothing

By D.R. Tucker
Back in March 1998, at a Republican fundraiser in New Hampshire, former Congressman and Vice Presidential candidate the late Jack Kemp declared, “It isn’t enough to be against [Democrats]…It is not enough that we tell people [the things] to which we are opposed. We have a moral, social, political responsibility to outline, particularly in the eyes of those young people, what we are for.”

It’s been nearly six years since Kemp passed away, but his words are still
relevant, especially in light of a potential problem for the Republican Party
heading into the 2016 election.

Last month, Bloomberg Businessweek reported, “Most moderate Republicans — 62 percent — understand that global warming is happening, according to a poll this month from the Yale Project on Climate Change Communication, which conducts research on American public opinion. An even higher percentage of Republicans said they support carbon dioxide as a climate pollutant. Sixty-two percent of moderate Republicans agreed to strict limits on emissions from coal-fired power plants”–i.e., the approach favored by Democrats.

Certainly, Republican leaders have repeatedly asserted that Democratic efforts to reduce carbon emissions would imperil the economy…but that’s only half the conversation. What’s the Republican plan to reduce emissions? Would such a plan stimulate economic growth?

Reporter Suzanne Goldenberg of the UK Guardian recently asked several Republican Senators about their plans to address this issue. Only three GOP Senators responded: Susan Collins of Maine, Lamar Alexander of Tennessee and Lisa Murkowski of Alaska. Goldenberg noted that Collins, Alexander and Murkowski “…suggested a range of measures from building more nuclear power stations, promoting energy efficiency, and encouraging investment in technological research…[N]one of the Republicans backed Barack Obama’s plan to cut carbon pollution from power plants.”

If Collins, Alexander and Murkowski are mindful of Kemp’s advice, they will go
beyond these suggestions and propose a dramatically different path towards
reducing carbon emissions, one that would entail the least amount of
government interference in the economy in accord with their stated principles.

Last year, Wall Street Journal columnist Holman W. Jenkins Jr. laid out such a path. While continuing to suggest that the case for action against human-caused climate change is overstated by liberals, Jenkins nevertheless noted: “A straight-up, revenue-neutral carbon tax [i.e., one offset by dramatic cuts in federal corporate and personal income taxes] clearly is our first‐best policy, rewarding an infinite and unpredictable variety of innovations by which humans would satisfy their energy needs while releasing less carbon into the atmosphere.”

The wisdom of such a policy is that it does not require Republicans to concede
the argument about human-caused climate change, and in fact would allow
Republicans to achieve the longstanding goal of scaling back America’s
Byzantine federal tax structure. Reducing federal corporate and income taxes
and increasing taxes on carbon emissions would lead to an imminent reduction
in those emissions by individuals and corporations, thus reducing the average
American’s overall tax burden and ultimately forcing limitations on
Washington’s size and power.

Such a plan should resonate with the owners of both large and small businesses: they would, in effect, prosper economically by becoming more energy-efficient and reducing their overall carbon footprint. By conserving power, these businesses will lower the amount of money they spend on energy, freeing up financial resources to invest in other crucial areas. These businesses would also earn the coveted title of good corporate citizens; they would gain credibility–and thus, a marketing advantage–in the public mind, by sending a message that they take both the economic and physical environments seriously.

As veteran conservative economist Irwin Stelzer noted in the Weekly Standard last year,

“To those who blanch at the thought of any tax, not least a carbon tax, I ask: What is your plan when it becomes clear that we can’t finance an adequate military from current revenues? Worried about Chinese expansion at the expense of America’s allies? A resurgent Russia that has its eyes on the territory of some of our NATO allies? Beefing up our southern borders so that we can proceed with immigration reform without triggering a new wave of illegal entry? Larger deficits? Then you will need money. Would you prefer higher income taxes? Increased wealth taxes? Or a tax that merely incorporates the social cost of carbon consumption into its price, so that the polluter pays and consumers see real prices when they decide between consuming and abstaining from consumption of carbon-heavy products?”

Arthur Laffer, a former economic advisor to President Ronald Reagan, has also called for a federal revenue-neutral carbon tax despite the fact that he professes not to know if human-caused climate change is real. In a 2008 New York Times op-ed, Laffer asserted:

“We need to impose a tax on the thing we want less of (carbon dioxide) and reduce taxes on the things we want more of (income and jobs). A carbon tax would attach the national security and environmental costs to carbon-based fuels like oil, causing the market to recognize the price of these negative externalities.

“Nuclear power plants would then compete with coal-fired plants. Wind and solar power would have a shot against natural gas. Trains would compete with trucks. We would clean the air, create wealth and jobs through a new technology boom and drastically improve our national security.

“The market-driven innovation that brought us the Internet and the personal computer could quickly bring us new, cleaner fuels. A carbon tax that was fully offset (with payroll or income taxes cut by a dollar amount equal to the revenues generated by the new tax) would be as bold as the threat that we face.

“Conservatives do not have to agree that humans are causing climate change to recognize a sensible energy solution. All we need to assume is that burning less fossil fuels would be a good thing. Based on the current scientific consensus and the potential environmental benefits, it’s prudent to do what we can to reduce global carbon emissions. When you add the national security concerns, reducing our reliance on fossil fuels becomes a no-brainer.

“Yet the costs of reducing carbon emissions are not trivial. Climate change may be a serious problem, but a higher overall tax rate would devastate the long-term [economic] growth of America and the world.

“It is essential, therefore, that any taxes on carbon emissions be accompanied by equal, pro-growth tax cuts. A carbon tax that isn’t accompanied by a reduction in other taxes is a nonstarter. Fiscal conservatives would gladly trade a carbon tax for a reduction in payroll or income taxes, but we can’t go along with an overall tax increase.”
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For these reasons, it’s clear that by passing legislation that would simultaneously reduce corporate and personal income taxes while implementing a carbon tax, the Republican Party would protect both the economic and physical environment–as well as their own political environment.

In a 2008 open letter to his grandchildren, Kemp wrote, “My advice for you all is to understand that unity for our nation doesn’t require uniformity or unanimity; it does require putting the good of our people ahead of what’s good for mere political or personal advantage.” Republicans have a chance to prove that both of these goals can actually be accomplished at the same time.

D. R. Tucker is the operator of the Massachusetts-based blog The Urban Right (theurbanright.blogspot.com). He is also a freelance writer whose articles have appeared in the Boston Herald, ClimateCrocks.com, FrumForum.com, HumanEvents.com, RedMassGroup.com and TheNextRight.com. In addition, he hosted The Notes on Blog Talk Radio (http://blogtalkradio.com/drtucker) from August 2009 to June 2010.