Form of Carbon Tax:
Impose a fee on carbon, and use the revenue for
deficit reduction and to fund carbon-saving activity
such as public transport, renewable
energy, and a better long-distance power grid. Often,
they go so far as to say that some of the money should
go to ends completely unrelated to climate change,
just a laundry list of things the left would spend a
- The right will never,
ever buy into this, because
it grows the government. And with the advent of
Uber-type transport based on self-driving cars,
it's not clear that traditional public transport
will be the most desirable way to organize our
- Also, there will be inflation in the price of
energy-intensive goods and services due to the
carbon tax, and poor people will have difficulty
making ends meet.
- To eventually meet the desired reductions in
carbon emissions a decade or two down the line,
the tax will have to grow to several dollars per
gallon of gasoline (several hundred dollars per
ton of CO2). It would be impossible to pass such
a high tax as the first step, even if Democrats
had a filibuster-proof majority in congress. It
needs to start low and gradually be raised.
If, when the tax is introduced at much
lower levels, the money is not returned to citizens,
people will view it as a burden and there will never
be a political constituency behind eventually raising
it sufficiently for it to achieve the desired
reduction in emissions.
||Conservative Form of Carbon Tax:
Impose a fee on carbon, and have the
government return all the money to the public in tax
cuts, thus avoiding growth of the public sector. Revenue Neutral
- Ideally, it should be a federal carbon fee, and
there is no federal sales tax, so it can't be
returned in a sales tax cut. The cuts would
have to be to corporate or income taxes.
- The bottom 50% of the population pay almost no
income tax, so they would get practically no tax
relief, yet they would face higher energy costs
without any help meeting those costs. So this
effort would be a massive redistribution of wealth
from the poor to the rich, which the left would
never cooperate with. And it is just generally
politically infeasible to impose a scheme which
would result in such a major hardship for such a
large share of the voters.
Former Fed Chairs
Alan Greenspan & Paul Volcker
Rep Francis Rooney R-FL
Former Secretary of State, Secretary of Treasury George Shultz
|Carbon Fee and Dividend:
Impose a fee on carbon, and have the
government return the money equally
everybody in the form of a monthly dividend immediately, before the
politicians can get their grubby fingers on it. Revenue neutral.
Some Details of the Carbon
Fee and Dividend:
- Unlawful residents would be negatively impacted,
since they would face higher energy costs yet not
receive the dividend. However, by the same
argument, social security, medicare, medicaid, and
unemployment insurance should all be discontinued,
since unlawful residents pay taxes that support
those programs and don't receive the benefits. It is virtually impossible to
run any kind of decent society without
sometimes negatively impacting unlawful
residents. That's just a basic,
unavoidable fact of reality.
Current Action on Carbon Fee
- The carbon fee should be imposed at the
wellhead, or when fuel is imported.
- The dividend payments should be frequent,
perhaps monthly, because poor people who really
need the dividend to make ends meet in the face of
higher energy costs often can't wait a year for
- The fee should also be imposed on gases released
into the atmosphere as a side effect of
production, and it shouldn't just be a simple fee
on carbon, since some chemicals are more potent
greenhouse gases. So a severe fee should be
imposed on methane that is leaked into the
atmosphere without being burned in natural gas
drilling, since methane is much more potent than
CO2 as a green house gas.
- Duties (called border adjustments) should be
imposed on goods imported from countries that
aren't imposing similar carbon fees, to protect
American producers from unfair competition from
goods imported from countries that don't have such
fees. This gives other countries an incentive to
impose their own carbon fees, so they get the
money rather than our government getting the
money. This avoids the need for grandiose
international treaties that are nearly impossible
to get together and even harder to enforce.
- In practice, most voters would be getting more
money back in the dividend than they would be
paying in higher energy costs, so they would come
out ahead, which would create a political
constituency to keep raising the fee until it is
high enough to motivate the desired reductions in
- The incentives provided by the carbon fee will
render a lot of legislation redundant and
unnecessary, so that regulations can be
moving decision making from bureaucracy and courts
to more efficient and optimal market-based
- The Energy
Innovation and Carbon Dividend Act
is a bill in the federal house of
representatives. Initially sponsored in the
last session by several Republicans and numerous
Democrats, it was re-sponsored in the current
session, and as of March 27, 2019 is co-sponsored
by a Republican and 25 Democrats, and gaining 2 or 3
more representatives every week.
- The Climate
Leadership Council is a Republican
group with a plan very, very similar to the
EICDA, except that they don't have a bill in
congress, and their version exempts the fossil
fuel industry for legal liability for any fraud
they may have perpetrated by telling the public
that climate change is not real while internal
documents showed that they knew this wasn't the
case. The EICDA does not have
this exemption -- it leaves open the possibility
of legal action against fossil fuel companies.
- The idea of a carbon fee and dividend as the
right approach to solving climate change is
The endorsements above are for the
general concept of a carbon fee and dividend, and not
specifically the EICDA
or the Climate Leadership
Council's proposal. There are
other endorsements and editorials
supporting the idea.
- all living ex-Fed chairs
- 27 Nobel Laureate economists
- 15 former chairs of the Council of Economic
- 2 former treasury secretaries
- and 3508 other US economists.
Alexandria Ocasio-Cortez D-NY
Climate Scientist Michael Mann
The Sunrise Movement
Supporters in the House
|Far-Left Solution: AOC's "Green New Deal"
- Radically expand the size of the
- Have the government dictate exactly
which technologies will be employed in every
- Have byzantine, detailed regulations
describing every energy-consuming activity to be
undertaken by anyone.
- Abundant talk of
that have nothing
whatsoever to do with
Note that a jobs guarantee has been implemented at
a full scale nowhere in the world.
- health care reform
- wage stagnation
- strengthening trade unions
- income inequality
- indigenous peoples
- the disabled
- education, including higher education
- a job guarantee at a wage much higher than
current minimum wage
- "economic security" - whatever that means
Text of resolution.
Most supporters of the GND (Green New Deal) are under
the mistaken impression that it's all about climate
change, when nothing could be further from the truth.
It contains basically everything AOC would do if she
were appointed queen.
A poll was done by Yale which basically asked people
like to solve climate change and create jobs in the
process?" with no mention of who
was behind it or the many environmentally irrelevant
far-left items in the plan. This
fraudulent poll is widely cited
as evidence for bipartisan support for
Alexandria Ocasio-Cortez's GND.
The Republican senate majority leader Mitch McConnel
tried to force the senate to vote on the GND, which
was very shrewd, because it would
put the senate Democrats,
several of whom are presidential hopefuls, into a no-win
situation. If they voted against it,
they would be smeared
as "climate deniers"; if they went on record as
voting for it,
then by 2020 the Republicans could
make sure that everyone
knew how it was chock full of far-left insanity and their
vote would be an embarrassment to them. The senate
Democrats evaded the trap in two ways -- first, they
unanimously voted for a measure that was
not the Green New Deal, and
then, when the Green New Deal came up, most of them
abstaining from voting,
except for a few who voted against it, and with 100%
Republican opposition, the
bill failed 0-57.
- Will scare the living daylights out of
conservatives, and cause them to doubt the
sincerity of the motives of the climate
scientists, feeding climate skepticism.
- Many Democrats are endorsing this plan without
examining the details. Conservatives
certain to make sure the public knows all about those
details by 2020, which will be a major embarrassment
to the many Democrats endorsing the GND now.
- In practice, putting such a large share of the
economy into the public sector has been tried in
many countries, with large costs in lost
productivity, corruption, mass starvation, and
horrific human rights violations.
- If you want to craft legislation to solve a problem,
you should start out with a narrow, focused
bill that does nothing other than
address the problem and add things to it only to lure
in reluctant constituencies. This bill starts out
ridiculously broad, shamelessly pandering to every
far-left constituency imaginable. And those
aren't the constituencies that are
reluctant to dealing with global warming
Rep. Matt Gaetz R-FL
|Republican Green Real Deal:
Asserts that global warming is
a serious problem warranting action.
Text of Resolution
Speaks about encouraging invetment, but utterly vage about
exactly how the desired investment
is to be encouraged.
Advocates nuclear energy and carbon
capture & sequestration,
which the AOC/Sunrise Green New Deal does not.
Most of the actions advocated are in the form of
deregulation and tax cuts.
In contrast to the Green New Deal, it is actually
entirely focused on climate change.
- Lacks credibility in that it fails to mention
any means whatsoever of discouraging
people from burning as much
fossil fuel as they want.
||Cap and Trade:
Issue "carbon credits" to factories, or to
countries, or auction them off to the highest bidder, where
a carbon credit is permission to emit a certain amount of
greenhouse gases. This has been tried many times with
varying success. Over time, the total amount of credits
is reduced as emitters clean up their act.
Sometimes the carbon credits are issued to polluters (be
they factories, or countries) according to how much they
were emitting before the scheme began.
If an emitter is able to reduce emissions, they may
surplus of carbon credits that
they can sell to make money. If
an emitter increases emissions, they need to find someone
that they can buy credits from. So everyone has an
incentive to reduce emissions.
There have been cases where companies go bankrupt and
shut their doors, but keep alive a shell company to receive
their carbon credits, which they then sell.
John McCain had cap and trade as part of his campaign
platform when he ran for president in 2008.
If the carbon credits are just arbitrarily given to
companies, they become an arbitrary windfall and
reward for past bad behavior. If they are auctioned
off by the government, that can just amount to an
tax funding the growth of the public sector.
Most observers today agree that a carbon fee or tax is
a better approach than cap and trade.
- It is hard to predict the future demand for carbon
credits, and thus hard to predict their future price,
which makes it difficult for emitters to
- The scheme is hard to tweak right, and can completely
fail. Europe has a cap and trade scheme which basically
failed -- emissions turned out to be lower than expected,
and the price of a carbon credit dropped so low that it
failed to provide the desired incentive. And a scheme
can fail in the opposite direction, where the price of
a carbon credit rises so high that it strangles the
There is a lot to be discussed in terms of technical
details, but we are going to be mostly doing that
in our lectures, discussions, and presentations, not
on this website.
In the lectures we will be talking extensively about
the science of climate change and engineering and
economics of various solutions.