Carrots and Sticks

Yesterday, a climate-change denier was confirmed to head the EPA. This comes as Trump and the Republicans gut environmental regulations, including those preventing coal companies from dumping toxic waste into our rivers and streams.

Nevertheless, hope springs eternal.

In the midst of the crazy that is the Trump Administration–in the face of Congressional Republicans’ stubborn denial of science and evidence in general and climate change in particular, three prominent conservatives-Martin S. Feldstein, Ted Halstead and N. Gregory Mankiw– have issued “A Conservative Case for Climate Action.” They explained their plan in an op-ed in the New York Times.

CRAZY as it may sound, this is the perfect time to enact a sensible policy to address the dangerous threat of climate change. Before you call us nuts, hear us out.

The three are forthright about the fact that Republican congressional opposition prevented Obama from addressing climate change as vigorously as he wanted; he was only able to enact a handful of measures through Executive Orders, and those are likely to be reversed by Trump, who (they say with delicious understatement) “seems much less concerned about the risks of climate change, and more worried about how excessive regulation impedes economic growth and depresses living standards.”

They note that

an ideal climate policy would reduce carbon emissions, limit regulatory intrusion, promote economic growth, help working-class Americans and prove durable when the political winds change.

Hard to argue with any of those goals.

After listing a number of other notable Republicans who participated in authoring their proposal, they proceed to outline it.

Our plan is built on four pillars.

First, the federal government would impose a gradually increasing tax on carbon dioxide emissions. It might begin at $40 per ton and increase steadily. This tax would send a powerful signal to businesses and consumers to reduce their carbon footprints.

Second, the proceeds would be returned to the American people on an equal basis via quarterly dividend checks. With a carbon tax of $40 per ton, a family of four would receive about $2,000 in the first year. As the tax rate rose over time to further reduce emissions, so would the dividend payments.

Third, American companies exporting to countries without comparable carbon pricing would receive rebates on the carbon taxes they’ve paid on those products, while imports from such countries would face fees on the carbon content of their products. This would protect American competitiveness and punish free-riding by other nations, encouraging them to adopt their own carbon pricing.

Finally, regulations made unnecessary by the carbon tax would be eliminated, including an outright repeal of the Clean Power Plan.

The authors assert that a carbon dividends program starting at $40 per ton would achieve nearly twice the emissions reductions of all Obama-era climate regulations combined. They also report that, if all four elements are put in place at the same time, the plan would be sufficient, all by itself, to meet America’s commitment under the Paris climate agreement.

Environmentalists should like the long-overdue commitment to carbon pricing. Growth advocates should embrace the reduced regulation and increased policy certainty, which would encourage long-term investments, especially in clean technologies. Libertarians should applaud a plan premised on getting the incentives right and government out of the way. Populists should welcome the distributive impact.

The appeal of this plan is obvious: as the authors note, simply repealing Obama’s measures would be immensely unpopular; unlike Congressional “deniers,” most Americans accept the reality of climate change and support measures to address it.

Recent polls show that 64 percent of Americans are concerned about climate change, 71 percent want America to remain in the Paris agreement, and an even larger share favor clean energy. If the Republican Party fails to exercise leadership on our climate challenge, they risk a return to heavy-handed regulation when Democrats return to power.

If the goal is to reduce carbon emissions–and that is the goal among people who accept the reality of climate change–Republicans and Democrats who share that goal should embrace any proposal that will demonstrably achieve it.

If carrots will do what sticks cannot, I’m all for carrots.


  1. Sorry for not getting all excited and cheerful over these three Republican Congressmen’s proposal. The Republican Senate just put a man in charge of the EPA who wants to dismantle it, and the Indiana Legislature is in the process of doing away with homeowner solar power.

    Look at what they do, not at what they say.

  2. I watched Rachel Maddow’s report last night on this highly questionable EPA appointment and have a question of my own. Why did the Democrats wait until less than 24 hours before the scheduled confirmation vote to demand those E-mails and letters?

    I might also ask if the Senate Hearings have been a Democratic “carrot” for the benefit of the general public to convince us they are doing more than being actors on the stage,”…full of sound and fury, signifying nothing.”? Their actions have come to no positive results; the rallies, marches and protests by the public have accomplished more than the entire Democratic faction sitting in Congress.

    The Democratic dogs bark but Trump’s Republican caravan moves on.

  3. The Democrats have been working through the court system to try to get those communications for *ages.* Pruitt was refusing to comply with FOIA because, well, he didn’t wanna. The court finally said, “yeah, you actually have to follow the law, and if you don’t release the information by Tuesday, you’re in contempt.” So the Republicans made sure that his confirmation vote happened before Tuesday. He will still have to release the information on Tuesday and there can still be whatever political and legal consequences (he could still be prosecuted for illegal actions, for example).

  4. Common sense and truth aren’t confined or restricted to political stripes. The driving force behind pollution is profits, mainly because our economists don’t adequately impose a cost on pollution. The carbon tax captures this rather well.

    While I like the idea of a carbon tax with a dividend, I also would like to see the cost of pollution more properly measured in terms of infant mortality, lung diseases for elderly and young, cancer treatments, etc.

    For instance, in Southern Indiana, there are three known super polluters. Most states only have one.

    Does this result in abnormal cases of cancer and other breathing problems? How much do Americans spend on treating this preventable diseases?

    Indiana refuses to measure the data because they know researchers will use it against them. The Indiana Medical Association is also beginning to grow a conscience due to advocacy by a few members linking mercury to high infant mortality rates. I believe the World Health Association calls these “subsidies” very expensive, yet in 2017, they are still not passed along to those who pollute. It’s why gas is so cheap in this country. 😉

  5. The proposal sounds wonderful. However, I imagine the Koch money and other coal and oil executives will fight it to the full extent possible. They want free range to make money no matter what the cost to our environment, to human beings and to wildlife. They have the power and the funds to fight anything that might keep them in check. They finally took over the EPA with Pruitt and will destroy that agency as quickly as possible.

  6. What is not addressed in their list is the obvious giant in the room. Corporate polluters have always found a way to game the system, legally and illegally, with the complicity of employees who are either unethical, intimidated, afraid of job loss or worse.
    Who will enforce the new policy? Pruitt will not as he has clearly demonstrated. The Koch brothers have managed to get the fox put in charge of the chickens. His emails will very likely confirm their ham-handed influence. There will be underfunded and understaffed enforcement or a mockery of self-regulation (think Big Banks) and then false remorse for failed policy when people start to get sick and die, in greater numbers than now.
    Read up on what goes on in the chemical industry in Louisiana. Oklahoma, West Virginia, Tennessee, North Carolina, Michigan, Montana, California, Alaska and most recently Texas (160,000 gals. of diesel spilled) have been the scenes of major failures by industry to manage their products and waste.
    It is enough to make you sick.

  7. Todd, a speaker from England who was attending a town hall here in Indianapolis mentioned the fact that “petrol” was around $10, not sure if he meant gal. or liter. No matter, our prices are really cheap by comparison.

  8. The question I put to every denier I converse with about climate change is this: Why must the conclusions reached by the majority of climate scientists be wrong? (Yes, sometimes it’s so bad I have to say, “Let’s assume, for the sake of argument, that the consensus is real…”). The answer I get pretty much comes down to the fact that they didn’t like the messenger. If Newt Gingrich had made “An Inconvenient Truth” we wouldn’t be having an argument over climate policy today.

  9. Professor, you just used the “t” word. I don’t see any Republican Congress embracing a tax of any kind on business. I’m pretty sure that business is not at all worried about regulation now. They have four years in which they will have free rein to do whatever they want without fear of any consequences.

  10. The good news is that even a Republican Congress and an EPA director who are against the EPA won’t necessarily have the last word. There remains our last hope – the judiciary – and I expect to see tons of lawsuits in the works when the Congress finally decides to poison us with either their outright repeal of the act establishing the EPA or limitations imposed on its powers while keeping the toothless act in place under the pretense that we have an environmental act in place. My guess is that Republicans will not get rid of the EPA altogether but remove its teeth because it is anti-business and unnecessary and based upon supposition rather than hard data and other such Wall Street propaganda.
    I note in passing that McConnell knows how to speed up a confirmation hearing when his candidate is required by a trial court’s order that the candidate show up with emails pursuant to a discovery order which would incriminate such candidate’s fitness for the office of the EPA; an energetic push for confirmation he did not have in holding up Obama’s candidate for the Supreme Court for a year. Can you spell craven politician?
    Off the topic, my daughter emails me this morning that David Frum and Malcom Nance (a retired intelligence officer) are predicting that “something big is about to happen.” Given their probable access to intelligence leakers, I am in suspense in trying to guess what it is that is so “big” with thoughts ranging from proof that Trump and his cabal had wholesale conversations with Russian intelligence and had a deal that they help him win and he would reduce sanctions imposed by the previous administration (as Professor Robert Kuttner posits in The American Prospect, my favorite political magazine and one he co-edits) to a Bannon imposition of martial law due to the refugee and immigration crises (since fear-mongering is a necessary prelude to dictatorial seizure of all power). Perhaps it will be neither of these extremes but rather some executive effort to enlist the aid of the National Guard to roundup immigrants or Kushner’s latest sale of brand in Russia, China or Iran. I anxiously await.

  11. Gerald,

    It wasn’t just OUR intelligence community listening in and taping those phone calls to Russia. European and East European countries have spies too.

    Meanwhile, Trump is in Florida for a “campaign” rally that will, I predict, be another dose of hate, intolerance, and crazy for his not so bright followers. They can’t seem to get enough of it.

  12. I can’t imagine our Fake President, Donald Trump, will go along with this scheme. It’s hard to believe he’s aware there is such a thing as a climate.

  13. A metaphor (fwiw): The Congress just confirmed putting a Pit Bull in charge of the Feline Protective Agency.

  14. The science is clear but there are two rate questions that are unanswerable presently. At what rate will the entire world stop making the consequences of Anthropogenic Global Warming worse everyday by continuing to dump fuel waste into our single atmosphere? At what rate will nature respond to AGW making the consequences worse through “positive feedbacks”? Those, like avalanches, are natural cascading effects caused by our initial warming.

    If we could foresee those with some certainty we could better understand the specific financial impact on future tax payers and individuals from fuel users today.

    Then of course we would have to figure out politics to give those future us’s voice in our actions.

    This proposal doesn’t do that. We enjoy today, they pay whenever the certain to come bills for the consequences come due.

    However if it reduces the bills that our indecision today puts on them, it’s at least something responsible we can claim credit for.

  15. From the Guardian online Newspaper >> As part of a public records lawsuit, a state judge in Oklahoma on Thursday ordered Pruitt to release thousands of emails that he exchanged with oil and gas executives by Tuesday. Pruitt has refused to release the emails for more than two years. <<
    I sent letters to each of our Federal Representatives, Federal Senators and my State Representative and Senator concerning Health Care. I out lined with sources including the CIA World Fact Book the costs of health care vs USA and other countries. I also included data on life expectancy. Bottom line even though we pay more as percentage of GDP, and per capita (per person) our average life expectancy at birth in years, and rank out of 183 countries, is # 31. Our state of Indiana here in the USA and DC ranks # 39 in average life expectancy at birth in years at 77.6 years. Essentially, I suggested a Canadian style National Health Plan.

    The Republicans want repeal ACA, but they want to replace it with you guessed it a complex plan which depends on your income if you Gold Plan or the shaft.

    Ralph Nader had an excellent article 21 Ways Canada's Single-Payer System Beats Obamacare.

    As the Trumpet tosses out his flash-band grenades to keep us distracted the Republicans are busy trying to use their "mandate" to disassemble any protections we had in the past from the Corporations.

  16. One of the basic lies of both Republicanism and Trumpism is job creation. They pretend to worry about it to get votes from the governmentally challenged but their real goal is to get campaign funding from oligarchs.

    What really makes consumers, progress and therefore jobs, hurts oligarchs, and that’s innovation. It requires the long look at economic progress not next quarters profits. In fact low unemployment hurts oligarchs too. It makes workers too pushy demanding and getting higher wages and benefits.

    So while they are giving oligarchs things for their money don’t expect anything to trickle down. Expect a torrent up.

  17. Well, first you have to get the Tea Party Congress to admit that there is “in fact” climate change happening. Second, they would have to acknowledge that at least some, maybe just a “tiny, weeny” part of the cause of that climate change is due to man made causes.

    If somehow we were able to drag some of the Tea Party Congress members that far, the carbon tax proposed by these “conservatives” would be excellent policy, IMO, on several fronts. In the past, there were members of both parties that championed a carbon tax.

    The reason this proposal is dead on arrival is covered in points one and two above. In fact, if facts still matter in politics, the fact these three men even proposed enacting a carbon tax to deal with non-existent climate change disqualifies them from being either Republicans or conservatives, by present day standards.

  18. At one time corporations were considered to be social as well as business vehicles for the conduct of business. There were several actors involved besides shareholders and their handmaiden financiers, including but not limited to corporate workers, consumers, vendors, ancillary industries and the communities in which they were sited. Now the courts have finally agreed with Wall Street that “shareholder value” is not only the sole purpose of corporate activity but inferentially that the previous actors have little or no say in corporate conduct of such activities. Thus it is all right if corporate activities spew out poison in our air and water since a carbon tax, for instance, is a “cost” and therefore not in consonance with the corporate responsiblity to enhance “shareholder value,” a responsibility the courts have now gone so far to describe as a “fiduciary duty!”

    Attempts by the EPA and others to tax industries for their environmental misdeeds have been characterized by the industries to be affected as over zealous regulation and based on zombie data. Now we have a Republican EPA head who has sued the EPA some 14 times as a state AG, and that is bad news. Worse news is that Republicans are set to pass laws that will either abolish the EPA or more likely to allow the shell of the agency to remain but restrict its authority to such a point that it is a toothless tiger while Big Coal continue to poison the water with its mining operations and the air with coal’s conversion into electricity.

    Query – don’t Republicans have progeny who need to breathe clean air and drink and bathe in clean water? Why do they think (if they think) they and theirs will be exempted from the tiger they are unleashing on behalf of their rich campaign contributors? Do they think they can pull it off politically because they control gerrymandered districts? Other than for greed, money and lust for power, all of which redounds to the benefit of Republican politicians and not to that of their constituents, what could possibly motivate anyone of any political stripe from adopting policies that protect our environment? We live in one country on one planet. Why destroy both? Is survival a political issue? To paraphrase a question asked in a congressional hearing years ago in another political context but applicable to these Republican politicians today: “Have you no shame?”

  19. David F; I will be 80 in April; my fifth grade teacher (maybe 1944) taught climate change due to the earth constantly changing position on its axis. I remember it well because she said the day would come in the far off future, when Indiana would have beautiful weather like Florida. That long ago, Mrs. Goodus could have been a Republican, politics as well as the climate has changed since then. And the only Tea Party we knew, held in Boston harbor, was a good thing at that time. There really were some “good old days”; days we will never see again and should hold onto in our memories and share with our children and grandchildren.

  20. Again, I disagree with much that’s on here. Climate change? Sure! Can we forecast what changes, and more importantly wisely spend enormous sums of money to alleviate the results? Not hardly. From time to time there are lists showing what Bill Gates, Matt Damon, various true scientific experts, etc. are actually spending large sums of money on. Global warming / climate change is rarely considered. Smallpox, malaria, TB, clean water in Africa, basic education, internet access to the Khan academy, etc. are legitimately soaking up the money and time. Places like Haiti have no money for infrastructure, and foreign aid is wasted, so every year there is a tragedy somewhere. Donors money is precious, and must be spent wisely. Large government taxes on certain countries (like USA) can be wasted (tragedy of the commons) for speculation as to warming, a new ice age, etc. Spending others resources so you can feel good is rarely a wise choice.

  21. Poor countries don’t contribute significantly to the problem. Energy use is primarily from wealthy countries.

    There little scientific uncertainty about the cause and effects. The problem is that we as consumers are the cause and near future tax payers will pay for the effects.

  22. Pete – You are right to a fault that near future tax payers will pay for the effects (fossil fuel burning). They will also be breathing bad air and swimming in and drinking down bad water, bad water, incidentally, that may have already covered Miami and other vulnerable communities. I tell my grandchildren to invest in property in the Colorado Rockies, from where they can go fishing in Lake Kansas to the east, if any fish are left in such in such a polluted mixture of hydrogen and oxygen.

  23. In concept this is somewhat similar to the carbon pricing scheme enacted in Australia by the then Labor government in 2011, established 2012, and later removed in 2014 by the incoming conservative government. We had one, they took it away. Good luck to the US hopefully leading the way with a carbon pricing scheme that can withstand partisan politics.

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