Embracing a Carbon Tax Would Doom Republican Nominee

Republicans seeking our party’s nomination for president will take to Denver’s debate stage Wednesday in one of seven states critical to winning the Electoral College, a list that also includes my home state of Virginia. Despite the significant geographic distance and differences between them, there are many similar political dynamics at play in both states.

From 1952 through 2004, Virginia had voted for the Republican nominee in every presidential election with the sole exception of Lyndon Johnson in his landslide win in 1964; Colorado added only Bill Clinton in 1992 to the Johnson exception. That’s 14 election cycles over 56 years’ time in which the two states combined to go for the Republican nominee in 25 of 28 instances. Yet both went for President Obama in 2008 and 2012, having been turned “purple” by changing demographics, in-migration from other states (and countries), and the influence of younger voters.

It’s hard to see a path to the necessary 270 Electoral College votes for any Republican nominee without the Commonwealth of Virginia and the State of Colorado in the red column next November. Another area of commonality between the two states presents an opportunity for Republicans, however: Both are significant energy producing states whose economies and jobs are threatened by liberal policies to restrict production and impose stringent regulations.

Unfortunately, there has been some disconcerting chatter among some conservative-leaning academics and pundits in support of a carbon tax. Should a Republican nominee embrace such an approach, it would doom his or her chances to carry either state, which would doom any chance to win the White House.

The last time a carbon tax was seriously debated in Washington, it was the unattainable Holy Grail for liberal environmentalists who had to settle for a Cap-and-Trade system instead. This time, liberal environmentalists have found some better messengers – former Republican elected officials, economists, conservative commentators and business leaders to help make the case.

Republican candidates should not be swayed. There is no place for a carbon tax in a pro-growth economy. A carbon tax would be to the energy sector what a single-payer system is to healthcare – both insert political appointees squarely into the marketplace and are financed through regressive, job-killing taxes. Indeed, the Congressional Budget Office estimates that because lower-income Americans pay a greater percentage of income towards energy costs, the impact on them of even a small carbon tax would be tantamount to a new 10% income tax.

A carbon tax is a seductively simple tool. The idea is to tax carbon dioxide emissions enough to make their use cost-prohibitive, thereby making other, more expensive sources of energy more economically competitive. Yet despite this simplicity, a carbon tax would not achieve its primary purpose of reducing carbon emissions.

This is because a carbon tax allows carbon-intensive industries to pay a penalty for the carbon they release. It becomes priced into their business model. There are companies that want to have a set cost for carbon so they can factor that into their pricing and pass that penalty on to consumers. Not only do they not reduce their own carbon emissions – but we pay for it. A better route to reducing carbon emissions is through technological innovations that are adopted uniformly by all industries in all countries. A carbon tax that raises the cost of traditional fuels does not get us there.

In 2014, renewable sources of energy accounted for 10% of total U.S. energy consumption and 13% of electricity generation. Coal, oil and gas still supply more than 85% of our needs reliably and cheaply. Energy is the primary input for every good and service we produce. U.S. energy policy should be built around the principle that safe, reliable and affordable energy fosters growth and competitiveness. An energy policy that taxes 85% of our energy consumption in order to create artificial demand for energy sources that are both unreliable and unaffordable will have profoundly negative effects on the broader economy.

Reliable and affordable energy underpins virtually every element of the economy, providing mobility, power generation, heating and cooling. Indeed, the energy economy keeps our industries competitive, bolsters consumer confidence and pocketbooks, and promotes improved living standards. In economic terms, the U.S. crude oil and natural gas industry contributed more than $1 trillion annually to the U.S. economy (equal to 8 percent of the U.S. gross domestic product), and supported nearly 10 million jobs in 2011.

Energy has not been addressed in the prior two debates, but given the location of this one and the fact that Democrats identified climate change as a top priority in their first debate, it’s likely to come up on Wednesday. Republicans would be smart to hit hard against any suggestion of imposing a regressive, job killing carbon tax on the American people, and help pave their way to a win next year.

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