Now Is the Time for the GOP to Play Offense on Climate

Now Is the Time for the GOP to Play Offense on Climate
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President Biden’s blitz of climate executive orders has the GOP on the defensive. The axing of Keystone, the halting of federal oil leases, the reentrance into international climate agreements — all have pushed Republicans, newly in the minority, to fight with low-ball retorts like “Paris over Pittsburgh.”

But, the GOP can no longer afford to just play climate defense. Young people are driving change on the Republican Party’s stance and expect compelling answers to the climate challenge. Further, since 2017, an overwhelming consensus has emerged in the American business community in support of federal climate leadership and engaging in the Paris Climate Agreement.  This includes heavyweights like the Business Roundtable and the US Chamber of Commerce.

The GOP shouldn’t waste another second: It should advance a winning strategy to safeguard our environment, compete for the youth vote, and also strengthen US business. Just as President Reagan tackled the ozone crisis of the 1980s, elected Republicans should advance an approach that harnesses the power of American enterprise, slashes emissions, and positions the US to lead on the global stage.

Luckily, some of the foremost Republican elder statesmen have a plan.

Advanced by James A. Baker III and the late George P. Shultz, Secretaries of State under Presidents HW Bush and Reagan, respectively, the carbon dividends plan is a 4-step American solution designed to address both the domestic and international dimensions of the climate challenge. This plan is backed by many of America’s leading businesses—from IBM to Johnson & Johnson to General Motors—as well as top environmentalists.

Domestically, their Baker-Shultz Carbon Dividends Plan offers a surefire, market-based way to deliver emissions reductions. It includes an honest carbon price, critical for driving clean energy innovation and a tool the business sector much prefers. In fact, the Business Roundtable endorsed carbon pricing this fall and the US Chamber just last month called for market-based climate solutions, of which a carbon fee is the most economically efficient. At the same time, the plan would sweep away unnecessary regulations and return all revenue generated by the carbon price back to the American people in the form of quarterly dividend checks.

Woven into this domestic package is a powerful international policy tool, a key component to cracking what is ultimately an international issue. The Baker-Shultz Plan’s “border carbon adjustment” (BCA) would assess a fee on foreign imports that fail to account for the cost of their emissions. This would level the playing field for US businesses and position the American economy to thrive.

New research suggests how much a BCA would boost America’s trade competitiveness. According to data from the economic research firm MacroDyn, American manufacturers are much more carbon-efficient than their international competitors in China, India, and Russia. For backbone US industries—including steel, motor vehicles, and mining—this advantage is even more pronounced. A BCA would therefore benefit American industry for its existing carbon efficiency and position US businesses to thrive on the global stage.

A BCA would not only boost America’s trade competitiveness; it also would give the US international climate strategy real teeth. If countries adopt American-style carbon pricing, they would enjoy unfettered trade with the United States. Those who don’t would have to own up for the carbon content of their products by paying a fee when those goods enter the US market. When a large enough network of nations belongs to America’s “carbon club,” polluting nations would face significant economic pressure to rise to American standards. Unsurprisingly, the idea of a BCA has ruffled China’s feathers.

Importantly, America’s carbon advantage may not last forever. Other countries are racing to deliver cleaner, carbon-efficient products. The sooner America prices carbon with BCAs, the greater America can realize the benefits of its existing carbon efficiency.

Considered together, a carbon dividends approach would deliver wins for both the American economy and the environment. According to an independent analysis by Thunder Said Energy, the Baker-Shultz Plan would unlock $1.4 trillion in new capital investments and energy innovation. It would also slash US carbon emissions by more than half by 2035. And, crucially, for the reasons outlined above, it would put America interests in the driver’s seat of global climate policy.

At this inflection point in American politics, the GOP has the opportunity to adopt a new and more effective strategy on climate. Embracing the Baker-Shultz plan—which has earned the backing of leading businesses, environmentalists, and energy companies alike—would position the GOP to credibly compete in the quest to solve climate change, strengthen the American economy, and win support from the next generation of voters for years to come.


George Gemelas is the Executive Vice President of Students for Carbon Dividends and a graduate student at the Yale School of the Environment.

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