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Carbon Pricing

David Roberts: “no struggle between philosophies happening in U.S. climate politics, only a struggle among economic interests.”

 
co2 tax carbon pricing

David Roberts of Grist posted a wonderful critique of climate policy debate terminology on Grist yesterday. He tackles the myth that carbon pricing is a liberal policy, as well as the myth that there’s a huge difference between carbon pricing and a carbon tax. Here’s the full post:

by David Roberts

Ezra Klein had an interesting post last week about the arbitrary nature of what gets coded “left” and “right” in today’s policy debates. He mentions cap-and-trade, which was the subject of bipartisan consensus from 2000 to 2008, at which point it abruptly became socialist.

Klein is right that the ideological coding of the climate debate is peculiar, but he’s barely scratching the surface. The left-right alignment on climate is completely scrambled, in part because the real battle, as we shall see, is not ideological.

On the same day, Brian Merchant had a post on Treehugger about “the right-wing case for a carbon tax.” Technically it should have been called “the right-wing case for carbon pricing,” since it cites a Washington Post op-ed from Reps. Henry Waxman (D-Calif.) and Ed Markey (D-Mass.) and two of their former Republican colleagues that advocates either “a market mechanism such as the sale of carbon allowances or a fee on carbon pollution.” Merchant also notes that legendary conservative economist Arthur B. Laffer — father of the Laffer Curve — came out last week in favor of a carbon tax as part of a “tax switch” that would reduce income tax rates. (Laffer is “agnostic” on climate change but he really, really wants to reduce the income tax.) As Joe Romm notes, in 2011, the Peter G. Peterson Foundation funded the work of six groups across the ideological spectrum to develop deficit plans. Of the six, only one did not include a price on carbon: the hacktastic Heritage Institute.

I’m not sure I would call carbon-pricing solutions right-wing, but I do think it’s fair to characterize them as conservative. Conservative economic thinking prefers a minimum of government intervention in the economy. Sending a carbon-pricing signal via a tax or cap is a minimalist intervention, as technology and industry agnostic as policy can be. If the revenue is used to reduce the deficit or other taxes (income or payroll), then the policy is even more solidly conservative, as both are conservative priorities.

Not that there’s anything wrong with that! Just because carbon pricing is conservative doesn’t mean it’s bad or undesirable. I, like virtually everyone who’s thought seriously about the problem (which excludes Heritage), see a substantial role for carbon pricing. I’m just saying it is a solution designed to align with conservative principles, endorsed by both Chicago school and neoliberal economists.

So what would liberal climate policy be? As I see it, liberal climate policy would involve more planning — developing and deploying new energy sources, new technologies, and new urban forms on purpose, as part of a plan to remake the economy along sustainable lines. There are obviously many varieties and gradations of planning, from the Chinese approach all the way down to, say, building codes. Public investment, performance standards, industrial policy, job training programs, mandates, tariffs, and a variety of other regulations would qualify as liberal, in that they represent more active government shaping of the economy.

The odd thing that’s happened in climate circles in the last few decades is not just that the (generally liberal) environmental community has fervently championed “market-based” solutions like carbon pricing, but that the activist left in particular has adopted a carbon tax as its cri de coeur. Especially during and since the climate bill fight, the debate among climate hawks is often framed such that cap-and-trade is the “right” choice and a carbon tax is the “left” choice. That doesn’t make any sense at all on the merits — the only differences between the two, economically speaking, come in the design and implementation, mainly in what’s done with the revenue. As I said, both are basically conservative in their approach.

Nonetheless, that’s the odd situation we are in today: an intra-left battle between two conservative policy solutions. The climate left is now aligned with think tanks and intellectuals on the right for a carbon tax and against cap-and-trade. Politicians on the right offer nothing and politicians on the left shy from cap-and-trade because it’s coded too liberal. Meanwhile, the only policies doing any real work now — broadly liberal policies like renewable energy standards, feed-in tariffs, loan guarantee programs, and advanced energy research — get remarkably little public attention unless they are being attacked by Republicans.

It’s a mess. There really is no coherent left vs. right on climate, at least not in terms of economic ideology.

But that just goes to show that the real battles around climate have nothing to do with principles of governance. The central battle, the one that shapes all others, is the one between those aligned with the status quo — fossil-fuel development, sprawl, and unfettered carbon pollution — and those who seek to change it. There is nothing “left” or “right” about the status quo, it’s simply a set of rigged rules and institutions meant to support certain financial interests. Commitment to preserving the privileges and advantages of status quo interests is not a philosophy at all. It does not submit to placement on an ideological spectrum. (It is thus a dark irony that the term used to describe those most committed to this purely instrumental approach to governance is “centrists.”)

There are other sub-battles: The battle over science and education. The battle over communications and framing. The battle over activism and its targets. But these are fights over epistemology, psychology, and social change — none of them divide neatly into left and right. The terms “liberal” and “conservative” are often used around climate, but they are used in a purely tribal sense, to designate some group or coalition. In actual fact, there is no struggle between philosophies happening in U.S. climate politics, only a struggle among economic interests.

David Roberts is a staff writer for Grist. You can follow his Twitter feed at twitter.com/drgrist.

Carbon tax image via shutterstock.

 
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Zach is tryin' to help society help itself one word at a time. He spends most of his time here on CleanTechnica as its director, chief editor, and CEO. Zach is recognized globally as an electric vehicle, solar energy, and energy storage expert. He has presented about cleantech at conferences in India, the UAE, Ukraine, Poland, Germany, the Netherlands, the USA, Canada, and Curaçao. Zach has long-term investments in Tesla [TSLA], NIO [NIO], Xpeng [XPEV], Ford [F], ChargePoint [CHPT], Amazon [AMZN], Piedmont Lithium [PLL], Lithium Americas [LAC], Albemarle Corporation [ALB], Nouveau Monde Graphite [NMGRF], Talon Metals [TLOFF], Arclight Clean Transition Corp [ACTC], and Starbucks [SBUX]. But he does not offer (explicitly or implicitly) investment advice of any sort.

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