Priced out: Both major political parties used to love the carbon tax. So why are they giving up on it?

• By Shannon Osaka, Grist

This story originally appeared in Grist, and is republished here as part of Covering Climate Now, a global journalism collaboration strengthening coverage of the climate story.

It was a cold February day in Salem, Oregon, and Republican state senators were fleeing the capitol.

It was weeks before the COVID-19 pandemic gripped the country and kept Americans huddled inside. So members of Oregon’s legislature were still showing up for work to haggle over language, introduce bills, and cast votes. But on this particular morning, 11 of the 12 Republican senators in the 30-person body were nowhere to be found. Sergeants-at-arms searched Capitol offices, then gave up; eventually, the Senate was forced to adjourn, lacking the two-thirds majority needed to conduct basic business.

The Republicans had bolted from Salem to avoid voting on a policy aimed at slashing planet-warming pollution. The bill on the table, H.B. 2020, would have put a price tag on carbon emissions — long considered one of the simplest and most efficient ways to cut greenhouse gases. It seemed like a no-brainer for a state that, like many of its West Coast neighbors, has faced record-breaking heat waves, disappearing glaciers, and choking wildfires in recent years.

With Oregon’s Republican senators in hiding, the effort failed. H.B. 2020 joined a series of bills and ballot measures across the United States — from Massachusetts to Washington state — that proposed putting a price on carbon and have remained stuck in the waiting room of American politics, never turning into law.

It’s an unexpected turn for an idea that, for more than a decade, was often at the forefront of plans to address climate change — and even held the promise of garnering bipartisan support. Al Gore, the former vice president whose documentary An Inconvenient Truth became an unlikely smash hit, called the need for carbon pricing “just as plain as day.” Both Barack Obama and John McCain ran for president in 2008 promising to address climate change through a national cap-and-trade program. A federal carbon tax drew support in recent years from such strange bedfellows as ExxonMobil and Senator Bernie Sanders, corporate America’s sworn enemy.

Today, however, both parties are largely silent on the idea, if not outright hostile. On the Republican side, a lot has changed since 2008. Even as more Republicans — especially younger ones — say they care about climate change, the GOP’s proposals to tackle global warming have drifted toward the absurd. Earlier this year, House Republicans vowed to address rising greenhouse gas levels by planting 1 trillion trees; President Donald Trump famously called climate change a Chinese “hoax,” and has moved to withdraw the United States from the landmark Paris climate agreement.

Meanwhile, the insurgent left wing of the Democratic Party has cast carbon pricing aside in favor of more ambitious, large-scale ideas. “For far too long, ideas like a carbon tax or cap-and-trade were touted as the premier solutions to climate change,” Alexandria Ocasio-Cortez, the popular Democratic congresswoman from the Bronx, wrote on Twitter last year. “They are inadequate.” The party’s presidential nominee, Joe Biden, has proposed a massive, $2 trillion package that would eliminate emissions from the electricity sector by 2035 — but stopped short of recommending a carbon tax. Similarly, a 538-page climate plan, released in June by Democratic members of the House, included only two caveat-filled pages on the idea. “Congress should consider a carbon price as only one tool,” the authors warned. “Carbon pricing is not a silver bullet.”

Somehow, over the past decade, what was once considered the policy-of-choice has gotten shunted to the sidelines. With Republicans, like the senators in Oregon, largely missing-in-action when it comes to climate change, Democrats have moved on. But the carbon price might not be dead just yet: There are still those on Capitol Hill who still believe bipartisan climate action is in our future — and that taxing or capping carbon could be the solution.

In 1776, the Scottish economist Adam Smith, writing in The Wealth of Nations, noted that certain goods like sugar, rum, and tobacco — which hurt their consumers and society as a whole — had nevertheless become “objects of almost universal consumption.” As a result, he said, they were “extremely proper subjects of taxation.”

Smith was focused on 18th-century scourges, but he could just as easily have been talking about fossil fuels. In the United States, around 16.5 million tons of carbon dioxide are released into the atmosphere every single day from the burning of coal, oil, and gas. (That’s more than twice the weight of the Great Pyramid at Giza.) Those emissions create a dangerous, heat-trapping blanket around the world. They melt glaciers, spur sea-level rise, and fuel wildfires that ravage the American West and hurricanes that batter the Southeast.

Although carbon dioxide itself doesn’t constitute a direct health threat, fossil fuel use also releases a slurry of toxic chemicals that can lead to asthma, strokes, heart disease, and cancer. According to the World Health Organization, roughly 7 million people around the world die each year from causes linked to air pollution.

Burning fossil fuels, therefore, creates a massive cost that no one is paying for — a “negative externality” in economist-speak. “Allowing people to emit CO2 into the atmosphere for free is similar to allowing people to smoke in a crowded room or dump trash into a national park,” wrote the Nobel prize-winning economist William Nordhaus in 2008. Nicholas Stern, also an economist and the author of an influential 2006 report on global warming, has argued that climate change “is the greatest market failure the world has ever seen.”

To those who spend their days thinking about money and markets, there’s a simple fix: Put a price on carbon to reflect its actual costs to the planet and human health. If fossil fuels are more expensive, the thinking goes, individuals, corporations, and governments will not only use less energy, they’ll also boost wind and solar power, expand public transportation, and take other steps necessary to build a green economy.

Such a price could work through a simple tax (much as states tax alcohol, cigarettes, and, in some parts of the country, marijuana), or through a more complicated setup known as “cap-and-trade.” In a cap-and-trade system, emissions are “capped” at a particular level, and polluters buy and trade permits to emit CO2 up to that threshold. That lets the market determine the price.

Joseph Majkut, director of climate policy at the Niskanen Center, a think tank in Washington, D.C., told me that economists arguing over which option is better are like “fans of rap music arguing over which Wu-Tang album is best.” Both would ramp up prices on emissions over time, thereby lowering carbon pollution. And both would — ideally — prevent the planet from burning up.

More than 40 countries around the world have already implemented one policy or the other. The European Union has a cap-and-trade system that covers all of its member countries. Under Prime Minister Justin Trudeau, Canada launched its carbon tax program in 2018. Successes in the U.S. have been scattered: California has a cap-and-trade program that began in 2013, as do 10 Northeast states that belong to the Regional Greenhouse Gas Initiative, founded in 2009. But national action has remained elusive, partly because any such plan would need to make it through Congress, a legislative body that has been torturously slow to recognize the threat posed by climate change.

The first time Tamara Staton visited the U.S. Capitol Building, in 2013, she was in awe. “I was walking from the House side to the Senate side, in front of the Capitol,” she said. “And I thought, ‘Oh my gosh, this is what democracy is. Our representatives, listening to what I care about.’” For the first time in her life, Staton felt connected to the process of making policy. “I just wanted to shout to the world: ‘You guys! You just have to tell them what you want!’” she said.

The 46-year-old consultant and former teacher from Portland, Oregon, had traveled to Washington, D.C., to lobby Congress to adopt a carbon tax. She had spent three days in Congressional offices, pitching representatives and senators or their staffers, talking to both Republicans and Democrats about the need to save an overheating planet. Now, seven years after her first trip, Staton realizes that it’s not as simple as just telling members of Congress what you want — the government moves slowly, and political barriers abound.

Yet that hasn’t left her feeling jaded. “I still think democracy is a lot less broken than I used to think it was,” Staton said. Part of that transformation was because of the productive meetings she had with Republicans.

To be sure, raising taxes isn’t exactly known as a conservative idea. “Read my lips: No new taxes” was George H.W. Bush’s famous line at the 1988 Republican National Convention. For decades, seemingly every Republican in Congress has signed the Americans for Tax Reform’s pledge never to raise taxes or risk getting kicked out of the party. Many proposals for carbon taxes, however, would make them “revenue-neutral,” meaning the government wouldn’t collect more revenue than before. That could happen by cutting sales and income taxes, or by simply handing over all the money raised from a carbon fee to taxpayers.

The latter approach is favored by the Citizens’ Climate Lobby, a nonpartisan environmental group that, for more than a decade, has trained volunteers like Staton to lobby Congress, write op-eds, and rally grassroots support for a very specific revenue-neutral carbon tax. Their proposal, introduced in the House as the Energy Innovation and Carbon Dividend Act, would start out by taxing carbon emissions by $15 a ton, and then ratchet the price up by $10 every subsequent year. The proceeds would be returned directly to all Americans, with the average family of four receiving $4,410 in dividends in the 10th year of the program, according to the group’s estimates.

Danny Richter, the vice president of government affairs at the Citizens’ Climate Lobby, said that the policy would overwhelmingly benefit poorer Americans. About two-thirds of Americans, he estimates, would be better off under the plan — they would get more back in dividends than they would lose paying the tax. And it would cut carbon pollution by 40 percent within 12 years.

Staton said that the Republicans she has spoken to in Congress over seven years of lobbying tend to be intrigued by the idea of a revenue-neutral carbon tax. After all, it sidesteps traditional regulation, allowing the magic of market forces to do the lion’s share of emission-cutting. “They are curious about the market-based approach,” she said. “They like the equality of the dividend. They like that it highlights our ability to be independent decision-makers.”

The thing is, Republicans in Congress who back the idea tend to get bounced from office. Bob Inglis, a former representative from South Carolina, introduced a bill in 2009 called the Raise Wages, Cut Carbon Act — in which revenue from a carbon tax would offset a cut in payroll taxes — then was ousted from his House seat in the 2010 election. “In a way, I’m the worst commercial for it,” Inglis told Grist, wryly. Carlos Curbelo, a Republican climate advocate from Florida, also lost his seat in the House in 2018, shortly after proposing similar carbon tax legislation.

And, while representatives and senators have proposed 10 carbon pricing bills in the last two years (nine for a carbon tax, one for a cap-and-trade system), only two Republicans have signed on as cosponsors: Representative Francis Rooney, a Republican from Florida, is a cosponsor on four, and Representative Brian Fitzpatrick from Pennsylvania has cosponsored one. The bill pushed by the Citizens’ Climate Lobby has 82 cosponsors, but Rooney is the only Republican — and he’s about to retire.

Staton believes that many Republicans are open to the idea of a tax — but are afraid to show support for it. “It’s dangerous for them to come out on climate,” she said. “It’s dangerous politically.”

Richter of Citizens’ Climate Lobby maintains that once the bill reaches double-digit numbers of Republicans, it will become the “easy, good, durable solution.”

But what if those votes aren’t forthcoming?

“The political theory of the carbon price was always ‘This is the way to get bipartisan support,’” said Noah Kaufman, a researcher at Columbia University’s Center on Global Energy Policy. “And I just think more than anything, people are losing faith in that.”

As the Citizens’ Climate Lobby tried to coax sympathetic Republicans to come out of hiding, a new coalition was forming on the left. They also wanted to stop climate change. They also showed up at representatives’ offices in the Capitol Building. Their idea, however, was much bigger than a carbon tax.

***

In November 2018, hundreds of young, serious-faced climate activists crowded into the Washington, D.C., offices of House Minority Leader Nancy Pelosi. They carried yellow and blue signs with slogans in all-caps: “NO MORE EXCUSES” and “GREEN JOBS FOR ALL.” Their goal? Get Pelosi to create a committee to plan the “Green New Deal,” a sweeping proposal to reshape the economy while tackling climate change.

The protesters were representatives of the Sunrise Movement, a youth-led activist group, and their sit-in generated huge waves of media and political attention. (It didn’t hurt that they were joined, halfway through, by Ocasio-Cortez.) Democrats, who haven’t had a comprehensive plan to address climate change in over a decade, were suddenly faced with a plan, and an idea, more radical than they could have possibly imagined.

According to a resolution released by Ocasio-Cortez on the day of the protest, the Green New Deal should include plans to produce all electricity in the United States from renewable sources by 2030, provide universal healthcare to all Americans, guarantee every American a job, and a whole lot more. By the following summer, a Politico writer noted: “The national discussion around climate change has moved more in the past eight months than it did during the previous eight years.”

One of the simplest explanations for the demise of the carbon price is that, faced with a Republican Party that hasn’t exactly embraced bipartisanship, the left has gotten, well, left-er. Set against the sweeping, systemic changes advanced by Green New Deal supporters, taxing or capping carbon looks tepid and unambitious. The focus of the Sunrise Movement and allied organizations is on tethering climate goals to a whole host of other Democratic priorities. They’re not trying to unite Republicans and Democrats; they’re trying to pull the entire party to the left.

“The theory of change to some extent has shifted,” said Parrish Bergquist, a professor of environmental policy at Georgetown University. If advocates for the Green New Deal want to connect global warming to income inequality, public health problems, and racial justice, “having a carbon tax kind of recedes into the background,” she said.

There’s evidence that this strategy could win votes. In a paper published in May, Bergquist and her coauthors found that bundling climate policy with other goals — like a $15 minimum wage, expanded affordable housing, or a nationwide job guarantee — increased public support, particularly among Black and Hispanic Americans. In some ways, that’s not surprising. Although concern over global warming has climbed in recent years, it’s still only the 13th most significant issue for U.S. voters overall, according to the Yale Program on Climate Change Communication. The economy, COVID-19, and health care rank much higher.

And although carbon pricing generally polls well (68 percent of Americans say that they would support a revenue-neutral carbon tax), that hasn’t translated to success at the ballot box, even at the local level. “The word ‘tax’ is really not something Americans are excited to sign up for,” Bergquist said.

In left-leaning Washington State, voters struck down two separate carbon tax initiatives on the ballot, the first in 2016 and another in 2018. The first initiative garnered only 41 percent of the vote, while the second managed to scrape up 44 percent. To defeat the most recent proposal, BP and other big businesses outspent supporters 2 to 1. Their ads depicted the carbon tax as unfair, too friendly to some industries, and sure to drive up families’ energy bills.

Some activists on the left have made a similar argument. “As a movement, we believe that no one should be able to pollute our air for free,” Zina Precht-Rodriguez, a spokesperson for the Sunrise Movement, said in an email. “But we also believe that carbon pricing can unfairly put the burden of responsibility on the middle and working class who’ve been experiencing stagnant wages for decades.” (Economists say a well-designed carbon tax could benefit the working class through cash dividends.)

Some organizations and community groups argue that a carbon tax wouldn’t do enough to help Native American, Black, and Latino Americans who are already more likely to bear the costs of climate change. Black Americans, for example, breathe in 1.5 times more fossil-fuel pollution than the population at large, a disparity that causes asthma, heart disease, and respiratory problems. For many activists, the way to protect these communities is to invest heavily in renewable energy and keep fossil fuels from being extracted in the first place.

“If we’re really serious about climate change, the very first question is, ‘Is this policy going to keep fossil fuels underground?’” said Tamra Gilbertson, a staffer for the nonprofit Indigenous Environmental Network. “And if the answer is ‘No,’ we’re going on the wrong track.” Gilbertson singled out cap-and-trade, which, she argues, encourages companies to buy “carbon offsets” — funds for planting trees or clean energy that take them off the hook for some emissions — instead of slashing pollution where it matters most, around communities near power plants, for example.

“We often say it’s like a ‘Band-Aid response,’” said Angela Adrar, the executive director of the Climate Justice Alliance. “We’ve got a big wound, and carbon pricing is a Band-Aid response that is just not going to solve the crisis we’re in.”

***

In July, flanked by the red-and-white stripes of three American flags, Democratic presidential nominee Joe Biden took aim at the current president’s record on climate change. “When Donald Trump thinks about climate change, the only word he can muster is ‘hoax,’” the former vice president said, squinting at a small audience of masked reporters and photographers assembled in his hometown of Wilmington, Delaware. “When I think about climate change, the word I think of is ‘jobs’ — good-paying, union jobs.”

Biden’s climate plan, which he released earlier that day, is far from a capitalist critique, but it can still be seen as a scaled-back version of what many Sunrise Movement activists had been calling for. (“Joe Biden is campaigning on the Green New Deal — minus the crazy” read one headline in Slate.) Though there’s no push for universal health care or a federal jobs guarantee, it does call for generating all of the country’s electricity from clean energy sources by 2035, and spending $2 trillion over 10 years to get there. The plan also promises that 40 percent of the benefits would go to historically disadvantaged communities — those Americans most vulnerable to heat, pollution, and extreme weather.

There’s no mention of a carbon tax, no cap-and-trade program. That could partly be because the Biden camp doesn’t think those policies will galvanize the electorate. And a campaign pitch isn’t a guarantee of what a Biden White House might actually propose. “From a political standpoint, why would you lead with the idea that you’re going to tax someone?” said Kaufman, the Columbia researcher. “You want to lead with all the things you’re going to give people.”

Still, besides economists and supporters of the Citizens’ Climate Lobby, it’s hard to find many people who are excited about carbon pricing. It’s become a policy that a lot of people like, but no one loves. Nowadays, most Democrats would rather spend big and regulate; most Republicans would rather ignore the heating planet altogether.

There are a few exceptions. In August, Dick Durbin of Illinois, the second-highest-ranking Democrat in the Senate, introduced a new carbon tax bill similar to the one pushed by CCL. (Despite hopes of bipartisanship, he doesn’t yet have a Republican cosponsor.) In mid-September, the Business Roundtable, one of the country’s most powerful trade organizations, came out in favor of “placing a price on carbon.” The group, which includes ExxonMobil, Bank of America, and other corporate giants, said that the revenue raised should pay for investment in research and development of carbon-cutting technology, support for workers, and other complementary policies.

And Bob Inglis, the former representative from South Carolina, still hasn’t given up. He now runs a nonprofit organization called RepublicEn (the En stands for “energy” and “enterprise”), and travels around South Carolina trying to persuade Republicans to reconsider their knee-jerk responses to global warming. Inglis distinguishes between what he calls “actual conservatives” — those who believe in free-market principles and could get behind a carbon price — and the “populist nationalists” who have taken over the party under Trump.

“A lot depends on how this election turns out,” Inglis said. If Trump loses, he says, the GOP will have an opportunity to reimagine itself. Such a reappraisal could, in theory, swing the balance of power back toward more dyed-in-the-wool conservatives willing to take action on climate change — provided it fits within a small-government, low-regulation framework. Even if Trump wins, Inglis says he still expects to see a GOP reckoning, but pushed back to 2024. Inglis, for his part, has endorsed Biden.

For now, Democrats are forging ahead with a single-party vision that doesn’t include slapping a price on carbon. If their party captures a majority in the Senate, both Kamala Harris and Joe Biden have voiced a tentative willingness to abolish the filibuster — the antiquated Senate rule that requires 60 of the 100 senators to pass most bills — in order to pass Green New Deal-like legislation. If the filibuster is gone, and the Democrats retain their majority in the House, they’ll just need 50 votes in the Senate, no Republicans necessary.

Inglis still thinks that bipartisanship is the way forward. For years, he told Grist, he didn’t believe that humans were heating the planet, until he finally saw the light during a trip to Australia’s Great Barrier Reef. He believes that other Republicans will follow in his footsteps, by accepting the reality of global warming, then supporting a commonsense, conservative solution.

“The thing that I ask of the left is just to please let conservatives in on this conversation,” he said. And when the time comes that Republicans are ready to support climate action, “I just hope there are going to be enough progressives who say, ‘Hey, let’s give it a go.’”

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