A carbon tax isn’t what it’s cracked up to be.
Last week, a group of veteran Republican political advisors including former Treasury Secretary James Baker III and Former Secretary of State George Shultz made a media splash by unveiling a new carbon tax proposal that promises to reduce emissions, eliminate pollution regulations, and deliver $2,000 to every household in America every year.
The Republican proposal is generally similar to other carbon tax ideas that have circulated for years: Place a price on carbon emissions—$40 per ton in this case—and then distribute the money that is collected to households to offset the increased prices for things that would result from the tax, like gasoline and home heating fuel.
Some environmentalists have endorsed the carbon tax under the assumption that it would decrease greenhouse gas pollution and force a transition to renewable energy. Last year, even tech billionaire Elon Musk called for a “revolt against the fossil fuel industry” in the form of a carbon tax. Their theory is that such a tax would decrease the use of fossil fuels by making them more expensive and uncompetitive with renewable energy. But are the hopes of tax supporters really justified?
Recently Food & Water Watch reviewed the British Columbia (BC) carbon tax program, often cited by advocates as an example of success, and found that taxing carbon emissions has not reduced pollution and that greenhouse gas (GHG) emissions actually increased. From 2009 (the first full year of the tax) to 2014 (the most recent data available) GHG emissions from taxed sources in BC rose by a total of 4.3 percent. And in the seven years since the carbon tax took effect, total gasoline sales rose 7.37 percent.
The lack of decreases in GHG emissions and fossil fuel consumption in BC means that powerful multinational oil corporations have little to fear from a carbon tax. Not only did Secretary of State and former Exxon CEO Rex Tillerson endorse a carbon tax in 2009, Exxon helped spur the idea at the same time the company became the biggest fracker for oil and gas on the planet. Exxon participated in U.S. Climate Task Force meetings to reach an agreement on a carbon tax as their preferred policy to address pollution. Exxon and other big oil companies are happy to pay a tax, much of which can be passed on to consumers, to continue drilling and fracking as usual.
In fact, renewables now generate energy more cheaply than fossil fuels, but their expansion is stymied by politics. The industry has little political power compared to oil and gas companies that are highly invested in keeping the status quo. Left to their own devices, oil and gas companies will drill and frack until the last drop of oil and gas, environmental and social consequences be damned.
Because of their shared support for a carbon tax, Musk endorsed Tillerson for Secretary of State and is now a Trump advisor. When Musk suggested a carbon tax in a meeting with Trump, it wasn’t rejected out of hand, according to news reports.
There is simply no shortcut to getting off of fossil fuels. A clean energy revolution will succeed when we enact government policies to mandate a transition to 100 percent renewable energy and a rapid timeline to end fracking, drilling, and mining for fossil fuels.
That is not an approach likely to draw much support from fossil fuel-friendly politicians or corporate polluters, but it is one that will actually work.