An alternative that may be more sensible than deficit reduction: a program to help reinsulate houses and build more energy-efficient homes. Or literally anything else to help lower energy consumption and fossil fuel burning. Deficit reduction is really not a priority at this point.
I like the “New Green Deal” as something to be aspired to, but the technologic and political reality is that there is no way we’d ever be able to get it implemented in short order. We need a long term plan that phases in the low cost solutions and subsidizes the medium to high cost options. First attack the low hanging fruit, switch all coal powered plants to natural gas, pass higher efficiency standards for electronics, put out subsidies for insulating homes. Second, we need a national plan to upgrade the grid for storage and long range energy transmission so we can leverage intermittent renewable sources across the country. Then we can focus on powerplant replacement and energy storage. I would guess 80 years from start to finish, but we could cut a fourth (or more) of carbon emissions within a decade just with step one.
Ah yes, the 1980s, when federal receipts increased $470B, and when spending increased $960B. So they spent it and then some. The “spending maximum” in 2009? We bring in about a trillion more now and spend about a million more (2017). I’m not saying they shouldn’t spend it. But my neighbors of all flavors here on the hill are not prone to doing otherwise.
Looks like the plan ExxonMobil, Shell, BP, etc. are putting their money behind is the Baker-Schultz plan.
Essentially:
[ol]
[li]A gradually rising carbon fee[/li][li]Carbon dividends (money from 1 gets distributed evenly per capita)[/li][li]Border carbon adjustments[/li][li]Regulatory simplification[/li][/ol]
My comments:
[ol]
[li]This seems to be what most people advocating a carbon tax want. I’m curious how it will be administered. They’re proposing starting with $40/ton. I’ve seen complaints this isn’t enough but I haven’t performed any analysis myself.[/li][li]Not really relevant to climate change. I’m assuming it’s a way to try to sell it to the less enthused. There are other options…maybe better options. Some in this thread like the idea of revenue neutral; others do not. I’m currently ambivalent, although my liberal feels get tickled by raising more revenue. I’d like to see who will likely feel the brunt of increased costs and make sure we’re offsetting any harm to poor people. I don’t need a $2000 check. Others might.[/li][li]Makes sense, although devil, details, etc.[/li][li]Repeal the Clean Power Plan, tort immunity, etc. There are large red flags here. Although if a regulation is directly aimed at carbon reduction, then I can see this replacing it entirely. Trump and Pruitt are already dismantling the CPP, so that may be moot. Many aren’t going to like the tort immunity for past emissions. I’ll entertain it for now.[/li][/ol]
Here is a Washington Post opinion piece. The author supports a high carbon tax and opposes adding jobs and other social issues to the Green New Deal:
IMO this approach of a broad-based carbon tax with all proceeds being distributed equally as a dividend is the best bet to get bipartisan support. I agree that a “flat dividend” is not really relevant to climate change directly - but I think it is hugely relevant to getting right-wing politicians on board, which is critical to getting legislation passed. As discussion here and elsewhere has shown, keeping carbon tax as a form of general government revenue causes an extreme amount of angst among many people, thus making it politically troublesome. Promising to immediately refund the tax to all citizens equally makes it difficult for the right to attack such a proposed tax. Hopefully, carbon dividends would also allow it to appeal to the masses - the impact of carbon taxes will be diffuse (higher gas prices, heating costs, shipping costs, etc.) but people will notice a $2k check every year. If the tax ends up being too regressive, that’s something that can be addressed with separate adjustments (progressive payout, increasing welfare, improving transit options, etc.). One of the outcomes might be that poorer people will have to adjust their lifestyles to have lower carbon footprints - this might not really seem fair while richer people might just make no changes to their lifestyle and incur just marginally higher costs for them to keep living their lifestyle, but from an impact to carbon emissions perspective, it would be a positive outcome.
The Washington Post article that PastTense posted also seems like a pretty workable plan overall.
Back on the OP’s plan, Sam Stone, I must admit I am surprised that your plan involves a fair amount of top-down planning, in that it would require the government to pick specific projects to be earmarked for funding. I think green levies (on top of a broad-based carbon tax) may absolutely help accelerate the rate of change, but you are inevitably relying on the government to pick winners - I guess that’s just inevitable in the case of large infrastructure projects. Modernizing the grid for a renewable energy economy is going to be this century’s version of the interstate highway system.
Also just to address a point in septimus’s post:
Your final sentence is exactly WHY a carbon tax should be designed to be revenue neutral. Having a carbon tax proposal which results in a change to the government budget would make it susceptible to political meddling. Thus, the options that you mentioned - adjusting other taxes and spending to result in a net-neutral budget - are exactly what should NOT be done as part of carbon tax legislation. A direct refund to the people of all the carbon taxes collected would be the most straightforward way of ensuring that the tax remains revenue neutral. I would strongly be in favour of a progressive dividend to offset the anticipated regressiveness of the tax (perhaps something similar to the GST rebate that we have in Canada), however if a flat dividend is the only thing that is politically feasible, then so be it. I think it’s more important to get carbon pricing in place ASAP and make adjustments afterwards, then to continue to be at an impasse trying to get a perfect plan in place from the start.
Kinda sad that we had to wait for the fossil fuel industry to get behind ideas like that when they still continue to finance a party that still does not get it. (from last June)
There is more hope now with the recent change in the House, but there is still a lot to be done, the weakest link still consists of lot of Republicans.
The Austin skyline of the future with canyons of glass hangs within reach. In a city that rewards residential solar and never met a corporate sweetheart deal it didn’t like, making more affordable a measure that benefits them and us, for a change, sounds pretty inviting.
I think we should debate optimal policies and hope for leadership to pursue them, rather than limit ourselves to what some might consider “politically feasible.” If only “feasible” policies were on the table, women wouldn’t have gotten the right to vote, the Civil Rights Act of 1964 would never have passed, and gay marriage would still be outlawed.
On top of which, I’m still taken aback by the apparent belief that using revenues from a new tax to reduce the trillion-dollar deficit would be another example of liberal over-reach! Let me ask those delighted with the huge deficits of Dubya and Trump: If a trillion-dollar deficit in a time of prosperity is good, would you like a 2 trillion dollar deficit even better?
Of course I would not support a carbon tax in isolation with no other tax code changes. A carbon tax is very regressive; this would have to be compensated by less regression elsewhere. I’ve already mentioned my proposal: Reduction in payroll taxes at the lower income levels.
But changes should be evaluated on their own merits. If deficits are really so wonderful than, sure, pair the $300B carbon tax with $800B in more tax cuts and pump the deficit to 1.5 trillion. If we’d rather reduce the deficit then, couple the $300B carbon tax and $300B SocSec rebate with a $300B income tax hike to reduce the deficit. But don’t pretend that one change necessitates an unrelated change. Changes should be evaluated on their own individual merits.
Finally, for those who think I must be a Stalinist to mention the possibility of reversing the tax cuts for the super-rich, recall that Andrew Carnegie became “the richest man in the world” in 1901 when he sold out to J.P. Morgan’s U.S. Steel Corp. and was suddenly worth $300 million. Those were 1901 dollars of course, but using a standard C.P.I. adjustment that’s still less than $8 billion in 2019 dollars. Google to see what Jeff Bezos is worth today. The Walton or Koch families are worth far more today than the Vanderbilt or Astor families were ever worth, even with the C.P.I. adjustment. The persecution of America’s billionaires that those on the right-wing fret about so much today is … exaggerated.