Big Green savages Dingell’s carbon tax
“Man always kills the thing he loves,” wrote naturalist Aldo Leopold in the environmentalist bible, A Sand County Almanac. Leopold was referring to Americans’ destruction of the wilderness, but he could have been describing the green establishment’s hostile reaction to the “hybrid carbon tax” proposed by Michigan Rep. John Dingell last month.
Dingell’s tax package, combining a carbon-busting tax on fossil fuels, a surtax on gasoline and jet fuel, and a phase-out of subsidies for sprawl homes, should have been greeted by environmentalists like the Second Coming. Extrapolated to 2025, the carbon tax alone would cut annual CO2 emissions by 1.3 billion metric tons (a sixth of current emissions) and curb U.S. oil usage by 2.8 millions barrels a day (mbd). With Dingell’s petrol surcharge, the savings swell to nearly 1.6 billion metric tons of CO2 and 4.5 mbd, more than the entire oil output of Iran.
Further savings would come from abolishing the tax-deductibility of mortgage interest on houses larger than 4,200 square feet, a loophole that has underwritten millions of McMansions on America’s SUV-crazed exurban fringe. (Smaller houses down to 3,000 square feet would also lose some deductions, on a sliding scale.) Taken as a whole, Dingell’s proposal would be a giant step toward what Friends of the Earth terms “decarbonizing the tax code.” It would also embody the cardinal sustainability precept that keeps Europe’s carbon footprint at half of ours: energy prices must tell the truth, even if it requires taxing fuels.
Alas, with the lone exception of FoE, leading Big Green groups have gone after Dingell’s proposed bill like a clear-cutter on crank.
Sierra Club executive director Carl Pope lambasted Dingell for deliberately advancing a strategy “designed to fail” that would torpedo “the most popular mechanism for reducing oil consumption — tougher fuel economy standards” for automobiles. Greenpeace accused Dingell of spewing “empty rhetoric that keeps the House of Representatives from enacting global warming solutions” such as stronger CAFE standards. To drive home the point, Greenpeace staged a press event in which it converted Dingell’s district office parking lot into a mock car dealership selling gas-guzzling “Dingell Destroyers.”
The backstory here is Dingell’s history of obstructing car fuel-economy standards. As longtime chair or ranking Democrat of the House Energy and Commerce Committee, Dingell has always resisted raising standards or extending them to SUVs and pickups. Nor has the diabolically crafty Dingell helped his credibility as a carbon taxer with repeated warnings that “the American people [aren’t] willing to pay” what it will really cost to stop disastrous climate change.
Still, the Sierra Club et al. ought to be able to distinguish the message from the messenger, and even if Dingell is a flawed, albeit powerful, messenger, carbon-busting tax reform is certainly the right message. But strangely, the green establishment is so wedded to CAFE that it has blinded itself to the far greater power of Dingell’s carbon tax.
As estimated by the authoritative American Council for an Energy-Efficient Economy, by 2025 the “preferred” Markey-Platts CAFE bill (H.R. 1506) would be saving 340 million metric tons of CO2 and 2.5 mbd of oil — not chicken feed, but only one fourth and one half, respectively, the reductions I calculate for the Dingell hybrid carbon tax (assuming that the annual tax ramp-up proposed for the first five years continues indefinitely). Moreover, most of the gasoline savings under the carbon tax would come from reductions in driving that would confer huge ancillary benefits such as less highway congestion, fewer crashes, and more walking and biking, whereas under Big Green’s CAFE route, vehicle miles traveled would actually increase as driving became cheaper.
The crackpot realists of Big Green, as C. Wright Mills might have branded them, reply that a carbon tax is politically unsalable and won’t be needed once Congress “puts a price on carbon” by enacting a carbon cap-and-trade system. The dirty secret here is that the cap-and-trade proposals now in vogue are much loved by special interests who see limitless possibility for “gaming” the system, and Big Green has an equally limitless appetite for “allies” among the corporate elites. There is no other possible explanation for Big Green’s deafening failure to make hay of last week’s Nobel Prize announcement: peace laureate Al Gore is the planet’s best-known carbon tax advocate. Indeed, Gore used the occasion of his testimony before Dingell’s House Committee last March to reiterate his call for replacing the regressive, anti-jobs payroll tax with a tax on carbon emissions.
Needless to say, a carbon tax and regulatory mandates like CAFE aren’t mutually exclusive. In fact the higher pump prices from Dingell’s hybrid carbon tax would add to, not detract from, political pressure to broaden and strengthen mileage standards.
Perhaps the environmental establishment will get its way and Congress will pass a CAFE bill while continuing to ignore the growing calls for taxing carbon. In that event, what enviros will brand a home run will in reality be more like an infield single, and the principle of reflecting climate damage and other “externality costs” in energy prices will continue, like the proverbial elephant in the parlor, to be studiously ignored.
“What good are forty freedoms without a blank space on the map,” Aldo Leopold wrote, just before mid-century. It’s difficult to match that eloquence. But in our own latter-day, wonky way, we might best follow Leopold’s example by asking: What good are mileage standards, LEED certificates, renewable-energy quotas, and the rest of the fiddly patchwork of energy mandates without carbon taxes to inform and influence billions of individual and social decisions every day to reduce fuel use and, collectively, transform the U.S. into a truly energy-conserving society?