There’s not gonna be a carbon tax
The idea of a carbon tax is going through one of its regular cycles of hype and excitement. This time, it’s being pitched as part of a “grand bargain” meant to address the long-term debt (which isn’t a real problem) and avoid the “fiscal cliff” (which isn’t a real cliff). Bloggers Matt Yglesias and Ezra Klein are on board, as is the editorial board of The Washington Post and an op-ed writer in The New York Times. There was briefly a rumor that Obama was considering it, fueled by some random dude at HSBC Holdings, a bank in the U.K., but the administration has denied any such plans.
The hype has reached such an intensity that when the Sith Lord of Republican politics, Grover Norquist, said last week that a carbon tax wouldn’t necessarily violate his sacred anti-tax pledge (something he has said before), everyone went a little nuts, so much so that his organization, Americans for Tax Reform, had to issue a follow-up statement clarifying that, no, really, it “opposes a carbon tax and will work tirelessly to ensure one does not become law.”
Nonetheless, climate hawks remain excited that a policy they’ve come to see as their holy grail is being discussed in the context of solving America’s fake problem and avoiding its fake cliff.
So let’s be clear: It’s not going to happen.
There will not be a new carbon tax implemented as part of a deficit-reduction deal — not during the fiscal-cliff negotiations and not in the next congressional session. (Who knows what could happen after the midterms.) My green friends yell at me for saying this, say I’m cynical and if I clap harder it might have a chance. And I don’t discount the power of positive thinking. (I really don’t!) But this is not even close enough to the realm of reality to be worth pretending about. As the aforementioned Grover Norquist noted, “It’s a conversation about what color unicorn you’d like.”
Why won’t it happen? Because — and try to follow along here, because it’s pretty complicated, and this is coming to me from highly placed inside sources — Republicans run the House of Representatives and Republicans hate taxes.
Yeah, that’s really it. Remember:
[House Majority Leader John] Boehner spokesman Michael Steel had a one-word answer when asked, on Friday, whether the Speaker would ever consider a carbon tax to help address climate change and the deficit: “No.”
Sounds pretty definitive. Now, of course, Boehner could just be posturing in advance of negotiations. But right now the debate within the GOP caucus is whether to accept revenue from closing tax loopholes (not raising rates! never raising rates!) or … not accept any new revenue at all. That’s a long, looong way from “a bunch of new revenue from a brand new tax.”
“But wait,” you say. “A carbon tax is perfectly in line with conservative principles. It corrects a market failure. It doesn’t involve central planning. The revenue can be used to reduce distortionary taxes and slash the deficit. Conservative economists and wonks support it. Republican politicians ought to support it!”
I hear that “ought” a lot and I would encourage folks to think about it a little more. It implies that Republican officeholders are bound in some way by conservative principles. If you can show that a policy follows from conservative premises, or at least doesn’t contravene conservative principles, the thinking goes, Republicans are obliged to accept it.
Why would you believe that? It doesn’t fit the behavior of today’s Republicans when they’re in office. It doesn’t fit the behavior of any political party, ever. Mature political parties are not primarily organized around ideas or principles. They are organized around constituencies. Will Wilkinson puts it thusly:
America’s two mainstream political parties are not actually very ideological. They continue to exist as competitive parties because they are doggedly devoted to the service of their constitutive jumble of interest groups. Philosophy in mature party democracy serves a mainly rhetorical, public-relations role. If you wish to understand the real choice between Mr Obama and Mr Romney, try to look past their parties’ branding campaigns and look instead to history and the make-up of each party’s coalition.
I think that’s a bit reductive, but it’s closer to the truth than the naive notion that parties represent sweeping, coherent sets of principles.
The fact is, today’s Republican Party contains Big Oil, Big Coal, Big Sprawl (road builders, real estate developers, etc.), Big Ag, rich people, and suburbanites. Every one of those constituencies is deeply invested in the continuation of the fossil-fueled status quo. It wouldn’t matter if Friedrich Hayek himself descended from the heavens on angel wings to sing the carbon-tax gospel. Republicans are going to do what their constituencies tell them (and pay them) to do.
That means they’re going to shield fossil fuel companies from new taxes. They’re going to protect fossil fuel subsidies. They’re going to support new subsidies and new leases of public land for fossil exploitation. They’re going to fight against regulations of fossil fuels or factory farms or exurban development. They’re going to support building more roads and export terminals.
Those positions will often be sold with the rhetoric of free markets or American greatness or various other branding slogans, but they’re mainly about power and money. Occam’s Razor and all.
That’s why you have Republican governors advocating for the extension of the wind-energy tax credit right now. Not because they suddenly realized that tax credits are in line with conservative philosophy, but because some big wind-energy companies opened up in their states. Now they have wind-energy constituencies. Voilà.
That’s politics. If there is ever going to be a carbon tax, it will be because there is a constituency or constituencies powerful enough to demand it — and powerful enough to offset the contrary demands of several other constituencies. That’s what the whole messy cap-and-trade fight of 2009-2010 was: an attempt by Dems to beg, bribe, and stitch together enough counter-constituencies to overcome resistance. (You’ll note that self-righteous greens hounded and condemned them throughout that effort.) Getting a carbon tax passed would involve the same thing. It won’t be easy, but that’s the bar that has to be cleared.
From where I’m sitting, we don’t have anything close to that kind of constituency for a carbon tax in the U.S. And it’s unlikely to materialize in the next two years, much less the next two weeks.
So, like it or not, David Biello is probably right. What action there is on climate in Obama’s second term will be more of the same: nibbling around the edges via EPA and other regulatory tools, doing what can be done without Congress.
“But David,” you’re protesting. “In the wake of Sandy and an Obama election victory, shouldn’t climate hawks be ambitious? Shouldn’t they shoot for the moon? Set a benchmark for what counts a real action?”
Why yes! They should. But on substantive grounds, the kind of (fantasy) carbon-tax deals being discussed right now are already a compromise, already a trimming of sails. The mere existence of a carbon tax is not enough, in and of itself, to count as ambition on climate change.
More on that in my next post.
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