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WILLIAM TUCKER: Why It’s Time to Solve Everything with a Carbon Tax

By William Tucker

Alright, here we go again.  The last time I wrote this column, it was the only time in 25 years I’ve had a piece rejected by The American Spectator.   The editor, Wlad Pleszczynski, whom I dearly love, told me Mitt Romney would be “committing political suicide” by supporting a carbon tax late in the campaign.  As it turned out, I think Romney cut his own throat by not supporting a carbon tax.  When Hurricane Sandy hit the last week of the campaign he was caught flatfooted, so that even Mayor Michael Bloomberg switched his allegiance to Obama.  For ignoring climate issues, Romney got a handful of votes in coal country and that was it.

But now things are headed for another denouement and it’s on the other side of the ledger, in President Obama’s court.  To be truthful, I can’t think of a more difficult issue a President has faced in recent years, on the domestic side at least, than the Keystone Pipeline.  The President is absolutely caught on the horns of a dilemma.  He’s managed to convince people that he’s a big supporter of oil and gas development – even though nearly all the new supplies have come from private land and outside federal control.  But he’s got that illusion to maintain.  At the same time, his environmental supporters will never, never forgive him if he approves Keystone.  Bill McKibben, James Hansen, Michael Brune of the Sierra Club – they’ve all laid down the gauntlet.  The Sierra Club has already promised civil disobedience for the first time in its 120-year history.  Brune crossed the line last Friday by chaining himself to the White House fence and being arrested – along with various movie stars and celebrities.  So what’s Obama to do?  Can he possible approve the pipeline and alienate all his upper-crust support?  

In a way, it’s surprising this has taken so long to happen.  Somehow the old labor-union-based, blue-collar base of the Old Democratic Party has managed to co-exist with its new, college-based intelligentsia for several decades now without ever coming face-to-face over their differences. They both “hate Big Business” (and therefore Republicans) but for different reasons.  The working class hates Big Business because it doesn’t share the fruits of their labor.  Environmentalists hate Big Business precisely because they generate those fruits.  They want to slow the whole industrial juggernaut to a crawl and go back to living on homegrown vegetables and granola.  The intelligentsia is constantly spinning slogans to create the illusion that both are on the same side.  “Worker Power, Not Nuclear Power” is one old bumper sticker I remember.  Imagine that.  Let’s close down all the power plants and go back to doing things with sweat and muscle.

This time, however, there aren’t any slogans that can paper things over.   The choice is too stark.  Are we doing to risk pushing Canada into the arms of China?  (The Chinese are already gobbling up Alberta oil companies and will probably build a pipeline to the Pacific as well.)  Or will we risk having radical environmentalists sabotaging a 1000-mile pipeline.  (Don’t think it can’t happen, or that there aren’t people already willing to try.)

Well, here’s another possibility.  How about President Obama offer the following compromise:  “I’ll permit construction of the Keystone Pipeline in exchange for a carbon tax.”  

Alright, let’s count the people who are going to opposed this.

First, Republicans.  Anything that has the word “tax” in it automatically wins their opposition.  This is the reason the Obama Administration wasted two years trying to force cap-and-trade through Congress instead of settling for a much simpler-to-administer carbon tax – because of the word “tax.”  (Europe’s collapsing cap-and-trade system, which may go under in a Parliamentary vote this week, illustrates just how badly cap-and-trade would have worked.)

Republicans will scream that a carbon-tax will cripple the economy and turn us into a Third World country.  Senator Ted Cruz will promise to lie down in front of a railroad train somewhere.  But is it really that bad if made part of a comprehensive tax reform.  Our corporate taxes are now the highest in the world.  The Administration constantly foments the illusion that the rich can pay for everything.  The beauty of a carbon tax is that it would be spread across the economy without impacting any one sector too severely.   Sure, the coal industry is going to suffer.  But is the coal industry not going to suffer under the EPA’s current strategy of “take them out one at a time?”  A carbon tax, if coupled with the reduction of other taxes, won’t necessarily grow the government.  If Republicans can’t secure that in a compromise package, they might as well go home.

Second, environmentalists.  They have drawn the line in the sand over Keystone.  But wouldn’t they prefer a comprehensive climate program to a one-shot deal?  What could be more to the point than a tax on carbon?  Sure, we’ll have heavy oil coming in from Canada, but it will come at a price.  And the EPA won’t have to go around the country nailing the doors on coal plants.  With a price incentive, utilities can weigh the advantages and disadvantages of coal and natural gas themselves.  And then there’s always nuclear.  The nuclear industry should be one of the biggest supporters of a carbon tax, except for two things:  1) many reactors are owned by utilities that also run coal plants, and 2) the nuclear industry commands only a very small constituency since, unlike coal and other fossil fuels, is doesn’t produce lots of jobs, just energy.

For more than 30 years, the press has given environmentalism a free ride in the press.  Criticizing the Sierra Club or Friends of the Earth is worse than criticizing motherhood – it’s criticizing Mother Earth.  Yet at some point some enterprising reporter is going to do some legwork and discover that the movement has its own transgressions.  For instance, the Sierra Club and its West Coast partner the Center for Biological Diversity are currently suing Kern County CA to prevent construction a 300-megawatt wind farm on the grounds that it will be “destructive to the environment.”  Huh?  Aren’t the Sierras supposed to be in favor of wind?  Well, only, it turns out, when it comes to opposing something else.  The same coalition also defeated the Green Path North, a transmission line designed to bring desert solar and wind electricity into Los Angeles.  Environmentalists are allowed to play this shell game only because the press is willing to look the other way.

So a carbon tax in exchange for approval of the Keystone Pipeline would satisfy exactly no one – which might be its best recommendation.  It would force everyone to give up their extreme positions and accept the good in place of the perfect.  For once, everybody in Washington might find themselves on the same side.  Now wouldn’t that be something!