Four Republicans Propose a Fee on U. S. Carbon Sources

Summary.  Four former Administrators of the U. S. Environmental Protection Agency, all of whom served under Republican presidents, are urging the members of the U. S. Congress to overcome partisan divisions and pass meaningful legislation to combat global warming.  They state that science clearly shows the planet is warming, and point out that further inaction is harmful because the window of time remaining for action is shrinking.  They observe that President Obama’s Climate Action Plan is noteworthy and should be endorsed by the Congress.  Additionally they propose a fee on use of carbon fuels as an effective means for abating the rate of emissions and consequent worsening of global warming.  Here, we present an example of the effectiveness of a tax on gasoline fuel in reducing consumption.

Carbon dioxide accumulates in the atmosphere, once emitted, and remains for very long times without being removed by natural processes or human technology.  Therefore it is necessary to reduce the rate of emissions in order to keep the accumulated level as low as possible, and limit the harms wrought by excessive global warming.  The fee on carbon use proposed by the Administrators goes a long way to accomplishing this goal.

 

Introduction.  Over the past few decades the United States has never enacted a legislated national energy policy to combat global warming.  Since the late 1990’s plans operating around the world at the international, multinational and national levels to curb the release of greenhouse gases (GHGs) have been implemented.  Prominent among these was the Kyoto Protocol, an international agreement among industrialized countries negotiated under the United Nations.  These programs have been undertaken recognizing that human activity is responsible for the accumulation of GHGs and that the world’s nations must work together to mitigate the rate of emissions and the total accumulated level of GHGs in the atmosphere.  The U. S. Senate, in contrast, rejected American participation in the Kyoto Protocol.  Only in recent years have certain American states, individually or by interstate regional agreements, embarked on policies to reduce GHG emission rates.  (Please find a Summary of Historical Developments in the previous post.)

In the absence of Congressional action, President Obama presented his Climate Action Plan in June 2013.  It contains a large number of specific initiatives grouped as cutting carbon pollution, protecting the country from the impacts of global warming, and working internationally to fight global warming.  Some of the policies can be implemented by executive action, whereas others require budgetary action by the Congress.

This post describes a proposal for a fee on carbon sources set forth by four prominent Republicans (i.e., members of the more conservative of the two U. S. political parties) with strong credentials in setting environmental policy.

Four Republicans, all former Administrators of the U. S. Environmental Protection Agency (EPA), propose a fee on carbon-containing sources of energy.  They all were appointed by Republican presidents.  Their proposal appeared in the New York Times on August 2, 2013.  The former Administrators are William D. Ruckelshaus, who served from the founding of the EPA in 1970 under Republican President Richard Nixon to 1973, and again from 1983 to 1985; Lee M. Thomas, who served from 1985 to 1989; William K. Reilly, who served from 1989 to 1993; and Christine Todd Whitman, who served from 2001 to 2003.

The Administrators write:

“…we have a message that transcends political affiliation: the United States must move now on substantive steps to curb climate change, at home and internationally.

“There is no longer any credible scientific debate about the basic facts: our world continues to warm….

“The costs of inaction are undeniable. The lines of scientific evidence grow only stronger and more numerous. And the window of time remaining to act is growing smaller: delay could mean that warming becomes ‘locked in.’

“…President Obama’s June climate action plan lays out achievable actions that would deliver real progress….

“Rather than argue against his proposals, our leaders in Congress should endorse them and start the overdue debate about what bigger steps are needed and how to achieve them — domestically and internationally.”

The Administrators declare that the most effective way to reduce greenhouse gas emissions is to use market-based approaches, such as a fee on carbon, to provide the incentives to migrate away from use of carbon-based fuels.  As alluded to in the quotes above, they recognize that the present political climate in the U. S. Congress makes this an unrealistic policy to promote.  They support the administrative and legislative policies promoted by President Obama in his energy policy speech as a meaningful strategy in the absence of Congressional action.

The Administrators conclude

“More will be required…we must continue efforts to reduce the climate-altering pollutants that threaten our planet. The only uncertainty about our warming world is how bad the changes will get, and how soon. What is most clear is that there is no time to waste.”

 

Analysis

It is highly significant in the U. S. policy setting that four Republican Administrators of the EPA, serving under the Republican presidents Richard Nixon, Ronald Reagan, George H. W. Bush and George W. Bush, have come together to urge taking strong legislative action to combat global warming.  They understand the indisputable scientific imperative that global warming constitutes a major threat to the wellbeing of the planet.  They recognize the need to “transcend” political differences.  They urge immediate action because “the window of time remaining to act is growing smaller”.   Finally, they realize that President Obama’s announced policy, while making worthy steps to combat global warming, still requires the forceful action that a legislated policy, such as a fee on carbon, would generate.

Climate scientists have shown incontrovertibly that a) atmospheric concentrations of greenhouse gases, especially carbon dioxide (CO₂), have been rapidly increasing since the start of the industrial revolution; b) the growth in CO₂levels is due to mankind’s burning of fossil fuels for energy; and c) the greenhouse effect from these greenhouse gases produces increases in the long-term global average temperature, as well as drastic decreases in the number of extreme cold days coupled with profound increases in the number of extreme hot days.  These temperature extremes lead to extreme weather and climate events that are harmful to those who are affected by them.

CO₂ is a waste product whose costs are not reflected in the purchase price that we pay when we use fossil fuels.  Our purchases compensate fuel companies for the costs involved in extracting and marketing fuels, and include profit accruing to them for their efforts.  But the costs of dealing with its waste, namely CO₂, are not included; the cost of this waste constitutes an “externality” that fuel companies do not charge us for.  On the other hand, there are examples in our daily life where we, the consumers, are directly charged for the costs of waste that we generate.  These include garbage removal and disposal, and waste water treatment.  Our use of fossil fuels should follow the models given by examples such as these.  A fee on carbon use would accomplish this.

Global warming induces extremes of weather and climate that adversely affect human wellbeing and socioeconomic state as a result of the calamities that result.  The Administrators point out that at a time in the near future which cannot be predicted with certainty, the Earth’s climate system could reach a point at which greenhouse warming creates reinforcing effects that promote even more warming.  This underlies their caution that warming could become “locked in”.  In addition, climate scientists point out that the longer we wait to begin meaningful abatement measures, the more intensive, and expensive, such measures will necessarily be to make up for lost opportunities.

In reaction to such unpredictable events governments and other social structures are called on to spend vast amounts of money to repair damage and restore facilities.  They also react by undertaking extensive preventive infrastructure projects that were unforeseen before devastation struck.  It thus makes economic and sociological sense to minimize the effects of global warming by combating its causes, i.e., by migrating away from use of fossil fuels as fast as possible.

The Administrators recommend a market-based mechanism for accomplishing this, and suggest a fee on use of carbon fuels for this purpose.  A carbon fee is highly efficient and effective in reducing use of fossil fuels.  It is simple to administer, and leads, for example, to striking increases in efficiency and decreases in fuel use when it is applied as a tax on gasoline fuel for motor vehicles. The graphic below

Sources: New York Times presenting data from the U. S. Department of Energy and the World Bank; http://www.nytimes.com/interactive/2012/09/11/business/Fuel-Taxes-and-Consumption.html?ref=business

 

shows that per capita use of fuel for driving decreases as the size of the gas tax increases.  The U. S. has the lowest gas tax correlated with the highest amount of fuel used per capita. In Great Britain, on the other hand, the gas tax is about US$3.95 per U. S. gallon (but it is seen from the graphic that a similar increase in efficiency can be obtained at a much lower tax level of about US$2.20 per U. S. gallon).  Ford, the American car maker, sells a model of its compact Focus there whose efficiency is 72 miles per U. S. gallon.  A Focus model sold in the U. S. gets only 33 miles per U. S. gallon.  

 

Conclusion

 

Former EPA Administrators Ruckelshaus, Thomas, Reilly and Whitman all served in the administrations of Republican presidents.  They have come together to urge the members of the U. S. Congress to move beyond partisan posturing and unite behind meaningful legislation to combat global warming.  They point out that the science underlying global warming is incontrovertible, that the time for significant action is shortening, and that legislative action is required, for example to set up a fee for use of fossil fuels.  Their sentiments are reasoned and convincing, and should be acted upon as soon as possible. 

The status of the global climate worsens with each day of inaction.  That loss cannot be recovered at a later date because CO₂ emissions, on the time scale in question, remain in the atmosphere and accumulate higher and higher.  We in the U. S., independently and in concert with other major greenhouse gas emitters, must act as soon as possible to keep the accumulated CO₂ level as low as possible going forward.

© 2013 Henry Auer