Playing to lose: Dingell proposes carbon tax

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In an odd bit of policy jujitsu, Democratic congressman John Dingell has promised to introduce carbon tax bill that he hopes will fail. Dingell is counting on the public outcry against any sort of new tax to make the currently trendy topic of climate change as politically radioactive as he’d like it to be.

Dingell is chairman of the House Energy and Commerce Committee. He also represents Detroit, and has been a long-time thorn in the side of those seeking to curb carbon emissions. Environmental groups are not amused by Dingell’s gambit. They fear he is right that citizens will reach for their pitchforks and torches as soon as the “t” word is uttered. All the hard-won momentum for meaningful action on climate change could quickly evaporate.

In response to the kerfuffle, Dan Drezner asks a relevant question:

[Environmentalists’ response] raises a big-ass warning flag for those of us in the squishy middle who are genuinely concerned about global warming but are also concerned about the overall costs of dealing with it (not to mention the distribution of those costs). If Dingell is downplaying the benefits of reducing global warming, to what extent are environmentalists… downplaying the costs of reducing greenhouse gas emissions? As far as I can figure, cap and trade systems differ from tax systems in that they are a) less effective; and b) more opaque in distributing the costs. Sure, Dingell is playing politics, but…he’s not doing it differently from environmentalists.

In the abstract, I see some validity to this. Carbon taxes and cap-and-trade systems are far more similar than they are different, and it’s a shame that so much of policy discourse is driven by a Pavlovian fear of the word “tax.” Far better if such semantic sleight-of-hand could be set aside in favor of a discussion of the costs and benefits of different proposals.

In the real world, though, this exact game has played out in every policy battle since the beginning of time: you tout the benefits of your favored policy, minimize the negatives, and attempt to cobble together a winning coalition of interest groups. Environmentalists had better be able to play this game, because their antagonists have certainly learned its rules well. Policy debates are not won or lost on a spreadsheet analysis.

Further, from his position in the squishy middle, Drezner would surely be forced to concede that there’s been something of a scruple mismatch between the various parties to this debate. Opponents of climate change legislation haven’t so much “downplayed” the costs of climate change as denied, ridiculed, and lied about them. Advocates of carbon constraints, on the other hand, have been fairly honest about economic impacts.

It’s impossible to say how Dingell’s bit of political theater will play out. Sadly, I suspect that his intuitions are right. Which just means that environmentalists are going to have to get more cagey about the politics of climate change, not less.

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adam

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  1. richard schumacher - July 11, 2007

    Perhaps some people have not noticed yet, but saving the world from global warming while providing new carbon-neutral energy sources for developing nations *is* going to be expensive. The only thing more expensive in the long run would be not doing those things.

    So call his bluff: write him and thank him for farsighted leadership on a difficult issue, which is the hallmark of statesmanship. The expense of a carbon tax can be offset by greatly expanding our use of low cost nuclear power.

  2. 2Wheels Good - July 11, 2007

    I don\’t know about cap and trade being less effective. It may be more efficient than a tax with “command and control” approach to reduce emissions NOW to a defined lower level at least cost. Stepping down over a number of years to whatever level of net CO2 emissions is considered “safe”. However a carbon tax would be more useful to spur investment in longer-range technology that the market cannot yet justify based on their (short time horizon) profit motives within corporations.

    I\’ve found that this Environmental Economics blog has useful and balanced discussions:
    http://www.env-econ.net/

    The bigger question is, how do we take this guy\’s game of “Chicken” and, use his (fake, off-balance) movement in the positive direction to throw the regime forward and start doing something to reduce US carbon emissions? I tend to agree– grab his hand to shake it, and pull him forward toward the green side. That would be progress from an unlikely sponsor– I understand that Dingell is married to a GM executive!

    And if Dingell is exposed as being the hypocrite in the end from this gambit, all the more valuable to his constituents who can vote him out next time. The GM Head in the Sand approach he\’s sponsored won\’t work for the US in the future. It\’s time to lead or step aside.

  3. frank - July 11, 2007

    Dingell is an environmentalist, but he is also a pragmatist and well seasoned politician. What chance would the “ideal” agenda have to get through the house, senate and Mr. Bush?
    Environmentalists have to do much more work on voters and corporations. Politicians don’t vote in a vacuum.

  4. Adam Stein - July 11, 2007

    Not sure I’d call Dingell an environmentalist, but it is true that the reason he takes these positions is that he is responding to his constituents. He represents Detroit, and automotive industry employees are not eager to see any sort of caps placed on fuel usage.

  5. bo - July 11, 2007

    as soon as i read about this , i contacted my representative and asked her to call his bluff and support the proposal . i then got on myspace and posted a bulletin asking everyone to do likewise and to repost the bulletin

  6. AJ - July 11, 2007

    Yes, I agree. Let’s support Dingell’s call for carbon tax legislation. I just emailed the Committee on Energy and Commercel in support of a statement Dingell made on June 27, 2007 regarding the comprehensive climate change legislation that is scheduled for Fall 2007: “We need to put everything into the discussion, whether it is politically salable or not. Yes, that means a mandatory cap and trade system, and some form of carbon emission fees” (http://energycommerce.house.gov/Press_110/110st64.shtml). Dingell’s June 27 statement seems to open the door for possible carbon tax legislation without the anti-tax rhetoric found in the July 7 NY Times article. Let’s keep voicing our support for carbon tax legislation that includes an honest discussion of the related carbon emission costs (both production and reduction, e.g., taxes).

  7. frank - July 12, 2007

    Adam, Dingell is an environmentalist. This is from today\’s Detroit Free Press editorial (which also supports a carbon tax.)

    “Dingell said by phone Wednesday that a gas tax would likely be phased in, and carbon tax revenue would be distributed among Medicare, Social Security and various conservation funds. “Truthfully, I believe this is the way to go, and I\’m willing to lose some skin over it,” he said. But he expects fierce opposition.

    I am a retired DaimlerChrysler executive, active environmentalist and support a strong CAFE. (My pension and healthcare benifits depend on their servival!) 57% of Michigan residents support strong CAFE. We are not of like mind.

  8. Adam Stein - July 12, 2007

    Hi Frank,
    Glad to know about Michigan’s support for higher fuel economy standards. I confess ignorance of Dingell’s overall environmental record, although I do know he’s angered a lot of environmentalists over CAFE. If he is in general a good actor on green issues, I’m happy to hear it.
    – Adam

  9. Ross - July 12, 2007

    Thanks for Dingell’s statement, AJ. The best idea I’ve heard on this is to do a carbon tax, but make it revenue-neutral (rhymes with carbon-neutral). Just reduce, say, employment taxes by the same as we raise through the carbon tax. All employees and employers alike would benefit from lowering this tax. Or instead, send every American with a SS# an annual refund check, like Alaska does with it’s permanent dividend fund.
    This puts a price on carbon, while shifting the tax burden so the average American pays no more than before. There will be devils in the details — not everyone will break even on this (I’m looking at you, big coal). But those who are willing to reduce their emissions would actually come out ahead, along with poor folks (assuming they consume less fossil fuel than my boss-who uses an Escalade to commute 80 minutes each day, true story).
    Finally, when considering hidden costs, we should also consider the cost of implementing cap-n-trade vs. carbon tax. We already have the system in place for a tax, since the govt. collects taxes on most sales, while cap and trade would require the creation of an entire new infrastructure for accounting, monitoring, and enforcement.

  10. disdaniel - July 12, 2007

    People (including politicians) don’t object to taxes in theory. They object to actually paying taxes.
    The benefit of creating a carbon tax is that there are a hundred things everyone can do to reduce their tax tab.

  11. Ben Keeler - March 22, 2008

    Interesting theory. Not sure I buy it, but interesting nonetheless.