The unfortunate truth about a carbon tax

Climate policy is back in the headlines. This time, it's a Republican proposing a solution to America's problematic greenhouse gas emission levels.

Last week, Rep. Carlos Curbelo (R-Fla.) proposed a tax of $23 per metric ton on carbon emissions. Conservative economists and right-wing elites have long tantalized liberal climate activists by suggesting they'd be on board with such a tax. That's made the policy something of a great white whale for bipartisan climate reform. Curbelo himself hails from a Florida district that Hillary Clinton won in 2016, so he clearly sees this as a way to appeal for his political survival.

But even if this carbon tax were to be approved, it wouldn't be nearly enough to truly tackle climate change.

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Curbelo's carbon tax would begin at $23 per metric ton in 2020, and would increase by 2 percent per year above inflation after that. If certain reduction thresholds aren't met in a given year, the bill would jack the carbon price up an additional $2 the following year. It would apply to oil, natural gas, and coal, as well as to other chemical and manufacturing processes that release CO2 in industries like steel, aluminum, cement, and glass. In a nod to his fellow Republicans, Curbelo has made it so that his bill would put the EPA's carbon emission rules on hiatus while the carbon tax is in effect.

How much would this policy actually reduce carbon emissions? At least one model projects it could bring emissions down to 30 percent below 2005 levels by 2032. Curbelo himself points to research from Columbia that suggests a cut between 27 and 32 percent by 2025, and a reduction of as much as 40 percent by 2040. As the Congressman himself likes to note, this would actually go beyond than the goals President Obama set in the Paris Agreement.

But we've allowed the climate problem to fester so long that even that isn't nearly enough.

Scientists say the world can only warm by 1.5 to 2 degrees Celsius without becoming dangerously hot. To stay within those limits, the world would need to eliminate all carbon emissions by around 2070 and find a way to suck carbon out of the atmosphere at the same time. Without that second step, we'd probably need to zero-out emissions by much sooner, probably by 2050.

Curbelo's bill doesn't even come close to facilitating these goals. Research suggests that even much more aggressive carbon taxes wouldn't be sufficient, especially as other big emitters, China in particular, continue to spew carbon into the atmosphere. One piece of analysis says China's emissions will rise faster in 2018 than in the last seven years.

Not only is Curbelo's bill insufficient, it also fumbles the key offsetting policy that could make it palatable. Indeed, a carbon tax is likely to be very unpopular with Americans as a whole because it will hit them where it hurts: their wallets. Such a tax is meant to price in the future damage of climate change so we shift to buying more green energy. Yes, renewables are dropping in price fast, which will make the transition less painful, but there's no way to avoid a regressive hit to Americans' wallets. The only way to really fix the problem is to simply remit all the revenue as an equal per person check to all Americans. Any other mix of revenue uses will almost certainly mean higher net costs for the bottom half of the population. But the most Curbelo's bill would do is dedicate about 10 percent of its revenue to grants to states to help low-income families.

One possible alternative here in the U.S. is to marry a carbon tax with a big government push to just build out green energy systems directly. This would inherently function as infrastructure investment, "probably the only issue that [President] Trump and [Democratic nominee Hillary] Clinton agreed on in 2016," as Curbelo put it. To that end, his bill dedicates some of the revenue to green energy investment — but not a whole lot of it. It would be very, very far removed from the idea of a "Green New Deal" that's forming on the Democrats' populist left flank.

Ultimately what we'd want is the most aggressive carbon tax passable, with all of its revenue returned to Americans via the per-person dividend. Plus a separate — and very, very big — green energy infrastructure bill, with its own separate source of financing. But such an approach would never pass on bipartisan terms, even though joining forces across the aisle is the whole point of Curbelo's bill. All but six House Republicans recently voted for a resolution (a statement of principles rather than a bill) declaring that "a carbon tax would be detrimental to the United States economy … [and] to American families and businesses." An aggressive carbon tax coupled with a revenue scheme would only pass if Democrats regain sweeping control of the legislature and the White House, and basically jam the package through over unified GOP opposition.

At best, Curbelo's bill is serving more as a conversation starter than legislation with serious chance of passage. A grand bargain on climate policy remains elusive as ever. Meanwhile, America — and the world — goes deeper down the carbon emissions hole.