Former Cabinet members of Presidents Ronald Reagan and George H.W. Bush, James Baker and George Shultz, penned a recent column in The Wall Street Journal explaining the proposal.
They wrote that while the extent to which climate change is due to “man-made cause” can be questioned, the risks associated with future global warming are “so severe that they should be hedged.”
CLC advocates believe their methodology is more of a blanket insurance policy that more effectively addresses climate change. They reject the “heavy-handed, growth-inhibiting government regulations” approach from President Barack Obama’s time in the White House and coming from Gov. Jay Inslee in our state. Instead, they are proposing a market-based system with limited governmental directives.
CLC’s plan has four pillars.
First, it creates a gradually increasing carbon tax that could start at $40 per ton. If that sounds similar to the I-732, which our state’s voters rejected last November, it is. But that is where the similarity stops. Remember, it is a national, not a state, carbon tax.
The second pillar is new.
Money collected from the carbon tax would be returned to Americans as a dividend. That dividend would offset higher energy and product costs from the carbon tax. CLC estimates a family of four could receive a $2,000 dividend in the first year alone.
CLC leaders believe their proposal encourages innovation in existing energy companies and auto and truck manufacturers, which now rely heavily on carbon-laced fuels. They believe their plan provides predictability for utilities and manufacturers attempting to navigate the myriad of complex rules and regulations currently in place at federal and state levels.
A third CLC pillar allows for border adjustments for the carbon content of exports and imports. It would protect American competitiveness and punish free-riding by other nations which do not address carbon emissions.
Here is how it works.
American companies exporting to countries without comparable carbon taxes would receive rebates for carbon taxes they paid. On the other hand, imports from those nations would face fees on the carbon content of their products. Those import fees would be returned to our citizens in the form of a larger dividend.
The fourth pillar is regulatory relief. Baker and Shultz believe the EPA’s carbon dioxide regulations inhibit growth and should be phased out. A key result would be fewer lawsuits.
CLC backers hope to build bipartisan consensus. They believe the key is to carefully roll back regulations, tie the initial carbon tax rate to the level of current regulations and return dividends to people and not fill government coffers.
If CLC projections are correct, the Treasury Department calculates the bottom 70 percent of Americans come out ahead. They are our citizens who can least afford to simply absorb the higher costs of products, electric and gas heating bills, and higher prices at the gas pump.
Their proposal deserves serious consideration because change best occurs when people have incentives to try something new.
Don Brunell, retired as president of the Association of Washington Business, is a business analyst, writer, and columnist. He lives in Vancouver and can be contacted at TheBrunells@msn.com.
