Llewellyn King: Trying to slow carbon emissions, from the right

In Hugh Lofting’s children’s stories about “Doctor Doolittle” there appears an imaginary creature resembling a llama, but with a head at either end of the body, so that it always faces in two directions at once. Called the pushmi-pullyu, it’s become a metaphor for contradiction.

U.S. energy-environmental policy, I submit, is characterized by this kind of contradiction. And make no mistake, energy policy is profoundly affected by environmental policy. Mostly, it’s the bit left over after the environmental constituencies have been satisfied.

The country’s energy-environmental policies are subject to a plethora of contradicting stimuli and restrictions that, while sometimes achieving their goal, cost the economy 1 percent a year, according to an analysis by EY, the global accounting firm. This on top of bad decisions — based on what can be gotten through the regulatory thicket not on what is needed, or what will benefit the environment — and endless delay.

Now a group of Republican stalwarts, who believe that climate change is happening and is caused by human activity, wants to do something about this pushmi-pullyu situation in energy-environmental policy. Their remedy: Substitute all the contradictions, preferments, subsidies, tax anomalies and self-defeating rules with a simple, revenue-neutral carbon tax.

These climate change-minded conservatives have created a Washington-based organization, the Alliance for Market Solutions. Its executive director is Alex Flint, a former staff director of the Senate Committee on Energy and Natural Resources, and a former senior vice president of governmental affairs at the Nuclear Energy Institute.

The backers of the alliance — rock-ribbed Republican business executives, academics and think-tank fellows — are committed to turning the GOP toward taking a positive stance on climate change. They believe that science has spoken, and the environment is the great existential threat facing humanity.

Among those who are throwing their experiential weight and financial resources behind the alliance are Jeffrey Williams, founder and chairman of the eponymous investment banking company; William Strong, chairman and managing director of the private equity firm Longford Capital Management; Marvin Odum, former chairman of Shell Oil; John Rowe, former chairman of Exelon Corp., and Stephen Wolf, former chairman and CEO of United and three other airlines.

These titans are joined by academics and public intellectuals including John Graham, dean of the Indiana University School of Public and Environmental Affairs, and administrator of the Office of Information and Regulatory Affairs in the U.S. Office of Management and Budget during the George W. Bush administration, and Christopher DeMuth, a distinguished fellow at the Hudson Institute and a former president of the American Enterprise Institute.

The alliance and its backers are neither seeking to argue with the Trump administration, which has denied climate change, nor to take up arms with the forces that categorically reject any new tax. They say they’ll only support a carbon tax if it’s a genuine tax reform as well as a regulatory reform. They want to work quietly, and in small groups, inside the GOP body politic.

The difficulties of getting Republican lawmakers to consider a carbon tax were illustrated when Rep. Carlos Curbelo of Florida introduced a such a bill on July 23. It got immediate pushback from Grover Norquist of Americans for Tax Reform, and the House passed an anti-carbon tax resolution on July 25.

But Flint and members of the alliance are undaunted: “As long as we have to address carbon pollution and doing so with a carbon tax is much less burdensome than doing so with regulations, and we have to make our tax code more efficient, a carbon tax is going to be part of the conversation,” Flint said at his offices near the Capitol.

The battle to contain carbon emissions is joined — from the right.

On Twitter: @llewellynking2

Llewellyn King (llewellynking1@gmail.com) is executive producer and host of White House Chronicle, on PBS.

Llewellyn King: Some GOP big shots push carbon tax

Call it a tax without tears. It is a proposal to address carbon pollution by replacing a raft of tax subsidies and regulatory requirements with a carbon tax.

What is surprising is who is pushing it: dyed-in-the-wool, rock-ribbed Republicans.

They are the top of the GOP: Every one of them has had an outstanding career in finance, industry or academia. They are men and women who contribute to Republican candidates regularly — and some of them quite generously.

These Republican grandees and party financiers have formed the Alliance for Market Solutions (AMS), which aims to educate conservative policymakers on the benefits of market-oriented solutions to climate change.

“A carbon tax, if the myriad of subsidies and regulations that policymakers now use to affect markets are stripped away, would lead to economic growth and achieve significant carbon pollution reductions,” says Alex Flint, executive director of AMS.

Well-known in Republican circles, he previously served as staff director of the Senate Committee on Energy and Natural Resources and as senior vice president of government affairs at the Nuclear Energy Institute.

The organization’s 10-member advisory board includes John Rowe, former chairman and CEO of Exelon Corp., the largest diversified utility in the United States, and Marvin Odum, former chairman and president of Shell Oil Co. and board member of the American Petroleum Institute.

What we need now, Rowe said, is “a new approach to energy tax and regulation that advances our strategic policy objectives and recognizes that the period of scarcity that began in the 1970s is over. We no longer need to subsidize energy production.”

Instead, we need policies that address “the next great energy challenge: carbon pollution,” he said.

Rowe and AMS allies believe that pairing a “revenue-neutral” carbon tax with a regulatory rollback would be good climate policy.

Flint explained: “A carbon tax would ideally be imposed upstream where carbon enters the economy. Costs would then be passed down the consumption chain through prices, which would impact decision-making and drive the use of cleaner fuels and new technologies across the economy.”

Studies by AMS estimate that a carbon tax would generate more than $1 trillion in additional revenue over the next decade, which lawmakers could use to reduce other, more distortionary taxes, or do things like make the 2017 tax reform permanent or even further reduce income taxes.

Rather than mounting a loud public-pressure campaign, Flint told me the members of the alliance — which also includes William Strong, chairman and managing director of Longford Capital Management, and Chris DeMuth, distinguished fellow at the Hudson Institute — began by meeting quietly with influential Republicans in small groups, going over the gains that would come from tax reform and emphasizing that the carbon tax does not have to be a one-size-fits-all solution, although it is a simple solution to a pressing problem.

Emphasis has been on Republicans who wield power behind the scenes and the tax writers in the House and the Senate. The reformers are getting a hearing, I am told.

The alliance has tried hard to get the facts and detailed analyses nailed down ahead of public discussion. They have done this in a new book, “Carbon Tax Policy: A Conservative Dialogue on Pro-Growth Opportunities,” edited by Alex Brill of the American Enterprise Institute.

The book is, you might say, the creed of the AMS. It is an eye-opening read by conservatives who want to limit government market-meddling and bring about sound policy through enlightened taxation.

On Twitter: @llewellynking2
Llewellyn King is executive producer and host of White House Chronicle, on PBS.