Thursday, November 08, 2012

The time window for a revenue-neutral carbon tax is 2017-2018, so get cracking

My theory that our time for serious climate legislation is the two years after the 2016 election relies on the following reasons why up to 2016 won’t work:

  • Before 2014 is no good because the current House majority would never pass it (and the Senate minority would filibuster).
  • 2014-2016 is no good because the president’s party almost always loses seats in the House in the off year.
Then there’s 2016, the counterpart of the lucky fate of 2012 Senate elections. The Senate gets elected in three separate waves, with a few more Ds than Rs. Fate decreed an uneven distribution with a large minority of Ds up for election in 2012, 23 Ds versus 10 Rs, a big reason why this election was supposed to be bad in the Senate, until the Rs pulled out their unregistered pistols and shot up their own feet. Fate said 2014 would be somewhat closer in distribution between parties, so Math said that 2016 is the vulnerable year for Rs, with 24 Rs up for election compared to 10 Ds.

While far from certain, it’s possible that for two years after the 2016 election, and only for those two years, Ds will have somewhere in the vicinity of 60 votes in the Senate. That’s the chance. The 2018 election puts the Ds back on the defensive, 25 D seats versus 8 R seats.

I suggest two alternatives for explaining climate politics. One is Roger Pielke Jr.’s so-called Iron Law:

When policies focused on economic growth confront policies focused on emissions reduction, it is economic growth that will win out every time.

The other is the acronym BOSO, or Brian’s Obvious Statement of the Obvious:

Getting 60 votes in the Senate is hard.

Only one of these is likely to display true insight into climate politics. The Iron Law appears to be unfalsifiable because it’s not applied where it doesn’t work, so you can probably guess which way I lean. If you go with the Iron Law though, then you make a few bets on technology and just hope for the best (and please don’t annoy Godwin by pointing out that was Hitler’s end-game strategy too). If by contrast you’re just a BOSO, then look for the best strategy to get to 60.

I’m assuming the president will be a Democrat, or a Republican who favors action, and that the House will pass a bill like they were able to in 2010. Getting Republican and possibly squishy Democratic support is the reason, really the only reason, to do a revenue-neutral carbon tax. A revenue-generating tax could do positive things for climate mitigation and adaptation, or a cap-and-trade law could provide similar incentives. It’s the possibility of getting a few Republican votes and the difficulty of BOSO that makes me think we should explore a revenue neutral tax.

And I’m saying “possibility,” not probability for all the above. On the hopeful side, science will continue to beat over the heads of the ignorant, and not-hopeful tragedies like Sandy may do the same.   Renewables will continue to expand while costs decrease, and shale gas can cut into the stranglehold that coal has over electricity politics in swing states like Ohio.  Demographics also favor reality. On the other hand, two election cycles between now and 2017 aren’t that many to get reality into Republican politics, which is actually getting more ideologically rigid at the state and local level.

Still, it’s an opportunity that we should plan for as much as possible, and revenue-neutral carbon tax might be the best way to do it. Meantime, stick with Eli’s strategy of regulating our way through this via the Clean Air Act (and I expect eventually through the Clean Water Act for ocean acidification).

 If the Republicans don’t bend in 2017 and there aren’t enough votes to get around them, then their rigidity will eventually make them a national version of the California Republican Party, a group so unpopular and powerless that it will have less than one third of the seats in both houses of the state legislature. That, however, will take even more time before it happens.


Greg said...

2016 should be a fun election. The Democratic candidate will likely be campaigning against a backdrop of solid economic recovery ... and will have two very popular Presidents stumping for him/her.

Steve Bloom said...

So why not a carbon tax via the CAA?

EliRabett said...

Demographics also favor reality.

If you have to live in the future you care about it

Miguelito said...

I kind of like the way Obama is doing it now, going after coal-burning plants and vehicle fuel efficiency with new EPA regulations. Same with venting at oil and gas operations.

It avoids wasting time with legislation that will never get passed in the next four years. Plus, when it is possible to get legislation passed, at least there will be some momentum rather than starting from scratch.

Jim Eager said...

"campaigning against a backdrop of solid economic recovery..."

against what's left of the Republican party and a new far-right splinter party.

Don't laugh, that's what happened in Canada until Steven Harper stitched the Reform Party and the Progressive Conservative Party (yeah, we already know that's an oxymoron) back together again.

David B. Benson said...

I'll believe when I see it.

Gaz said...

Care needed.
It's only revenue neutral if the revenue raised is matched by revenue foregone, eg by income tax cuts to offset carbon tax raised.
If some people are compensated by higher welfare payments or businesses get subsidies, it's not revenue neutral but budget neutral or fiscally neutral.
We have had such a system here in Australia since July 1 and the world is pretty much the same as it was before.

Anonymous said...

I've found it useful to point out to opponents of a carbon tax, that Alaska has had a wildly popular revenue-neutral(ish) one for decades. They don't call it that, of course. They call it licensing of Alaskan public lands to oil companies. Citizens of Alaska get money mailed to them every year. Cost of managing that system is minimal, because the fee is levied not on consumers directly, but on the bare handful of source companies. Some might call it "socialism" or "facism" or somesuch except Alaskans as a whole are proud conservative/libertarian.

Arthur said...

The 60-vote requirement in the senate comes from senate rules, not from the constitution. That is, it can be changed at the start of the next senate session and by a simple majority at that point. The current senate majority seems to be seriously look at reform of this rule right now.

Brian said...

Steve - I've read some claims that we could do cap-and-trade via CAA, but I haven't read the same for a tax.

Even cap-and-trade would be difficult to justify, I think, but I don't know the issue that well.

david lewis said...

As a recent immigrant, I was surprised when I discovered that the 60 vote "rule" is just an agreement between the two parties that that's what it takes to pass something in the Senate if either party decides it has to pull out all the stops.

But now that I've seen it, I think its not something either party can easily decide to change given that the country is much more polarized than when this "rule" became the norm.

Each party is terrified of what the US would become if the other party could actually pass anything it wanted to pass if it held a majority in the Senate and House and held the Presidency.

I've heard Harry Reid say if the Democratic Party retained control of the Senate they were "going" to change this, this time, but I dismissed it as campaign BS.

In a parliamentary democracy such Canada where I come from an election where only two parties are running almost always produces a government that can pass anything it wants. But the political culture evolves differently, or has evolved differently, so that the parties see themselves as restrained by the electorate. They don't immediately start doing anything their own party zealots want as soon as they get their hands on power - they tend to conduct themselves in ways their senior leadership calculate will let them win the next election. There is a tremendous concentration of power in the person of the Prime Minister in a parliamentary system. A party can run on a platform and enact it if it gets a mandate and everyone can see how it works for five years.

As the US seems to be devolving into utter ungovernability, because both parties sanction and cherish gerrymandering and because one party is convinced that a system that can't function without compromise can be made to work if they can just hold their breath until they turn blue or whatever it is they think, I wouldn't be predicting the Democratic Party in the Senate will invoke whatever clause it takes to force voting back into a simple majority wins in most cases.

Don said...

I understand what you are saying - but note that the last time that Democrats won three consecutive Presidential elections was 1940/44/48 (actually - they had also won in '32 and '36). I am not so sure that I would have the same confidence that the President elected in 2016 will be a Democrat. (I am ignoring the other possibility you present, because right now I don't see any "Republican who favors action" that could possibly get nominated.)

If there is any way to get action now, I think the odds - though long - may be as good as we are going to get.

Brian said...

Don- the Rs got a third term in '88. Demographics increasingly favor Ds for presidential elections, ignoring other issues like gay rights and immigration.

And Chris Christie might, just might, swing back over to sanity in four years.

I wouldn't say my scenario is more likely than not, but rather that it is possible and is the best chance for getting real legislation.

There's also the possibility that by 2017, corporate American will be tired of command-and-control carbon regulation via the EPA and tell the Rs that a carbon tax is better.

Lewis Cleverdon said...

Given the marginal change in US fossil energy use following the tripling of global oil price and doubling of coal-price in the last decade, just how high would a carbon tax need to be imposed to cut emissions by say a mere 20% ? And 95% ??

Is not the interest of known prevaricators in a carbon tax precisely because it is largely irrelevant at low rates (<$80/T) and easily opposed at rates high enough to be effective ?

What is the point of planning five years ahead to succeed in introducing an inherently ineffective carbon control measure ?

Anonymous said...

Maybe we should ask Jim Hansen if he thinks we should "wait" ... half a decade more.

Hey, after 24 years, what's 6 more, right?

Is that what "leaders" do?

Wait until the "climate" becomes favorable?

Good luck with that.

"But we need 60 votes".

Obama can tell that to his grandchildren.


dhogaza said...

"Demographics increasingly favor Ds for presidential elections, ignoring other issues like gay rights and immigration."

Nate Silver has a good piece on the structural problems facing the Repubican Party in the next Presidential election (the distribution of electoral votes is such that even with a tie in the popular vote, Dems hold a substantial advantage).

dhogaza said...

"As a recent immigrant, I was surprised when I discovered that the 60 vote "rule" is just an agreement between the two parties that that's what it takes to pass something in the Senate if either party decides it has to pull out all the stops.

But now that I've seen it, I think its not something either party can easily decide to change given that the country is much more polarized than when this "rule" became the norm."

You're right. However there are now 7 Dems in the Senate committed to filibuster reform, including one of mine (Jeff Merkley) who has made this an issue from his first campaign (he's in his first term).

We shall see.

The current rules were actually a reform that has in some ways backfired. Read more about it, David Lewis, or if you want I can post a summary here.

dhogaza said...

"and will have two very popular Presidents stumping for him/her."

Possibly one very popular President and one very popular President-hubby ...