Hinge of History | Carbon Tax and Cap-and-Trade


credit: usgreenchamber.com

California today embarks upon its landmark cap-and-trade program for carbon emitters. This would be newsworthy at any time. It’s all the more important now, because the lamentable mishandling of the cap-and-trade issue in Washington in recent years has taken the concept off the menu of federal policy options for the time being.

Also this week, a prospective breakthrough in the budget cliff debates in Washington is emerging–one which could recast America’s energy and environmental future.

Grover Norquist Opens the Door–Just a Crack

The breakthrough in Washington has not emerged from the president or congressional officials of either legacy party.

The change has come from my longtime friend Grover Norquist, president of Americans for Tax Reform. He is the author of the “Taxpayer Protection Pledge.”

On Monday, Norquist publicly allowed that a revenue-neutral carbon tax could be acceptable within the Taxpayer Protection Pledge. This could have the effect of bringing House and Senate Republicans into the carbon tax discussion.

On Tuesday, perhaps after hearing from political allies in the industries most likely to be directly affected by a carbon tax, Norquist substantially walked back his earlier comments. His rationale appears to be that while crafting a revenue-neutral carbon tax is theoretically possible, it is politically difficult to accomplish or maintain without overall increases in overall tax burdens over time.

Either way, Grover Norquist’s initial comments have brought much-needed attention to the prospect of a tax shift–from reliance on income taxes to carbon and consumption taxes.

Our Choice

Taken together, the California cap-and-trade initiative and the emergence of carbon taxes in the budget talks–could be harbingers of major change. Or not so much.

One thing is certain: the nexus between environment and economics is tightening. The United States still has the opportunity to influence–though not dictate–global thinking and action.

Our position is based on the accomplishments and leadership of prior generations of Americans.

The consequences of our grasping the nettle of 21st century leadership–or letting it pass–will fall largely on rising generations.

Will we steel ourselves to face the future, as our forebears did?

When looked at from the vantage point of those present at the creation, history is made by the exertions of a small number of committed people. All at once, change breaks through, in flashpoint moments of time and opportunity.

Are we prepared for our moment of truth?

Hinge of History | Carbon Tax and Cap-and-Trade