During the presidential election, Ryan Lizza of The New Yorker spoke to various Obama administration officials to get a sense of their vision for a second term. One persistent theme, which figured heavily in President Obama’s second inaugural address, was climate change:
Another major initiative under discussion is energy policy, but the politics of energy are almost as fraught as those of housing. As a candidate, Obama talked in stirring terms about the threat from global warming. In June, 2008, on the night he won the Democratic nomination, he declared that his victory marked “the moment when the rise of the oceans began to slow and our planet began to heal.” But climate change will remain a divisive issue after the election. Among Obama’s conservative critics, his call to halt the rise of the oceans is a frequently mocked piece of oratory. And one of the biggest failures of his first term was the Administration’s inability to win a deal on cap and trade—originally a Republican idea.
Obama talks about energy in most of his speeches, but, in contrast with 2009, when the centerpiece of his program was a cap-and-trade approach to reducing carbon emissions, his goal today is unclear. Early discussions on Capitol Hill suggest that, in a wide-ranging deal, a carbon tax might be part of a grand bargain to settle Taxmageddon.
A carbon tax did not materialize as part of the post-cliff tax deal. But the White House has signaled that the president intends to release new climate change proposals next month, a promise that Bloomberg reporter Lisa Lerer describes as a gesture in the direction of opponents of the Keystone XL pipeline, including a number of prominent donors.
In January, the Pew Research Center found that 28 percent of the public believes that climate change legislation should be a top priority for the president and Congress. By way of comparison, 86 percent agreed that strengthening the economy should be a top priority and 79 percent said the same of improving the job situation. Moreover, one assumes most voters who place a high priority on combating climate change are inclined to back Democratic candidates, which suggests that congressional Republicans will be disinclined to dedicate much time and effort to new climate change legislation. Given that the climate change debate is going to happen, congressional Republicans, and Republican congressional candidates, would do well to offer an alternative agenda.
Broadly speaking, there are two plausible and politically attractive strategies conservatives might pursue. One strategy, which Oren Cass outlined in National Review in March, would combine opposition to carbon pricing coupled with time-limited funding for basic and applied research in energy technologies. Another strategy, which I associate with Jonathan Adler and Bob Inglis, among others, would embrace a carbon tax as part of a larger effort to reduce or replace other taxes. The latter approach is a tougher sell among Republicans. Having opposed carbon pricing for a long time, I’ve grown more sympathetic when I see it as part of a larger effort to eliminate the corporate income tax. Unfortunately, the corporate income tax is relatively politically popular, and swapping a popular tax for an unpopular tax isn’t necessarily the most attractive political move, regardless of its substantive merits.