Is Trump rejecting climate denial?

It has become depressingly ordinary for Republican politicians totrump-climate-713040 enter a denial phase in any discussion of climate change. This both undermines any attempt to deal with this issue, but also to discuss it. People who pretend the climate isn’t changing will refuse to discuss how best to address the issue and it allows liberals to accuse anyone who wants to debate their agenda of being a climate change denier. One doesn’t have to be a denier to suggest that a particular policy might be inefficient in its stated goal.

Donald Trump was at the forefront of climate denial during his campaign and promised to pull the US out of the Paris climate change accords. But, at the time of writing, he has taken no action to do so. He has also suggested that his thinking may have moved on on the question of whether or not climate change is happening.

The credit for this rare outbreak of maturity in the thinking of the Trump administration is given to his daughter, Ivanka, and her husband, Jared Kushner, both advisers in the White House.

Meanwhile, George Schultz and James Baker, who have both served as both Secretary to the Treasury and as Secretary of State, have proposed a sensible conservative approach to climate change.

They advocate a carbon tax. This would be paid by American businesses on energy from fossil fuels. They propose to keep the tax revenue neutral by making a rebate to every household. To prevent American businesses being disadvantaged in international commerce they suggest the same tax should be imposed on goods imported to the US and that American businesses should be given a rebate on the tax for goods they export to countries which do not have a carbon tax.

A revenue neutral carbon tax is a good idea. It should not be as a high a priority as ending agricultural protectionism, transport subsidies (such as “free” roads) and energy subsidies, but should be pursued in addition to these measures.

But the Schultz-Baker rebate method for making the tax revenue neutral is not the best one. Rebates to households for a tax on business is presumably there to make the measure more popular. It would be better to cut other business taxes. If that were done there would be no need to pay rebates to exporters. Carbon tax would have gone up, but American business would not be paying higher taxes overall and would be no less competitive overall.

If the taxes cut were payroll taxes, then energy intensive industries would be a little less competitive and labor intensive industries would be a little more competitive. For both domestic and export markets, investment would shift to labor intensive industries, a net boost for jobs.

And a carbon tax provides real market incentives for innovation in energy efficiency and in producing energy from less polluting primary sources.

Such a proposal rejects two superstitions: those of the science deniers who insist that they know more than climate scientists and the liberals who claim that government regulation is always the best way to promote human welfare.

 ql

Quentin Langley lives in New York and London and teaches at the University of Bedfordshire Business School. He is the author of Brandjack: How your reputation is at risk from brand pirates and what to do about it

 

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