Hi, my name is Josiah, and I am a conservative who supports a revenue-neutral carbon tax.

To many people, especially those on the Right, that may seem like an odd combination. In fact, some people might assume that if I’m for a carbon tax, I can’t really be a conservative. Or maybe I’ve sold out my principles because environmental leftists drove a dump truck full of money to my house.

I can understand the skepticism (although, sadly, my bank account doesn’t bear out the dump truck theory). I used to be a carbon tax skeptic myself. Over time, however, I found that the arguments I deployed against a carbon tax were chipped away until they felt more like excuses.

What are the arguments against a carbon tax? To begin, carbon tax skepticism is often rooted in climate change skepticism. This can take a variety of forms, ranging from thinking climate change isn’t happening to believing global warming is actually a good thing. Another main argument against a carbon tax is it would be damaging to the economy and it would be regressive — hurting low-income households the most. Finally, carbon tax skeptics make a political argument: Even if a carbon tax could work in theory, it’s never going to happen, and if it did, we can’t trust government to implement it the right way.

While each of these concerns are valid, it’s possible to structure a carbon tax in a way that avoids them. Concerns about the economic costs of a carbon tax, for instance, can be addressed by making the tax revenue-neutral. In other words, revenue generated from a carbon tax can be used to cut other more burdensome taxes, thereby canceling out the economic cost of the taxeven before environmental benefits are considered. For example, a system where half the revenue from a carbon tax were used to cut payroll taxes, while the other half were used to cut capital gains tax rates, could boost overall economic growth while protecting low-income workers.

A revenue-neutral carbon tax could also side-step arguments about climate change, since such a tax “swap” could be appealing even if it has no effect on global warming. Art Laffer, the intellectual godfather of President Ronald Reagan’s supply side economics, claims to be agnostic about global warming, but still favors a revenue-neutral carbon tax because of the potential for economic growth.

Of course, we would all like taxes to be as low as possible. But unless you are an anarchist, you have to concede that some amount of tax revenue is necessary to fund the government. A revenue-neutral carbon tax offers the benefit of redirecting taxation away from things we want more of — like work and investment — and toward things we want less of (or at least don’t care so much about). Taxing carbon emissions is a better way to go about raising revenue, both economically and morally, than taxing work and investment.

In addition, a carbon tax provides an alternative to existing and potential environmental regulations. From the Clean Power Plan to vehicle efficiency standards, the law is riddled with burdensome regulations that would become redundant if a carbon tax were achieving the same goals at a much lower cost. In fact, since a carbon tax would have the side effect of lowering emissions of non-greenhouse gas pollutants, even some non-carbon-related regulations could be repealed as part of an overall carbon tax deal.

What about the political argument? One of the most common responses I get when I lay out my case for a conservative carbon tax is that the Left will never agree to it. Implicitly, this criticism seems to concede that a revenue-neutral carbon tax is good conservative policy; so good, in fact, that liberals wouldn’t support it.

It’s probably true that some on the Left would not support a conservative carbon tax. Some prominent environmental groups opposed a 2016 ballot initiative in Washington state that would have established a revenue-neutral carbon tax because the money went to tax cuts rather than environmentalists’ pet projects. On the other hand, there are also left-of-center folks who sincerely care about climate issues and would be willing to support a revenue-neutral carbon tax even if it came from conservatives.

More fundamentally, though, since when has conservative support for a policy depended on whether it was acceptable to the Left? Plenty of policy ideas start out with minimal support, only to gain ground as people come to see the merits of the position. A conservative carbon tax would roll back environmental regulation, reduce the overall tax burden, and provide a solution to an environmental issue that is a growing concern to the public.

It’s a good idea rooted in conservative principles, and principled conservatives should support it.


Image credit: Kodda

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