Climate change is back in the news, with a new report from the Intergovernmental Panel on Climate Change calling for major action to reduce emissions. Climate change often seems like an issue designed to trip up conservatives.

Given the size and scale of the problem, many people naturally assume that any attempt to deal with climate change through public policy will require a massive expansion of government. Some conservatives have responded by attempting to downplay the problem. Yet the irony is that there are plenty of ways to address climate change that would actually make government smaller.

Take electricity for example. The American power sector is a major source of greenhouse gas emissions. It is also divided between states that allow electrical competition in wholesale or retail markets and those where electrical service is provided by government-protected monopolies. Over the last 20 years, states that promote competition have done a better job of moving to a cleaner power grid.

Texas, which has the most free-market electrical system in the nation, also produces the most wind power. Furthermore, competitive states have adopted cleaner technologies and shuttered uneconomical coal plants more quickly than states with monopolistic markets.

This isn’t a coincidence. Utilities in regulated states are guaranteed to recover their costs. This mean the more they spend the more they make. As a result, they are more willing to keep an uneconomical plant in operation. Protected from competition, monopolies also have less incentive to respond to the growing consumer demand for clean energy. Promoting competition among power companies is thus a free-market way to reduce greenhouse gas emissions from the power sector.

And there are plenty of other ways conservatives can combat climate change with small-government principles. Whether it’s through subsidies for fossil fuel companies or lengthy regulatory processes for clean energy sources like nuclear and hydro, the government does a great deal to increase our vulnerability to climate change.

Conservatives could mitigate these effects simply by cutting red tape and stopping the government from encouraging environmentally harmful practices.

Even in big-picture terms, the best ideas for dealing with climate change are rooted in conservative principles. As famed conservative economist Milton Friedman once noted, protecting the environment is properly the business of government “because there’s always a case for the government [to act] to some extent when what two people do affects a third party.”Yet that doesn’t mean the best solution is government regulation. Instead, the best way to deal with, say, air pollution from cars, would be “to impose a tax on the cost of the pollutants emitted by a car and make an incentive for car manufacturers and for consumers to keep down the amount of pollution.”Applied to climate change, this thinking would call for a carbon tax to encourage innovative ways of reducing greenhouse gas emissions.

Aside from its environmental benefits, a carbon tax could provide a vehicle for long-sought-after tax reforms.Conservatives have long advocated a consumption-based tax system that would not disincentivize work and investment.

A carbon consumption tax would provide the revenue needed to reduce or eliminate other, more burdensome taxes, leading to a net win for the economy. A carbon tax would also allow for the repeal of a host of environmental regulations—from renewable mandates to vehicle efficiency standards—that are currently justified as being necessary to deal with climate change.

Conservatives needn’t fear the climate discussion. Far from being out of ideas, conservatives have plenty that are based on the principles of limited government, markets and simplified taxes. Indeed, these ideas may have the best chance of actually solving the climate conundrum.

Featured Publications