Right Side Round Table: How should government respond to climate change?
Andrew Moylan
Senior Fellow at the R Street Institute
Climate change absolutely poses a threat to which government should respond, but that action shouldn’t entail dramatically expanding its size and scope as President Obama seeks. After all, there is a threat inherent in bad policies that damages our economy and thus our ability to protect against the effects of a changing climate. The best policy is one we haven’t tried yet: reducing greenhouse gas emissions without growing government through a revenue-neutral carbon tax.
Estimates show that a carbon tax would allow us to completely eliminate capital gains, dividends, estate and import taxes right away. Despite representing a relatively small portion of federal revenue, these levies are some of the most economically damaging on the books and their removal would be a boon to investment and growth. Couple with that an overhaul to head off the president’s expensive and heavy-handed regulatory scheme and the result would be a more pro-growth tax code, fewer complicated rules from the Environmental Protection Agency, and a government that is smaller in size rather than larger.
A revenue-neutral carbon tax with regulatory reform could achieve the same goal the president seeks to address without expanding government or contracting economic opportunity.
