No, Carbon Taxes Aren’t Socialist

Carbon taxes are an industry-friendly approach to climate catastrophe. They can't deliver climate justice.

Wildfire creeps through the forest, down the south side of Dry Creek Canyon, at the Partrick Fire on October 12, 2017 west of Napa, CA. David McNew / Getty

If the intent of the new report from the Intergovernmental Panel on Climate Change (IPCC) is to shock the world about the looming climate crisis, it certainly succeeds. By most accounts, a nearly unthinkable global shift away from fossil fuels must happen in the next dozen years.

Given those stakes, would any self-described socialist endorse a climate policy that inflicts massive price hikes on working people? You wouldn’t think so, but that very idea was floated in a recent Jacobin article as something the Left should energetically embrace. Yet doing so would waste the energy of the burgeoning climate justice movement, while likely doing little to create a more livable future.

The proposal, coauthored by Anders Fremstad and Mark Paul and backed by the People’s Policy Project, is as plain as can be: dramatically increase the costs associated with almost every facet of life in order to extract some money from fossil-fuel companies. The tool would be a carbon tax, which the authors admit “burdens the poor more than the rich.”

The concept is not new. Similar policies have been floated by middle-of-the-road Big Greens and even a group of press-savvy Republican elders led by Reagan’s secretary of state, George Shultz. At times it can seem like everyone supports a carbon tax, at least on paper. Major fossil-fuel corporations have endorsed certain carbon tax schemes, and insurgent left-leaning Democrats have backed calls to “make polluters pay.”

So what makes Fremstad and Paul’s proposal qualify as socialist? Apparently, the scale of the tax. While most carbon tax plans levy somewhere in the neighborhood of $40 or $50 per ton, Fremstad and Paul want to go much higher: $230 per ton. That would have obvious and immediate effects. They estimate that the price of gasoline would shoot up 79 percent, while electricity would rise by 50 percent.

This hypothetical windfall would not be plowed into clean energy programs — a feature of carbon tax plans advanced in Washington State and elsewhere — but instead returned to people in a dividend similar to the Shultz proposal. The difference from more conservative plans is that this rebate would be tilted towards working-class families. So while your cost of living would jump — their estimate for the poorest 10 percent of the population is $866 per year — you’d get a rebate check that more than covered these out-of-pocket expenses. The wealthy would get back less than they would likely pay.

The authors argue that the type of carbon tax supported by many climate activists is regressive, raising costs on the most vulnerable in order to fund projects that would directly cut emissions. There’s something to be said for that analysis. But the core problem with either approach is more fundamental: there is no evidence that a carbon tax of any kind actually reduces emissions.

The most celebrated carbon tax exists in the Canadian province of British Columbia, which implemented the levy in 2008. Yet the tax has actually resulted in increased carbon emissions and steeper energy costs for consumers. Perhaps the outcome would have been very different if the plan were substantially more regressive, but that seems doubtful.

Market-based climate policies have failed elsewhere too, in a variety of ways. In the European Union and California, fraud, market manipulation, and environmental injustice have plagued carbon tax schemes.

A 2016 study of a California plan found that many dirty industry sectors purchased credits, while increasing emissions in frontline communities of color. The much-ballyhooed Regional Greenhouse Gas Initiative (RGGI) on the East Coast saw states set very low carbon dioxide emissions targets to virtually guarantee success, while failing to even consider methane emissions, the highly potent greenhouse gas emitted by fracked gas. So while fossil-fuel corporations have shifted from burning coal to so-called “natural gas” for cost reasons, RGGI deems that a success story, even though it amounts to swapping one planet-cooking emission for another.

In recent years, we’ve seen significant left energy devoted to crafting bold proposals to create the world we want to live in — not merely what we think might be politically achievable. Climate policy should be no different. That’s why it is so disappointing to see that taxes remain at the core of these discussions.

Carbon tax advocates have long preached the effectiveness of the marketplace, where consumers would be disciplined to make choices to reduce their fossil-fuel footprint. Repurposing or tweaking these bad ideas cannot be reconciled with socialist principles or climate justice. In a piece about the IPCC’s embrace of market solutions, even the New York Times admitted that these approaches have failed to bring down emissions.

Carbon taxes — as a report from the Indigenous Environmental Network and the Climate Justice Alliance argues — are a “false solution,” diverting “attention from the more complex and deep-reaching political changes that are necessary to drastically cut emissions at source.” If that is the goal — and it should be, if we want to stave off the worst impacts of climate chaos — then the obvious solution is to enact policies that dramatically and directly reduce emissions.

That means requiring companies to reduce emissions to the lowest level that technology allows — just as we did with the Clean Air Act, Clean Water Act, and other statutory frameworks. We don’t need to reinvent the wheel or implement convoluted, industry-friendly approaches that leave us only hoping for a favorable outcome. Dozens of members of Congress already support the Off Fossil Fuels for a Better Future Act, which would mandate a full transition to clean energy by 2035 without relying on the marketplace.

Like the battle for single-payer health care, this will not be an easy fight. But carbon tax wishful thinking or cap-and-trade climate incrementalism will not deliver a more just and sustainable world.