A carbon tax that isn’t cap and trade

When the U.N. Climate Change Conference in Cancun, Mexico, wraps up Friday, the world will be no closer to an agreement to cut greenhouse gases than it was a year ago following the disappointing meeting in Copenhagen.

Not that there’s less urgency to alter humanity’s collision course with the powerful forces of nature, a path established when we began burning fossil fuels more than two centuries ago.

A report released at the Cancun conference predicts that global surface temperatures will increase an average of 4 degrees Celsius within the century. The end result would be a billion people losing their homes from rising sea levels and 3 billion people losing access to clean water.

Despite this sobering assessment, no meaningful commitment to curtail the heat-trapping gases that disrupt the Earth’s climate appears likely anytime soon. Congress adjourns this month without enacting legislation to put a price on carbon, the most critical step needed to reduce carbon dioxide emissions. With control of the House shifting to Republicans, Beltway pundits say it will be at least two years before climate and energy legislation is considered.

Based on what the science is telling us — in essence, “objects in the mirror are closer than they appear” — we can’t afford to wait that long.

Unfortunately, the odds against taking action have been stacked higher by the “No Climate Tax” pledge being circulated by Americans for Prosperity, a group funded by oil conglomerate Koch Industries. More than 150 members of the U.S. House of Representatives have signed the pledge. Seven GOP members of Georgia’s congressional delegation have signed on — Jack Kingston, Lynn Westmoreland, Tom Price, Tom Graves, Paul Broun, Phil Gingrey and Austin Scott (newly elected).

Here is the exact wording of the pledge:

“I, [name], pledge to the taxpayers of the state of [name] and to the American people that I will oppose any legislation relating to climate change that includes a net increase in government revenue.”

It’s pretty simple and straightforward, but also interestingly precise.

Give our congressmen the benefit of the doubt on this, that they signed the pledge out of a genuine desire to control the size of government, not to protect the fossil fuel industry.

That being the case, cap and trade — the approach to carbon pricing on the table these past two years — would run afoul of that promise. It would have taken in vast amounts of revenue from permit auctions and spent that money on new programs, thereby increasing the government’s size. Signers of the pledge are obliged to oppose it.

There is, however, a way to price carbon our congressmen can support without breaking the pledge — carbon fee and dividend. A steadily rising fee is placed on carbon-based fuels at the source — mine, well, port of entry — such that coal and oil become more expensive than wind, solar and other forms of clean energy within a decade. All the revenue from the carbon fee is then returned equally to all Americans, preferably in the form of monthly checks or direct deposits. This gives consumers the cash they need to cope with rising energy costs associated with the carbon fee.

Handing out rebates to Americans is nothing new. We did it under the Bush administration when everyone received checks from the federal government to stimulate our economy. Another simple way to return the revenue would be to cut payroll taxes.

By returning all the carbon fee revenue to everyone, the Carbon Tax Center estimates that at least 70 percent of Americans would receive as much or more than they would pay for increased energy costs. Lower-income families — who live in smaller houses and rely on public transportation and thus have a smaller carbon footprint — would likely stand to get more back from the dividend.

From the viewpoint of those taking the pledge, of course, the biggest plus is that fee and dividend creates no “net increase in government revenue.”

What the fee and dividend approach does create is a clear price signal for investors who are waiting to see if clean energy is a smart bet for the future. With profits assured, wind farms and solar arrays will pop up like daffodils throughout the land, and with them millions of new jobs for Americans.

We have a solution here, it seems, that Republicans can live with. Why wait? Climate change isn’t taking a timeout, and neither should we.