A tax is even scarier.

Photographer: Luke Sharrett/Bloomberg

A Carbon Dividend Is a Great Idea ... Somewhere Else

Christopher Flavelle writes editorials on health care, energy and environment for Bloomberg View. He was a senior policy analyst for Bloomberg Government and chief speechwriter for the leader of the Liberal Party of Canada.
Read More.
a | A

There may now be more campaigns devoted to selling a carbon tax than there are members of Congress willing to support one. It's unclear whether this shows progress toward an economy-wide price on carbon or how very far away it remains.

The latest effort is the Climate Leadership Council, run by Ted Halstead, founder of the Washington-based think tank the New America Foundation. Halstead wants Congress to levy a carbon tax, the revenue from which would go directly back to the public, in the form of equal checks for every adult (and smaller ones for children). Those checks could start as high as $1,000 a year for a family of four, funded by a tax of $40 for each ton of carbon emitted; that would rise to $5,000 checks, and a $200 tax, within a decade of implementation.

QuickTake Climate Change

Such an approach, Halstead argues, wouldn't just cut emissions; it would also meaningfully reduce inequality, since the checks would boost incomes most -- in percentage terms -- for the poorest households. At the levels Halstead is proposing, those checks (Halstead calls them climate dividends) would be a form of guaranteed basic income.

But wait, there's more. Halstead says a carbon dividend could ease populist resentment against government elites and complicated schemes, by distributing money transparently and evenly. It could win over Republicans, by allowing for the rollback of hated government emissions standards on everything from cars to power plants. And the program would generate its own political momentum, with voters clamoring for the checks to increase.

"The dividends offer something that is popular and equitable," Halstead told me this week. But first, "the idea needs to be legitimized," by recruiting respected public figures to advocate for it.

QuickTake The Cost of Carbon

As David Roberts wrote recently at Vox, a dividend seems promising in theory, but it requires trusting the government (at least until that first check arrives), which may be why it doesn’t always poll well. Roberts cited 2014 survey data that shows far more support for instead funding renewable-energy research; a separate study suggested that was the only way to get majority Republican support for a carbon tax.

Halstead cites polling in the opposite direction, showing two-thirds support for a carbon dividend. But suppose one sets aside the debate over the most politically rewarding way to spend the money raised by a carbon tax. Whichever answer you choose relies on the same premise: that Americans' suspicion of government (and taxes, and redistribution, and science, and climate change, and just plain change) can be softened enough to generate broad support.

That may simply be unachievable, at least at this angry moment in U.S. politics. Halstead realizes this: He intends his campaign to be global, and the council is planning offices in Berlin, New Delhi and Beijing, as well as Washington. That's because he expects another country to adopt a carbon dividend first. "And then," he added, "America would follow."

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Christopher Flavelle at cflavelle@bloomberg.net

To contact the editor responsible for this story:
Brooke Sample at bsample1@bloomberg.net