WHITE HOUSE, MEMBERS OF CONGRESS BACK AWAY FROM CARBON TAX

Tamar Hallerman
GHG Monitor
11/16/12

Despite what appeared to be growing momentum in some policy circles in support of a carbon tax, both the White House and Congress backed away from the issue this week. Discussion about the benefits of enacting a price on carbon to help ease the nation’s looming ‘fiscal cliff’ reached a fever pitch this week as lawmakers returned to Washington following last week’s elections. But as soon as some proponents began to perk up about the idea of a renewed debate on pricing carbon emissions, comments from several key leaders in Washington indicated that few are willing to step up on the issue politically.

Earlier in the week, the issue appeared to have garnered some sort of political opening. On Tuesday, a Treasury Department official said the Obama Administration would consider the idea if Congressional Republicans spearheaded the effort. Meanwhile, National Journal quoted influential lobbyist Grover Norquist, famous for his Republican anti-tax pledge, who said that implementing a carbon tax in exchange for cutting income taxes would not violate his pledge. “It’s possible you could structure something that wasn’t an increase and didn’t violate the pledge,” Norquist told the magazine (although he reversed his language in comments later this week). The conservative think tank American Enterprise Institute also held an all-day discussion of a tax this week while the Brookings Institute released a proposal that argued that a $20 per ton tax would raise $150 billion annually in revenues.

Obama Dodges Carbon Tax Promises

But as quickly as the idea became the issue du jour in Washington, the hopes of many were dashed when the White House did not take a strong supportive stance on the topic. When asked about what he would do to address climate change in his second term during a news conference this week, President Obama offered few specifics and stopped short of saying that he would propose or support a carbon tax proposal. Obama said he would push for a “wide-ranging conversation with scientists, engineers and elected officials” to see how to reduce carbon emissions, but also indicated that the economy will continue to remain the main issue for his Administration. “There’s no doubt that for us to take on climate change in a serious way would involve making some tough political choices, and understandably I think the American people right now have been so focused and will continue to be focused on our economy and jobs and growth that if the message is somehow we’re going to ignore jobs and growth simply to address climate change, I don’t think anybody’s going to go for that. I won’t go for that,” he said. “If, on the other hand, we can shape an agenda that says we can create jobs, advance growth and make a serious dent in climate change and be an international leader, I think that’s something that the American people would support.” Later in the week, White House press secretary Jay Carney said the President would “never” propose a carbon tax and that he has “no intention” of doing so.

Members of Congress Also Walk Back Support

Some key members of Congress also indicated that the issue will not likely have legs politically in the coming months. At a CQ Roll Call energy discussion this week, presumptive new chairman of the Senate Energy and Natural Resources Committee Ron Wyden (D-Ore.) said the issue would be a “big lift politically.” “When you talk about climate change, that obviously generates enormous passions in terms of politics. The question is, how can you break through?” he said. At the same event, Senate Energy and Natural Resources Ranking Member Lisa Murkowski (R-Alaska) said lawmakers should instead discuss “environmental responsibility” more broadly and not solely focus on the issue of a carbon tax. “If we are just looking at this as a revenue raiser for the Treasury, to me that’s a bad policy,” she said. 

House Republicans were quick to distance themselves from the issue. Energy and Power Subcommittee Chairman Ed Whitfield (R-Ky.) said that while his caucus would be “willing to listen to anything” related to tax reform, no detailed discussions about a carbon tax have occurred so far. “I’m sure there are many members that certainly favor a carbon tax, but I don’t think any of us are willing to commit to a carbon tax until we know a lot more details of what we’re going to have,” he said. Energy and Commerce Committee Chairman Fred Upton (R-Mich.) was more blunt in remarks this week. “I don’t like the idea,” he told reporters. The Tea Party group Americans for Prosperity announced that all members of the House GOP leadership team—including Speaker of the House John Boehner and Republican Majority Leader Eric Cantor—signed their pledge promising to oppose any climate change legislation that leads to an increase in government revenue. 

The comments effectively helped stifle any hope that Congressional Republicans would get on board with the proposal. Several prominent Republicans stepped out in support of the issue when it first resurfaced this summer, but that appears to have done little in terms of shifting the tide for sitting members of Congress. Bob Inglis (R-Ga.), a former member of Congress who was ousted in 2010 by a Tea Party challenger due in part to his stance on climate change, launched the Energy and Enterprise Initiative earlier this summer, a campaign meant to promote a carbon tax to conservatives. Reagan Administration Secretary of State George Shultz also spoke out in support of carbon price, as did Greg Mankiw, one of the economic advisers to former Republican presidential nominee Mitt Romney.