The surprise Obama endorsement from New York City Mayor Michael Bloomberg’s is a good time to revisit one of Bloomberg’s ideas to combat climate change: the carbon tax. Bloomberg supported the idea before a group of Wall Street CEOs in 2010 and an editorial in the Bloomberg financial news service, called for a carbon tax to cut the deficit and fight climate change. The significance of someone like Bloomberg calling for a carbon tax is that it can shift the discourse around climate change from a polarized, values-based fight to a more straightforward discussion of sound public policy.
For sure there is a strong moral argument about why we should implement a strong climate policy to minimize future environmental disasters and leave a better planet for the next generations. However, in the current polarized environment, policy discussions grounded in morality are a non-starter. The U.S. leads the world in promoting climate deniers and climate policies are derided as caring about oceans rising, rather than the well-being of families. In this political atmosphere, we can’t even agree that climate change is occurring, let alone that we should be implementing bold, forward-thinking policies—policies that will likely impose costs on the fossil fuel industry.
The current climate stagnation is what makes Bloomberg’s endorsement of Obama and a carbon tax even more compelling. The Bloomberg editorial board begins their call for a carbon tax by laying out the fact that the Earth is warming, that burning fossil fuels contributes to global warming, and that a carbon tax would force a shift away from fossil fuels. By stating that not only is climate change occurring but also that fossil fuels contribute to it, the conversation already avoids the fallacy of “all of the above” energy plans that may make us more energy independent but do not help combat climate change.
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Bloomberg proposes a carbon tax of $15 a ton that rises at 4 percent above inflation. This rate would raise $310 billion by 2050 and cut emissions by 34 percent. To minimize the impact on businesses, Bloomberg advocates using up to 50 percent of the revenue to lower corporate tax rates. The rest of the revenue could be used to help reduce the federal deficit and help offset any cost increases to consumers from higher electricity and gas prices. Another way to distribute revenue would be to decrease the amount that goes to lowering the corporate tax rate and divert it into a fund that could provide support for renewable energy and energy efficiency development and expansion.
Bloomberg has an estimated $25 billion fortune. I would argue you don’t accumulate that kind of wealth without being an astute businessman and if he thinks a carbon tax would help, not hurt, our economy, people should listen. Now that we’ve broken the climate silence, we need to start implementing bold policies and a carbon tax is a good place to start.