Republicans need an economic climate plan ahead of 2022

OPINION

There are times when a small event reveals a large truth. The resignation of the chairman of the Securities and Exchange Commission leaves the SEC with four members, two from each party.

In ordinary times, one would expect pundits to offer their views on the effect of this and of possible candidates for the vacancy on enforcement of SEC rules about government corporate transparency and the like. Not this time. Most commentators seem more interested in how the SEC will move on climate change and what shade of green the eventual Biden appointee would be. This is a tribute to Biden’s rhetorical effort to put climate change at the center of all government policies – fiscal, agricultural, trade, enforcement. And it puts Republicans in a tough spot for 2022, when 22 Republican and 12 Democratic senators will be up for reelection.

We can reasonably predict two things. First, the economic winds will favor Democrats if the economy is growing at anything like the 6% that rate-seers are expecting. Second, Republicans cannot afford to go into battle without a policy position on how to deal with climate change.

The Pew Research Center reports that issue is very (42%) or somewhat (26%) important to voters, making it unavoidable. Signing on to Trump’s “hoax” theory does not seem a winning strategy. Moreover, as the worst of COVID-19 will likely be in the past by then, climate change is likely to resume its status as a prominent issue.

This is why Republican candidates need an environmental policy to replace Trump’s “hoax,” but without conceding the need for a vastly expensive, government-bloating Green New Deal. They need something to be in favor of — something consistent with conservative values that does not require them to sign on to the notion that cataclysm looms every time we stomp down on the pedal of our SUVs. They also need something more than a confusing battle over the real cost of whatever version of the Green New Deal Biden is finally persuaded or forced by his Left to adopt.

Republicans need something more than a statistical demonstration that the temperatures might not be increasing, that hurricanes, floods, fires, and droughts are no more frequent or severe than previously. In the climate debate, anecdote trumps data. The hard-hit, teary family that lost its home and perhaps a pet to a fire or flood beats the best expert knowledge.

The good news is that Republicans and conservatives can offer a program that avoids intrusive regulation without adding to the burdens of those with low incomes by arranging transfers to them that offset any gasoline and other price increases they might confront. Better still, a conservative program can increase the incentive of investors to develop cleaner sources of energy by ending the free ride that polluters have had until now — a free ride that has permitted them to under-price their products.

The answer is a polluter-pays plan — or perhaps you could call it a carbon tax. It is not designed as a punishment for running your air conditioner at full blast or buying a muscle car. It does not punish Joe the Plumber for preferring his Ford F-150 to the public transportation liberals love so much. It does not raise the cost of using or producing fossil fuels: it merely transfers to the producer or the user the costs already being imposed on innocent bystanders. It relies on the price system to cut emissions and decisions by consumers rather than regulations and decisions of bureaucrats.

Surely conservatives prefer the invisible hand to the long arm of the regulator.

A polluter-pays charge can be adjusted so that it does not hit lower-income consumers. Meanwhile, its proceeds can be used to reduce deficits or meet other needs. It reduces the need for taxes on work and risk-taking, which slow economic growth. And because the consensus that such a levy makes sense is of long-standing, detailed versions are on the shelf, ready for introduction, should members of the House and Senate find themselves in meetings to reconcile different versions of revenue-raising bills.

There is lots to like here for Republicans, who need to show voters they care about climate change while nevertheless adhering to good old-fashioned conservative principles. Oh yes, if it turns out that climate change is a hoax or merely a sincere but mistaken misreading of the data, we still end up with a conservative goal — a tax on consumption rather than on productive work and investment.