George Shultz Endorses Carbon Tax – You Were Surprised?

by Marlo Lewis on July 13, 2012

in Features

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Yes, that George Shultz, President Ronald Reagan’s Secretary of State. But not everyone who served with Reagan was a Reaganite. Reagan’s VP, G.H.W. Bush, famously campaigned on a platform of “Read my lips: No New Taxes.” Not two years later he raised taxes in a 1990 budget deal that torpedoed the economy and sank his presidency.

Yesterday, in an interview puff piece penned by two associates, Shultz, a distinguished fellow at Stanford University’s Hoover Institution, called for a ‘revenue-neutral’ carbon tax. This is unsurprising. As the article reminds us, in 2010, Shulz, partnering with Tom Steyer, a Democrat, “led the successful campaign to defeat Proposition 23, a California ballot initiative to suspend the state’s ambitious law to curb greenhouse gases.”

Nothing in the article indicates that Shultz thinks a carbon tax should replace California’s cap-and-trade regime established by AB 32. Nor is there any hint that Shultz would condition the enactment of carbon taxes on repeal of the EPA’s court-awarded power to regulate greenhouse gases via the Clean Air Act.

This pattern is becoming boringly familiar.

As noted here, earlier this week, former Rep. Bob Inglis (R-S.C.) launched a new institute with Rockefeller Family Fund backing to promote carbon taxes as a ‘Republican idea.’ Inglis said nothing to suggest that he views carbon taxes as an alternative to EPA’s greenhouse gas regulations, or that one of his objectives is to rein in the agency and return control over climate policy to the people’s representatives.

Kevin Hassett, economic policy director of the American Enterprise Institute (AEI), a conservative think tank, took heat this week for hosting a secret meeting on carbon taxes titled “Price Carbon Campaign/Lame Duck Initiative.” The agenda looks and smells like, well, what it is: the outline for a strategy session to build the PR/legislative campaign to enact carbon taxes. Participants included such ‘progressive,’ pro-Kyoto organizations as Union of Concerned Scientists, Public Citizen, and Climate Action Network.

Hassett issued the following statement in response to media inquiries:

In recent years, AEI has been accused of being both in the pocket of energy companies and organizing to advocate a carbon tax. Neither is true. AEI has been, and will continue to be, an intellectually curious place, where products aren’t influenced by interested parties, and ideas from all are welcome in seeking solutions for difficult public policy problems.

That doesn’t cut it. Such self-congratulatory platitudes tell us nothing about where Hassett stands on carbon taxes. If he is opposed to carbon taxes, he should say so. If he supports some kind of ‘grand bargain’ in which carbon taxes replace the EPA’s greenhouse gas regulatory agenda, he should say so. But I doubt that he will advocate such a swap, because the moment he does, the ‘progressives’ — the EPA’s amen chorus — will pick up their marbles and go home. Until Hassett clarifies his position, people will assume the worst, and reasonably so.

Even if Hassett’s objective is to get the EPA out of the GHG regulation biz, the timing of the AEI carbon tax pow-pow could not have been worse. With the unemployment rate still exceeding 8%, now is not the time to call for a massive new tax on energy. Nor is this the time for GOP influentials to launch a carbon tax campaign when the choice facing the electorate in November is largely a choice between a Democratic Party that is anti-energy and pro-tax and a Republican Party that is pro-energy and anti-tax.

But there has always been a wing of the GOP — the “establishment,” “Country Club,” or “Rockefeller” Republicans — who care more about controlling the party than about advancing liberty or even about winning elections. AEI’s Ken Green (a colleague of Hassett’s) hits the nail on the head. In a story on Shultz’s endorsement of carbon taxes, Green told Climatewire:

“There seems to be an eruption of conservatives — very moderate-seeming conservatives, non-tea party, old country club-style conservatives — who are suddenly enamored of carbon tax,” said Kenneth Green, a resident scholar at the American Enterprise Institute.

“I think this is mostly vanity and egotism on the part of these people who are coming forward, to try and reassert the Republican establishment over the tea party revolution,” he added. “I wouldn’t be surprised if we have more of these guys weigh in.”

Update: 5:45 pm, July 13, 2012

BTW, in 2007 Green co-authored a paper with Hassett and AEI’s Steven Hayward (Climate Change: Caps vs. Taxes) arguing that carbon taxes would be better than cap-and-trade, which would be better than an EPA-run system. Today in AEI’s online journal, The American, Ken explains why he “no longer believe[s] that such a tax (or, for that matter, other eco-taxes) can be implemented in the sort of ideal, economically beneficent way that people favoring either individual liberty, free markets, or limited government might sanction.” He concludes: “Even in flush economic times, carbon taxes would be bad policy. When economies are already laboring under too much spending, and are at diminishing-return levels of taxation, implementing a carbon tax would be a mistake.”

Well, Dr. Hassett, what do you think?






Eric Simpson July 13, 2012 at 5:11 pm

Poor old George Shultz is 91 years old. The old guard, and some candidates who have been running for office for so long and so hard that they haven’t even stopped to talk to their constituents in years, have missed the boat. Republicans don’t believe anymore in the leftist perpetrated AGW fantasy, or fraud. Republicans don’t believe in restricting energy use for climate change, even if some tax revenue is generated. Energy is the lifeblood of society.

Follow the Money July 13, 2012 at 9:43 pm

I do not know what “kind” you mean. The money wants cap and trade. Because cap and trade has a widely dirty name it has to be sneaked in. Some have suggested using regulatory means. The latest is hiding it as a carbon tax, which is only temporary, then morphs into cap and trade. That is what was done in Australia. So it is the latest trend. The trend you see is just the money trying to seed public “opinion” in support of the tax, which the pundits don’t realize is a trick.

It worked in Australia, so it will be tried here. Why keep “pretending” so-called “conservative” pundits are not in the pay of special interests, and have goo-goo eyed view for business? Look at Schultz’ current C.V. By the way, Reagan’s cap and trade scam was Star Wars. He wasn’t clean.

Holly Martin July 16, 2012 at 10:08 am

Schultz in his “puff piece” calls carbon “pollution.”
Carbon, or rather, carbon dioxide (CO2) is NOT pollution and we need to stop calling it that.
CO2 is plant food–green plants NEED it to exist. The CO2 level in the atmosphere today is much lower than it was in the distant past. And the increase in CO2 we are experiencing now is benefiting agriculture.

For more on this, see:

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