Breakthrough: What the Gas Tax Holiday Should Teach Us

Three weeks before the Senate is scheduled to vote on global warming legislation, presidential candidates John McCain and Hilary Clinton have both called for temporarily suspending the 18-cent gasoline tax. The proposal is anathema to anyone who is pushing for disincentives on dirty energy. But instead of just railing against political pandering, we should take this as an opportunity to rethink our politics. The big question is: how do we finance the transition to a clean energy economy?

The Center for Climate Progess's Joe Romm answers that a carbon price is not enough. Environmentalists often look to Europe - and its $38 per ton carbon dioxide price - as the gold standard of climate legislation. But Romm warns that the U.S. lacks the political will to reach that high of a carbon price anytime soon. What's more, the New York Times reported last week that Europe has been experiencing a surge in new coal plant construction, despite its high carbon price.

Romm's solution is an immediate moratorium on the construction of new coal plants while we wait for the carbon price to render coal economically irrelevant. But a moratorium on coal would increase energy prices - a tough sell politically during a recession. So how do we motivate people to pay more?

The traditional environmental response is to emphasize the gravity of global warming. If people just understood how serious the problem was, the thinking goes, then they would support price increases that went towards solving it. But opinion research suggests that an approach based on simply educating the public may not garner support for price increases. A 20-year poll by Gallup showed that public concern about global warming hasn't changed much, despite the popularity of films like Al Gore's An Inconvenient Truth. And an ABC News/Time/Stanford poll from 2006 that asked voters whether they would support a gasoline tax to convince people to drive less found that 68 percent opposed the measure.

A carbon tax does not have to be framed as a way to change behavior; in this week's Breakthrough Interview, Monica Prasad advocates for a very high carbon tax that funds clean energy. The caveat is that all the revenue generated go toward clean energy, and not to any of the special interests vying for a piece of the pie. The point of the carbon tax is to make itself go out of existence, so it would be counterproductive for interest groups to be lobbying to keep the cash flowing.

Breakthrough believes the price for carbon should be high enough to make low-cost technologies like wind immediately viable, while raising sufficient funding for clean energy (e.g. $30-$80 billion/year). A much higher price for carbon could potentially raise more money for clean energy, and bring down the coal hegemony faster. But at a time when voter anxiety about the economy is rising, legislation focused centrally on raising energy prices to deal with global warming is bound to be a hard sell.

Given the circumstances, what's the best strategy to transition to a clean energy economy as quickly as possible?

Our answer is that we need to stop framing public policy as a response to global warming apocalypse. Instead, we should start talking about how to create a new clean energy economy that also addresses voters' concerns about energy prices, jobs, and national security. When the gas tax is reframed as a funding mechanism for clean energy, voter support increases. Asked in the same survey as above whether they would support a gas tax that would fund renewable energy research, 64 percent of voters approved. The lesson: making clean energy cheap is much more popular politically than making dirty energy expensive.

Making clean energy actually - not just relatively - cheaper than dirty energy is a solution that deals with global warming not only in the U.S., but also in China, where emissions surpassed our own last year. We could shut down every coal plant in the U.S., but there is little reason to believe that China would follow our example. Only when the real, unsubsidized cost of clean energy drops below that of coal will the developing world abandon its coal plants. Until then, we can hardly begrudge them for using the cheapest energy possible to pull their people out of poverty.

There is a lot that Romm, Prasad, and Breakthrough agree on. We're concerned about people looking to the carbon price as a panacea, we're concerned about an environmental politics that is vulnerable to slumps in the economy, and most of all, we're concerned about how to foment a global transition to a clean energy economy as quickly as possible. These are complicated issues, and a lot of open questions remain. We'd like to hash things out with our readers - regulation, taxation, and investment can all play a role, but what would you put at the center of your strategy?

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