05/06/2024

A Growth-Friendly Climate Change Proposal

Climate change landed in a Washington, D.C., court this week as Republican governors and business groups sued to block President Barack Obama’s sweeping regulation of greenhouse gas emissions.

The lawsuit is only the latest example of how polarized politics have made it so difficult to reconcile two divergent priorities: climate change and economic growth.

Across the country, however, voters are being offered a plan that does just that.

In November, Washington state will vote on the country’s first revenue-neutral carbon tax. By embedding the cost of carbon dioxide emissions in the price consumers and businesses pay for energy, such a tax automatically encourages conservation and makes renewable energy more appealing, without regulations and subsidies that distort investment and undercut growth. Because the revenue is used to cut other taxes, it doesn’t crimp incomes or undermine business competitiveness.

In environmentally conscientious Washington state, Initiative 732, as the ballot initiative is known, ought to be a slam-dunk. It isn’t—a poll shows voters roughly split. The reasons are a window into why climate policy is so polarizing.

The ​resistance comes not just from the usual opponents on the right, but even more strikingly from the left. The reason: Many environmentalists see climate change as an opportunity to remake the economic order. They want to use carbon taxes to fund renewable energy and green technology and bolster the incomes of workers and communities they say are most hurt by climate change. Whatever the merits of these goals, the effect is to equate climate policy with bigger government, which makes it harder to achieve broad-based support.

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