The Pro-Tax, Anti-Climate Denialism Republican

a so called Green New Deal. It's a pretty big legislative package, but one of the things it would do is impose a new tax on carbon emissions, these being the primary driver of global climate change. But Democrats, of course, don't have an absolute grip on power here in Washington. To get any bill to become a law, or even just to get it to the President's desk, they'll need the help of more than a few Republicans. So what do Republicans think about a new carbon tax? We spoke

with one who is all for it. Alex Flint is the head of the Alliance for Market Solutions, a group of conservative CEOs and former Republican officeholders who quote respect climate change science and support replacing regulations with a revenue neutral carbon tax. Flint's Republican credentials are pretty strong. He was a senior staffer at the Senate Energy Committee for a long time and also served on the Trump transition team. Before Flint joined the Alliance, he was a lobbyist for

the nuclear power industry. So, just to clarify, Flint is a Republican who wants to create a whole new tax. I started off by asking him, in his dream scenario, how exactly would a carbon tax work. Yeah, so, I think the first thing to do is to appreciate that to address climate change, we have to change some of our behaviors, we have to innovate. We have to innovate the way we use energy and the efficiency of the

ways in which we use energy. So we need to transform the fuels that we're using and the ways that we use them. And so really it's a question of what's the best way to do that, And there are various approaches. We can regulate. We can ban the use of certain technologies and fuels, we can subsidize things, we can give people money for doing certain things that we

like beneficial behaviors, or we can create a market. And so regulating, I guess in this sense would be the government saying fossil fuels are banned starting tomorrow, or a variety of things. I mean, a ban is an extreme version of it. But you know currently, you know, in the last administration, there was a Clean Power Plan that would have affected what we could use to generate electricity. The Cafe provisions, the Corporate Agitive Bridge fuel efficiency standards

made mandated what kind of cars we can buy. The Ethanol Provisions mandated that all of the transportation fuels contain some amount of core as energy. The Dewey Efficiency standards mandate what type of refrigerators, air compressors, light bulbs, et cetera. So it's the government saying you can buy only the following things, or you behave the falling way. And then a subsidy would be we're going to the government's going to give you money if you use solar panels or

wind or other renewables and things like that. Right, and subsidies work, Subsidies change behavior. The challenge is that the size of the energy market is massive. Right. Last in twenty seventeen, globally, one and a half trillion dollars was invested in new energy generation and distribution. When you look at the amount of subsidies it takes to change on market that large. It's massive. It's billions and billions or even trillions of dollars over time. And frankly, we're fiscal conservatives.

The government is running a trillion dollar a year deficit right now, and we're twenty two trillion dollars in debt. The notion of spending our way out of this problem is daunting. Subsidies work, but they're extremely expensive, and you also have the problem that you then have federal policy makers deciding what to subsidize, and the experience has been

that that's not the best way to affect markets. So you're advocating for the third approach, which is creating a market, and it sounds like the way you want to do that is to tax carbon emissions. How would that create a market for low carbon or no carbon energy. So right now, anybody across the economy who emits CO two into the atmosphere does serve for free. And what we're suggesting is that there's a cost associated with doing that.

The cost is manifested through climate change. But what we need to do is we need to assign a price to that through a tax that says, anyone who emits CO two into the atmosphere has to pay a tax associated with that. What that does is it causes everybody in the economy to try to avoid that tax because people don't like that. And based on some of the reading, very cursory reading I've done, it sounds like the big question, though, is what do you do with the revenue that is

then generated from that tax the new tax. The government's going to be collecting a lot of tax revenue. What do you do with that? Does the government then keep it and spend it on other things, or do you get rid of other taxes? So the answer from an economics point of view is that we have to consider all of the taxes that the government collects, right, three and a half trillion dollars a year in revenue. Every year we spend four and a half trillion. That's why

we have a deficit problem. From an economics perspective, taxes on consumption are good because they reduce consumption and they encourage investment. On the other hand, taxes on earnings and income are discourage earnings and income. And one of the things we need to do is we need to be growing the economy by encouraging earnings and income by encouraging economic growth. And so the best thing to do from an economic perspective is to take the revenue from a

carbon tax and cut income and earnings taxes. When you say cut, do you mean cut, like, eliminate, or just reduce drastically. So our suggestion is every dollar that is collected as a carbon tax should be used to reduce earnings and income taxes. You can imagine things like the payroll tax going away, or individual income taxes going down, or the corporate rate going down. All right, so we're implementing a new carbon tax and getting rid of the

income tax and maybe even the corporate tax. How exactly do we do this? And I don't mean how do we write the legislation, but how do you cobble together enough votes in Congress to actually make this thing into a law? More on that after this quick break. So we're talking to Alex Flint, head of a Republican advocacy group that's pushing for a new tax on carbon emissions. I asked about how to make any kind of carbon

tax of reality. Given the current state of our politics, it's very hard to see much of anything happening in this Congress. Right, this is a very divided, difficult time in the Congress. There's but the long term realities will drive action. The evidence the manifestation of climate change is becoming more real to individuals as well as to politicians. So over the next several years there will be an increasing insistence that we address climate. At the same time,

we've got a number of fiscal issues that are ripening. Right. The recently passed individual tax cuts expire in twenty twenty five, so for most people, that means their taxes are going to go up in twenty twenty five. Deficits continue to grow in that timeframe. And at the same time, we have several federal trust funds that go insolvent between twenty twenty three and twenty thirty two, some very big like Medicare and Social Security, in some highway trust fund, pension

barion defits, guarantees, corporation, those sorts of things. So the government faces these fiscal challenges of already set to increased taxes, increasing deficits, trust funds going insolvent, there has to be fiscal reform. So our view is that over the next several years, as climate becomes an increasingly important thing for which there is a political impetus for action, and these

fiscal considerations considered to grow. As we say, a carbon tax is justified by climate and necessitated by fiscal considerations. And yet, I mean, you still have many people in the Republican caucus right now, both in the House and the Senate, who don't believe the climate change is real at all, let alone what we should should do about it. I mean, we had a carbon tax bill in the last Congress. It was supported by three Republicans, two of them are no longer in Congress. We had a resolution

condemning a carbon tax in the last Congress. Only six Republicans voted against that, and I think three or four of them are no longer in Congress. How does the current Republican party, such as it is, get on board with a carbon tax given this that they're so far away from even acknowledging the climate change is even real. So, frankly, I think that's a perspective that is at best a

few months out of dates. We have seen a transformation in the Republican conversation of climate in just the last couple of months now at ams we've been in talking in private two Republicans now for almost two years, and we have seen a willingness to acknowledge the problem and to discuss serious policy responses in private in private, and yes, I recognize that, but what we're seeing is that acknowledgment is real, so is trepidation about the politics of the issue. Now.

Just in the last couple of months, as the Green New Deal has frankly dragged Democrats far to the left to what I consider to be really an irresponsible position, what's happened is they've opened up the middle of the political spectrum for reasonable Republicans, and you've seen people like Congressman Shimkis and Upton and Walden and McKinley, even from West Virginia move into this space acknowledging the climate is real and then asking, as Bill flora Is from Texas said,

a Republican from Texas said, we all acknowledge the problem. What we have to decide on is what to do. And I think that's a genuine representation of where a lot of Republicans are today. Do you think that if Republicans take back the House next year, hang on to the Senate and keep the White House so regain all the branches of the government. Does that make it more or less likely that a carbon tax will be enacted? So we don't do forecasting like that because it's virtually

impossible to be correct. And secondly, recognize that we see two macro trends affecting this. The first, as I said, is the reality of climate change, and the second is the fiscal issues. Those issues are evolving in a way that transcends two year electron milestones. Really, the long term issue here is we have a real problem with climate driven by global population growth, global economic growth. That is compelling. That is going to become more real for Americans as

they feel that experience individually. And secondly, these fiscal issues are on a path where there needs to be some remedy they converge at some time a few years from now. A carbon tax really is going to be competing at the center of that as part of the solution, and it doesn't have anything to do with who wins in

an every two years. That's interesting. So from your perspective, it's almost an I don't want to say an inevitability, but it sounds like regardless of what the political situation will look like in let's say two, three, four years, you feel like the carbon tax will have to become a part of the discussion because of just the fiscal reality and the climate reality, and who wins or who loses is sort of immaterial to you, guys, absolutely, And

there's another factor that drives it. A carbon tax from an economic from a purely economic theory perspective, is the most efficient way to address carbon pollution. So whenever an alternate proposal is put forward, it is going to be compared to a carbon tax, and a carbon tax is going to be relatively affordable. That's interesting, though, I mean, so it seems like I'm just struck by your confidence

that it doesn't matter. It feels like it has to matter a little bit at least who is in power and who you know, what the Republican Party looks like in the future, because I guess if that's the case that it doesn't matter, do you guys not advocate for particular candidates? Do you not back this candidate over that one? So we are very pleased when responsible Republicans speak about climate. Climate change is emerging as an important differentiating issue in

Republican races around the country. There is now a fair amount of polling that indicates that climate change is becoming an important differentiating issue for Republicans running for office. It tends to attract swing voters to support those candidates who recognize the need to address this issue. We think it is going to be an issue that Republicans can run on and be successful in swing districts, which frankly are the districts that determine who controls the majority in the

House and the majority in the Senate. One of the last things I wanted to ask you about is how the fossil fuel industry plays into this, because this may be an incorrect assumption, but I'm assuming that the fossil fuel industry can't be thrilled with the idea of a carbon tax. The fossil fuel industry right now holds so much sway over the Republican Party. There are so many jobs in Republican districts that are tied to that industry.

What you're talking about, the reality that you think is coming around the corner a few years from now, would mean that it seems like the Republican Party just abandons the fossil fuel industry, and I don't see that happening. So let me share a very different perspective to you just suggested. So I'm a Republican energy policy insider. We have a different conversation with certainly the major oil and gas producers than the one that you just sort of

made some assumptions about. The major oil and gas producers are scientifically very well informed. They prefer a carbon tax over the uncertainty of regulations and under the uncertainty of subsidies because substies tend to get turned on and off.

They're actually fairly responsible participants in this. What we need to do is we need to get the politicians increasingly aligned with the fossil fuel companies in trying to create a solution set that can be long term, that can be predictable, because like x on Mobile, x on Mobile recognizes this issue. They have supported a carbon tax, so

have other major oil and gas companies. So if I'm understanding you, right, it sounds like you're saying the problem is not that the Republican Party is tied so closely to the fossil fuel industry. The problem is they're actually out of touch with the fossil fuel industry. So one of the things that we have found is that While Republican politicians were not interested in engaging on climate, corporations

did not go lobby them on climate. They lobbied them on other issues that the members were more interested in working on. Now that we're seeing a change in Republican politicians' willingness to acknowledge climate, we are helping facilitate a transformation in the conversation. So one of the things we do is we take corporations and Republican policy makers and we say, hey,

you all need to get to know one another. You need to know that you member of Congress are talking to us AMS about climate and AMS is talking to this corporation about climate. We need to have this conversation together,

and we are fostering that conversation. It is transforming because now, for the first time, the corporations really are telling these members of Congress, yes, we really do need you, Republican member of Congress to take action on this, and politicians are saying, oh, so you're really serious about this, and the companies are saying, yes, we're really serious about this.

That was Alex Flint, executive director of the Alliance for Market Solutions, talking about Republicans and a carbon tax for much more of our reporting on climate change, taxes, and pretty much everything else environmentally related. Visit our website at news dot Bloomberg environment dot com. That website is news dot Bloomberg environment dot com. Our episode today was produced by myself and Jessica Coombs. Marissa Horn is our editor

and Nicholas and Zelada is our audio engineer. Special production help today from Chuck McCutcheon. Thanks Chuck. The music for this episode of Parts Pavillion is a message by Jazarre and Upstate by Henning Schmidt's thanks for listening.