Rather unexpectedly, Republicans have become a minor font of ideas on fighting climate change. There’s been talk of clean-energy tax credits, a boost to carbon-capture technology, a renewed push for nuclear power, even a new “Roosevelt Conservation Caucus” dedicated to green issues. Above all, they say, the fight against climate change must take advantage of American innovation.
That’s no doubt true. And Republicans are to be commended for finally grappling with this problem. Unfortunately, most of the ideas they’ve aired so far are unlikely to achieve their goals.
One plan reportedly under consideration would create a government fund to invest in clean-energy companies. That sounds helpful but is in fact a recipe for failure. Politicians have no aptitude for identifying workable or cost-competitive ideas, and their incentives — such as maximizing jobs — are at odds with the market’s. In all likelihood, such a fund would crowd out private investment, prop up unpromising companies at taxpayer expense, and thereby actually reduce the urgency to come up with viable solutions. Surely Republicans remember a solar-panel company called Solyndra?
Another plan involves pumping lots of money into carbon-capture research and development. Much depends on the details, but again, the right way to support an experimental technology isn’t to lard businesses in politically expedient districts with loan guarantees and other blandishments. Instead, Congress should fund research programs at labs and universities. That would help avoid cronyism, build a skilled workforce, and spread the benefits of technological progress more widely.
But with a few laudable exceptions, Republicans are ignoring the best approach of all — one that would accord with the party’s views on market economics and do more to encourage innovation than anything else. They should get behind a carbon tax.
By raising costs on companies that emit carbon dioxide, such a tax would encourage them to find inventive ways to cut down on fossil fuels while allowing green technologies to compete on a fair footing. A tax set to rise gradually over time would spur long-term investment in clean-energy infrastructure and the development of cleaner products and businesses.
If made revenue-neutral, moreover, such a plan wouldn’t amount to a tax increase and wouldn’t enlarge the state: It could be paired with equally large cuts in other taxes, which could be designed to more than offset increased energy costs for ordinary taxpayers.
FROM AN EDITORIAL IN BLOOMBERG OPINION