The idea behind the Green New Deal is that everything the United States has done so far to control carbon emissions has been completely inadequate. The more drastically carbon dioxide levels and temperatures are rising, the more drastic and transformative our response will need to be.
But not too drastic, the billionaire investment banker and sometime government policy advisor Steven Rattner wrote in a New York Times op-ed:
Yes, of course, we need a Green New Deal to address the world’s most urgent crisis, global warming.
Just, please, not the one that a flotilla of liberal politicians, including seven of the top Democratic presidential hopefuls currently in the Senate, are signing up for in droves, like children following the pied piper in the old legend.
Our modern-day pied piper, Representative Alexandria Ocasio-Cortez, is trying to lure us into a set of policies that might help save the planet but at the cost of severely damaging the global economy.
Steven Rattner is not a child, to be fooled by some alluring promise of saving the planet. Steven Rattner is an experienced policy hand, who has personally weighed the risks of damaging the global economy.
Specifically, Rattner was lead advisor to the Obama administration’s automobile industry bailout. Ten years ago, the Obama administration had the power to set the terms for the operations of American automobile companies, and used that power to set a timetable for fuel efficiency requirements to get more stringent over the years.
What did that do for the atmosphere? In 2010, passenger vehicles in the United States released the equivalent of 1.667 billion tons of carbon dioxide. In 2016, they released 1.715 billion tons. Since then, the Trump administration has announced that it wants to stop following the Obama standards.
Rattner mentioned automobile mileage regulations in his op-ed—as an example of a counterproductive strategy, raising prices and “encouraging Americans to hang onto their older, less fuel-efficient cars” while also leaving room for manufacturers to promote (or consumers to buy, as he framed it) bigger and heavier SUVs and pickups. He did not discuss whether or not he’d favored the strategy in 2009, or whether he had pursued any other policies to reduce emissions, when he was in a position to do something about the problem.
But now, having failed to accomplish anything to reduce emissions when it would have made a difference, Rattner was arguing that the people who want to reduce emissions now are going about it all wrong.
But now, having failed to accomplish anything to reduce emissions when it would have made a difference, Rattner was arguing that the people who want to reduce emissions now are going about it all wrong. Instead of a sweeping, politically ambitious suite of interconnected policies, Rattner wrote, what politicians should pursue is a heavy carbon tax:
Elegant in its simplicity, the key provision would be the imposition of an escalating tax on carbon. At an initial rate of $43 per ton, the levy would be roughly equivalent to 38.2 cents per gallon of gasoline.
Simple! Just start taxing carbon. Or not entirely simple:
To prevent polluters from fleeing overseas, the tax would be imposed on imports from countries lacking a similar provision while exports to those countries would not be taxed. While difficult to implement, that component is important to work out.
Are there any other obstacles, besides designing and setting in place a differential tax on imports based on their specific individual carbon footprints and the comparative carbon-taxation regimes of their various countries of origins?
Some technical problems would need to be addressed, such as how the higher prices would filter through inflation calculations and create unintended cost of living adjustments to wages and Social Security payments.
Raising fuel efficiency standards is bad, because the higher prices have unintended consequences. Instead, there should be a carbon tax, which will also raise prices, which will have unintended consequences, which will have to be managed.
“But those are details,” Rattner wrote. Were there any more details?
Historically, the politics of even small increases in the gasoline tax have been tough. A 2017 proposal in the House to increase tax by just one penny went nowhere.
Right: beyond being technically complicated to design and subject to unintended negative consequences, the carbon tax would also be a new variation on a policy that is already impossible to pass. That was the realistic and pragmatic alternative to the Green New Deal, offered by a serious grown-up, who was inside the policy decisions that got us where we are today. Why would anyone listen to Alexandria Ocasio-Cortez when they could listen to this?