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Gore's Climate Remedy Must Match Diagnosis

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Al Gore's eminence in the global climate movement is on impressive display in his full-throated defense of climate science in Sunday's New York Times. His essay, "We Can't Wish Away Climate Change," is triple the paper's standard length for op-eds. Only Gore could command such a bully pulpit, and probably no one else could so powerfully restore the sense of urgency that has seeped out of climate policy over the past year.

In Gore's essay, the triple debacles of Climategate, Copenhagen and Congress fall into perspective, and the moral high ground is regained for a renewed U.S. legislative effort to place a stiff price on carbon pollution. From his stage-setting opening lines,

It would be an enormous relief if the recent attacks on the science of global warming actually indicated that we do not face an unimaginable calamity requiring large-scale, preventive measures to protect human civilization as we know it.

To his calling out climate change deniers for misappropriating this winter's East Coast snowstorms,

[S]cientists have long pointed out that warmer global temperatures have been... causing heavier downfalls of both rain and snow in particular regions, including the Northeastern United States. Just as it's important not to miss the forest for the trees, neither should we miss the climate for the snowstorm.

Mr. Gore demonstrates his mastery of both science and metaphor that animated the documentary An Inconvenient Truth and invigorated the citizens' climate movement during the long darkness of the Bush administration.

The former vice-president also presents a reasonable, if backhanded, explanation of the demise of cap-and-trade legislation, the approach long anointed by the Big Green groups (though not by Gore himself, a carbon taxer since the early 1990s), which Lindsey Graham, a rare G.O.P. Senator who "gets climate," reportedly just pronounced "dead."

Some analysts attribute the failure to an inherent flaw in the design of the chosen solution -- arguing that a cap-and-trade approach is too unwieldy and difficult to put in place. Moreover, these critics add, the financial crisis that began in 2008 shook the world's confidence in the use of any market-based solution.

Which makes it both perplexing and frustrating that Mr. Gore's response to cap-and-trade's manifest failure is to repeat not only his endorsement of cap-and-trade before Congress last year, but his latter-day criticism of a carbon tax:

[T]here is no readily apparent alternative [to cap-and-trade] that would be any easier politically. It is difficult to imagine a globally harmonized carbon tax.

This is dreadfully wrong, both substantively and politically.

Mr. Gore's substantive error lies in presuming that a cap-based approach could be harmonized globally. Perhaps this is a legacy of his having championed cap-and-trade in the 1997 negotiations that produced the Kyoto Protocol. Yet now, as then, there are no clear grounds for translating a possible U.S. cap on carbon emissions into limits for other countries. Per capita, Americans generate 4 times as much greenhouse gases as Chinese and 14 times as much as Indians. Why, then, should a U.S. commitment to reduce emissions by, say, 2 percent a year, carry any moral authority in China or India? Indeed, India's per capita emissions could increase by 2% a year for more than 60 years and still not match U.S. emissions declining at the same rate.

A carbon tax, in contrast, is wholly fungible across borders. A fee that raises the price of coal or natural gas by so much in one country will do the same in another. If one country is more efficient in turning energy into goods and services, or enjoys a greater abundance of carbon-free water- or wind-power, then that is an incentive to other nations to step up their efforts and achieve parity. A carbon tax thus creates no unfair comparative advantage. While these facts can't guarantee global harmonization of a carbon tax, they provide a strong basis for it.

Politically, Mr. Gore's dogged support of cap-and-trade sounds tone-deaf. The financial crisis hasn't merely shaken the world's confidence in market-based solutions; it has provoked a profound revulsion among Americans against financial speculation, market manipulation and legislative complexity. Yet all of these are intrinsic to cap-and-trade systems built on trillion-dollar markets in volatile emission permits. It is this political reaction, even more than media-driven denial of climate science, that has turned Congress against cap-and-trade. Mr. Gore underestimates its staying power at his own risk.

There is an alternative to both cap-and-trade and inaction, and it is the very instrument that Al Gore bravely backed for almost two decades: a carbon tax. This is not a market-based approach to be administered by Wall Street insiders, but an incentives-based one applied to all fossil fuels by the U.S. Government. With the revenues redistributed to Americans as monthly carbon checks and the tax rebranded as a carbon fee -- as proposed by Mr. Gore's climate mentor, climatologist James Hansen -- a carbon "fee-and-dividend" would be everything cap-and-trade cannot: simple, transparent, effective and, above all, equitable.

With fee-and-dividend, a majority of us would get back in dividends more than we would pay in the tax, and all Americans would have equal incentives to transition to low-carbon ways of life. Industry would have what it needs to steer the transition: clear, unmistakable price signals to drive investment from dirty coal and imported oil to clean energy and green jobs.

The carbon tax (or fee) movement has missed Al Gore's participation this past year. Yet it has maintained its presence in the grassroots and is gaining a toehold in Washington. Mr. Gore's op-ed essay today shows again how vital is his voice. We carbon taxers call upon him to rejoin the fold and lead the political drive to pass a revenue-neutral U.S. carbon tax this year.

Charles Komanoff, an economist, is co-director of the Carbon Tax Center.

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