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Is AEI Going to Push a Carbon Tax?

Disturbing reports are reaching us of a hitherto-secret meeting at the American Enterprise Institute Wednesday afternoon looking at the feasibility of persuading Congressional Republicans to back a “revenue neutral” carbon tax. The thinking behind this is opaque, at best. Republicans defeated the president’s plan for a cap-and-tax policy on greenhouse gases, and the anger in response to Congress’s even consider raising the price of gas and electricity in an attempt to fine-tune the temperature in 80 years’ time was such that it contributed to the GOP landslide in 2010. Yet now Republican strategists and thinkers are considering drinking deep from this poisoned chalice. Even if AEI was just providing the venue, one has to ask: What are they thinking?!

The idea that a tax could be “revenue neutral” must be part of the appeal. As my colleague Myron Ebell points out, there are multiple problems with the idea of revenue neutrality. First, it never works. A new tax will quickly be raised. Second, the poorer people are, the higher the percentage of their income that is spent on energy. Poor people already don’t pay much or any income tax. So a consumption tax offset by, for example, cuts in the corporate-income tax rate will be highly regressive. Third, the only way a carbon tax will reduce fossil-fuel consumption is if it’s set quite high. And the only way a carbon tax will raise much revenue is if it’s set quite high. Thus they must be advocating European levels of taxation. Say $5 dollars a gallon of gasoline. Roughly $500 per ton of coal (which is currently selling for between $9 a ton for Powder River Basin coal to $65 a ton for Appalachian coal ).#more#

The agenda of this meeting, and its participants, complete with notes as to their affiliations, are as follows:

Price Carbon Campaign / Lame Duck Initiative: 

A Carbon Pollution Tax in Fiscal and Tax Reform

Meeting V, Wednesday, July 11, 2012 

American Enterprise Institute, 1150 17th Street, N.W.

12:45 – Lunch

1:30 – Background and orientation

1) Welcome from AEI (Kevin Hassett [Director of Economic Policy Studies, AEI])

2) Brief introductions from participants 

3) Overview of agenda and facilitation format (Alden Meyer [D.C. Office Director and Director of strategy and policy, Union of Concerned Scientist; long-time leading environmentalist who previously served as executive director of the League of Conservation Voters and Environmental Action])

4) Background and context for meeting (Tom Stokes [Head of the Climate Crisis Coalition Coordinator Pricing Carbon Campaign])

Session I: Update on posture of key constituencies


1:45 – Congressional Republicans, Romney and Business Leaders

              Detoxifying climate policy for conservatives.

              Discussants: Kevin Hassett [Director of Economic Policy Studies, AEI], Dave Jenkins [Vice President of Government and Political Affairs at Conserv America, formerly known as Republicans for Environmental Protection], Eli Lehrer [President of the R Street Institute and Research Fellow at the Independent Institute; former Senior Fellow at the Competitive Enterprise Institute and Vice President at the Heartland Institute; and former staffer to Senate Republican Leader Bill Frist], Bill Newman [Legislative Consultant to Clean Air, Cool Planet]

2:15 – Progressive/Social justice groups

                Discussants: Danielle Deane [Director of Energy and Environment Program, Joint Center for Political and Economic Studies], Tyson Slocum [Director of Energy Program, Public Citizen], Chad Stone [Chief Economist, Center on Budget and Policy Priorities]

2:45 – Economists and deficit hawks

                Discussants: Autumn Hannah [Senior Program Director, Taxpayers for Common Sense], Aparna Mathur [resident scholar, AEI], Diane Lim Rogers [chief economist, Concord Coalition], Rob Shapiro [ex- U.S. Under Secretary of Commerce for Economic Affairs under President Bill Clinton; currently Chairman of Sonecon and Senior Fellow at the Georgetown University School of Business; also advisor to the International Monetary Fund and chairman of the U.S. Climate Task Force]


3:15 – Break

Session II: Framing and selling a carbon pollution tax


3:30 – Initial thoughts on a post-election public opinion and education campaign 

                Discussant: Kevin Curtis [Program Director of Al Gore’s Climate Reality Project; Board of Directors, Climate Action Network]

4:00 – Building bipartisan support and navigating Ways & Means

                Discussant: Tom Downey [prominent DC lobbyist; former Member of Congress—D-NY—1975-1993; married Carol Browner in 2007]

4:30 – Honing the case for a carbon pollution tax

               Ian Parry [Technical Assistance Advisor in the IMF’s Fiscal Affairs Department]: IMF book on carbon tax in fiscal context

               Rob Williams [Senior Fellow and Director, Academic Programs, Resources for the Future]: RFF FAQ

               Adele Morris [Policy Director for the Climate and Energy Economics Project, Brookings Institution]: November 13th AEI/Brooking/IMF event & July 12th RFF discussion 


5:00 – Next steps and Wrap-up 

5:15 – 6:00: Gather for informal conversation and light refreshments


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