Glenn Hubbard and Martin Feldstein are Republican economists. The former was an adviser to George W. Bush, the latter to Ronald Reagan. Both cheerleaded the passage of the Trump tax cuts in the fall of 2017, publishing exceptionally rosy estimates of the legislation’s macroeconomic benefits.
These aren’t RINOs, or center-right technocrats. They’re among the most prominent rationalizers of upward redistribution within the GOP firmament. And they just endorsed (what at least appears to be) a plan for the government to slowly euthanize the fossil fuel industry so as to avert catastrophic climate change.
In a letter published by The Wall Street Journal Wednesday night, four former chairs of the Federal Reserve (Yellen, Bernanke, Greenspan and Volcker) and a long list of former White House economists from both parties called on the U.S. to adopt a tax on carbon emissions as soon as possible, and to return all the revenue generated by such a tax to the American people, in the form of “equal lump-sum rebates.” The letter further stipulates that the carbon tax “should increase every year until emissions reductions goals are met,” and that the U.S. should impose “a border carbon adjustment” tax on imported goods from nations that do not themselves have carbon taxes. The latter provision would “enhance the competitiveness of American firms that are more energy-efficient than their global competitors” while creating “an incentive for other nations to adopt similar carbon pricing.”
Notably, the letter does not specify an initial rate for the carbon tax, nor what the “emissions reduction goals” should be. But if one assumes that the authors endorse the emissions targets set under the Paris agreement, then the tax they are proposing would ostensibly grow very steep, very fast. According to the UN Intergovernmental Panel on Climate Change (IPCC), global carbon emissions will need to be reduced by 45 percent by 2030 in order to keep warming below 1.5 degrees Celsius above pre-industrial levels (the most ambitious target set under the Paris agreement). To keep warming below 2 degrees Celsius, emissions would need to be cut by 30 percent by the end of the next decade.
Either way, Hubbard and Feldstein are ostensibly calling on the government to reduce the profitability of the fossil fuel industry — a major GOP constituency — so as to combat climate change, while simultaneously establishing a (tiny) universal basic income.
One could reasonably describe this as too little, too late. But it is also a great deal more than most liberals would have expected from these particular economists.
The letter is certain to prompt exactly zero response from the GOP-controlled senate or White House. In an adorably (and/or disingenuously) naïve aside, the bipartisan group of economists stipulate that the carbon tax should not be used to finance any public bureaucracy so as to “avoid debates over the size of government;” as though the Republican Party’s opposition to climate action were rooted in an abiding commitment to smaller government, rather than to advancing the mercenary interests of their largest corporate shareholders.
Nevertheless, if and when the Democrats regain unified control, the bipartisan letter very well might help persuade moderate Democrats (and perhaps a few moderate Republicans) that they should do something to prevent their great-grandchildren from perishing in the end times.