Elections, Energy, Environment, National, Politics, Taxes, Uncategorized

The carbon tax trap: Democratic platform opens new line of attack for GOP

In their quest for party unity, Democrats have been working overtime to accommodate the far left, and especially fringe environmental groups.

The new party platform, for example, dumps the “all-of-the-above” approach to energy policy, which Democrats embraced in 2012. The platform also endorses a carbon tax, or to use the politically correct term, a price on carbon.

“Democrats believe that carbon dioxide, methane, and other greenhouse gases should be priced to reflect their negative externalities,” the 2016 platform reads, “and to accelerate the transition to a clean energy economy.”

By rejecting “all of the above” and embracing a carbon tax, Democratic officials may have prevented an environmental revolt on the left. But they have also turned energy regulation and energy taxes into major issues this election season, especially for U.S. Senate candidates and other down-ballot Democrats in energy-producing and industrial states.

icon_op_edIn Colorado, we’ve seen Democrats make this mistake before. It even has a name: The Udall trap.

Two years ago, U.S. Sen. Mark Udall (D) was running for a second term in the Centennial State. Polls in early 2014 showed Udall in the lead, but there was a growing divide within the party over energy. The environmental wing, led by U.S. Rep. Jared Polis (D), wanted the party to embrace the anti-fracking agenda. The party establishment, led by Gov. John Hickenlooper (D), pushed back hard. Colorado is one of the nation’s top energy-producing states and oil and natural gas development is a major provider of jobs and tax revenue.

Udall, on the other hand, played both sides. He rejected the worst ideas of the anti-fracking left – a series of ballot measures that would have crippled the state’s energy sector – and pushed to open new export markets for U.S. natural gas. But he also worked hard to appease the left. His energy plan replaced “all of the above” with a new policy – “best of the above” – to show favoritism towards wind, solar and other renewables. And most of all, he voiced support for “a common-sense price on carbon.”

Udall didn’t say how much the price should be, but the environmental left was more than happy to fill in the blank. The Citizens Climate Lobby, for example, would phase in a carbon tax of more than $100 per ton over 10 years, adding more than $1 a gallon to the price of gasoline. His wife Maggie Fox – a key adviser to environmental activist and former vice president Al Gore – endorsed a similar plan.

But when the news media asked Udall’s campaign a simple question – how much should the price on carbon actually be – the senator was silent. This came back to haunt the senator when he debated his opponent, then-Rep. Cory Gardner (R).

“What is the price that you would put on carbon?” Gardner asked Udall at a debate in Denver. Udall’s response was evasive. “Let’s lean forward,” he said. “Let’s create our future. Congressman Gardner’s looking backwards. Let’s look forwards and embrace the future and embrace these technologies. They’re right there for the taking,” Udall concluded.

Gardner wasn’t deterred. “What is the cost that you will put on carbon with your tax?” he asked again.

Again, Udall would not say how much people should pay. Instead, he said “we’ve got the best system in capitalism, we’ve got the best entrepreneurs, and we’re going to innovate.” To these bromides, he added: “That’s how we make the future.”

Gardner was unrelenting. “We hear people talk about putting a price on carbon, but they won’t talk about how much that price of carbon is,” he said. “Let’s just have an answer on what is the price,” he said, before throwing out some hypothetical carbon costs. “Senator Udall, am I not going high enough?” Gardner concluded.

Udall was, in a word, stumped. “Congressman, the, it, I … I’ve answered your question,” he said.

Except he hadn’t. And Udall never did answer the question. Frankly, there was no good answer. Suggesting that people should pay higher gasoline prices and bigger utility bills would anger many voters. Rejecting these higher costs would anger his environmental base. But saying silent was a losing strategy, too. It told voters they would be slugged with some kind of increase in their energy bills, but they wouldn’t know how much until after the election.

On election day, Gardner narrowly beat Udall. Energy wasn’t the only issue in the race, of course, and the Udall campaign had other problems too. But the carbon tax certainly didn’t help his cause.

That’s the quandary that now faces Democratic candidates up and down the ballot. If they support the Democratic platform, and the carbon tax that goes with it, they must answer a simple question: How much? If they oppose the carbon tax, they risk angering their supporters and driving down voter turnout from their base. And if they fall into the Udall trap – playing both sides by supporting a price on carbon, without saying what the price should be – the outcome isn’t going to be much better.

To be clear, the prospect of a federal carbon tax is real. Hillary Clinton’s campaign has said she’s open to carbon tax. The idea is supported by one of the world’s largest oil and natural gas companies, and some conservatives have shown interest in a carbon tax, too.

A carbon tax isn’t just a few aspirational lines buried inside an obscure party platform. It was tried in the 1990s by the Clinton administration, under the name “BTU tax,” and tried again by the Obama administration using a different name: “cap-and-trade.” If this idea of a carbon tax is back once again, the voters deserve to know where the candidates stand.

Most importantly, the candidates who support a carbon tax – or a price on carbon, if they prefer – will have to explain how much the tax will be and how much more consumers will pay on their energy bills. To them, it may seem like a trap, but it’s one they made for themselves.

Simon Lomax is an associate energy policy analyst with the Independence Institute and a consultant who advises pro-business groups. From 2004 to 2012, he was a news reporter covering energy and environmental policy in Washington, D.C. Contact him at simon@i2i.org.


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