Could Climate Change Lead to Guaranteed Basic Income?

February 8th 2017

Mike Rothschild

In the ongoing debate over climate change, it's virtually impossible to get anyone to agree on anything — even on whether it's happening at all. But a group of conservative elder statesmen is hoping to change some minds and convince Republicans that a new tax might not be such a bad thing.

Air Pollution

One aspect of climate science that has gotten some bi-partisan support is the idea of a carbon tax, under which the government would impose a fee on greenhouse gases. That would drive up the cost of dirtier fossil fuels, especially coal, and provide an incentive to use cleaner, renewable sources of energy like wind and solar.

Everyone from environmental crusaders like former Vice President Al Gore to some of the largest oil companies in the world support a carbon tax, seeing it as a way to stimulate innovation in a predictable manner (businesses and investors would know how much the tax might cost them each year, unlike some more volatile cap-and-trade proposals).

The left-leaning Carbon Tax Center advocates for a carbon tax by arguing it "will create powerful incentives inducing policy-makers and individuals to reduce carbon emissions through conservation, substitution and innovation." At the same time, the center-right Climate Leadership Council says of a carbon tax that "no other policy lever can match its economy-wide effects in changing investment decisions and individual behavior."

One group of prominent Republicans is now making a case for a carbon tax to the highest levels of government. And in doing so, they're in effect advocating for another progressive touchstone: the guaranteed basic income.

Led by former Secretaries of State James A. Baker III and George P. Shultz, and former Treasury Secretary Henry M. Paulson Jr., the Climate Leadership Council released a plan this week called, "The Conservative Case for Carbon Dividends."

Under the plan, carbon dioxide would initially be taxed at $40 a ton, generating "an estimated $200 billion to $300 billion a year, with the rate scheduled to rise over time."

Carbon Pollution

The plan proposes to give the majority of the tax revenue back to the public in the form of a tax-free dividend that could reach as much as $2,000 for a family of four. This would be equally distributed to all economic strata,and, according to the CLC, "would increase the disposable income of the majority of Americans while disproportionately helping those struggling to make ends meet."

That's not enough to live off, but it does reflect calls for a basic income in the form of direct payments from the state to the public.

The Carbon Tax Center's Charles Komanoff is voicing his support, suggesting the proposal could be a way to get both conservatives and the public to accept action on climate change. "Republicans looking for a way out of their obstructionist stance on climate have been handed a lifeline," Komanoff said.

The authors of the plan see it as a less burdensome, simpler alternative to other climate policies, and they have an audience to make their opinions matter: On Wednesday, Baker and other carbon tax proponents met with Vice President Mike Pence and several key Trump advisors.