No Democratic candidate can secure the 2020 presidential nomination without addressing climate change. Thus, it was expected when Kamala Harris was questioned about her support for the Green New Deal (GND) at her recent CNN town hall.

Harris confirmed her support, but she needed to elaborate further. She labeled climate change as an "existential threat," emphasizing the necessity for children to have access to clean air and water and the importance of investing in renewable energy sources like solar and wind. While these statements are typical for a Democratic candidate, as Brett Hartl from the Center for Biological Diversity noted in the Washington Examiner, merely endorsing the GND's objectives isn't sufficient; the specifics matter significantly.

A critical detail to consider is the incorporation of a carbon tax within the GND framework. Representative Pramila Jayapal (D-Wash.), a co-chair of the Congressional Progressive Caucus, discussed this topic with E&E News. She remarked that progressives have had mixed feelings about a carbon tax, stating that while no one wants to eliminate it as an option, there are acknowledged challenges.

Some advocates for the GND view a carbon tax as inadequate, akin to trying to extinguish a forest fire with a garden hose. They are alarmed by recent U.N. reports and the National Climate Assessment, which indicate that time is running out to avert a global disaster. They believe a carbon tax might be a step in the right direction, but it is merely a small step. They are pushing for significant and rapid changes.

My response to these concerns is that a carbon tax can be a powerful mechanism if Green New Deal supporters choose to leverage it fully. In fact, it should be a fundamental element of the GND. Here are several suggestions for transforming a potentially timid carbon tax into a much more impactful one.

IF YOU THINK A CARBON TAX IS NOT ENOUGH, RAISE IT

The simplest approach for those who believe a carbon tax lacks ambition is to increase its rate. Many proposals suggest a tax around $40 per ton of CO2, based on estimates from the previous administration regarding the social cost of carbon. Typically, each dollar of tax per ton of CO2 raises gasoline prices by about one cent per gallon. Therefore, a $40 tax would elevate gasoline prices by 40 cents per gallon, which might not significantly influence current prices given that gasoline is at a historical low.

Proponents of more aggressive action can cite estimates placing the social cost of carbon well above $40 per ton. For instance, a study by Katharine Ricke and colleagues in Nature Climate Change noted estimates ranging from $10 to $1,000 per ton, with a median estimate of $417 per ton. A carbon tax of $400 would align U.S. gasoline prices with those in countries like the Netherlands and Germany, where consumers tend to favor more efficient vehicles and public transit over personal car use.

In summary, a carbon tax is a versatile policy tool that can be adjusted according to the desired pace of action against climate change. Moreover, increasing the tax rate is just one method to enhance its effectiveness. Here are additional strategies.

BROADEN THE TAX

Many current proposals confine carbon taxes mainly to fossil fuels. This tax would be applied at the extraction point and subsequently passed on to consumers through elevated prices at the pump or on utility bills. While fossil fuels are responsible for about three-quarters of human greenhouse gas emissions, emissions from industrial processes, such as cement production, are equally concerning and should also be taxed. A border tax could address emissions from goods produced overseas for U.S. consumption.

Additionally, consider methane, a greenhouse gas more potent than CO2. Approximately one-third of methane emissions are linked to fossil fuel production and distribution, particularly natural gas, along with coal and oil. This source of emissions should also be taxed based on its CO2 equivalent. If certain emission sources, like natural gas pipeline leaks, remain under direct regulation, the social cost of carbon set by the EPA should align with the tax level.

Over 35 percent of methane emissions originate from agriculture, with livestock contributing up to 80 percent through enteric fermentation, manure management, and feed crop cultivation. A truly ambitious carbon tax would encompass the agricultural sector, particularly livestock.

A TWO-WAY CARBON TAX TO REWARD CARBON REMOVAL

The process of removing carbon from the atmosphere and storing or recycling it as fuel could significantly mitigate climate change. While this can be expensive with current methods—previous estimates were as high as $600 per ton of CO2—emerging techniques may lower these costs considerably. A carbon tax that works both ways—penalizing emissions while rewarding carbon sequestration—could catalyze this process.

Even if the initial carbon tax is below the cost of sequestration, a premium rate for carbon removal could incentivize immediate action. For instance, if the carbon tax is set at $400 per ton, but removal costs are $600, offering a 2-for-1 bonus for carbon removal for a limited time could make the process profitable, with costs decreasing as technology advances.

SPEED RESPONSE WITH BUYOUTS

An aggressive carbon tax would deter the construction of new fossil-fuel power plants and promote the purchase of more efficient vehicles. However, both industrial operators and consumers might continue using outdated equipment due to sunk costs. To address this, part of the carbon tax revenue could fund a buy-back program to accelerate the phasing out of old, high-emission equipment. California’s Cash for Clunkers initiative, which offers up to $4,500 for vehicles failing emissions tests, could serve as a model for everything from old refrigerators to large coal-fired power plants.

THE CASE FOR TECH-NEUTRAL SOLUTIONS

The proposals mentioned share a key characteristic: they are all tech-neutral. They do not attempt to predict which green technologies will succeed, whether it be algae diesel or advanced energy storage.

Choosing winners among various green technologies is inherently challenging. Given the uncertainty about what will work, providing uniform incentives through a tech-neutral carbon tax is more pragmatic than trying to select the most promising alternatives.

A broad, tech-neutral approach also mitigates the risk of special interests influencing technology selection. Simultaneously, it reduces the likelihood that ineffective solutions persist despite evidence of their failure. The Renewable Fuel Standard, which mandates the use of corn-based ethanol, exemplifies this issue—while environmentalists have moved away from ethanol, agribusiness interests have not.

In contrast, implementing a carbon price is the epitome of tech neutrality. It offers an unbiased signal across various methods for reducing emissions, allowing for adjustments based on the perceived urgency of the climate crisis. The tax could be applied narrowly to fossil fuels or broadly to include industrial emissions, agriculture, carbon removal, and any other desired areas.

So, Green New Dealers, what’s not to love about a carbon tax?

Originally published at NiskanenCenter.org. Click here for a slideshow on the Green New Deal: Aspirations and Alternatives.

The Niskanen Center is a nonpartisan, nonprofit think tank focused on promoting an open society through active engagement in policy discussions. It shares concerns with liberals and progressives about social and economic inequality, embraces evidence and pragmatism like moderates, and recognizes the wealth-creating potential of free markets as conservatives and libertarians do.

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