Solving Climate Change

Regulating

NOT EFFECTIVE.

As conservatives, we’re not so big on an expansion of the regulatory state, especially as a means to solve climate change. Why? Regulation would only apply to American emissions. Most likely, regulated firms would move their manufacturing to countries that don’t regulate emissions. Once there, they’d emit more than they’re emitting here because America is more energy efficient than those non-regulating countries.

Incentivizing

NOT ENOUGH.

Incentives for clean energy are attractive to politicians on the right and on the left. Incentives can work in a rich country like America, and they do help to kickstart new technologies. We celebrate that. The challenge is that the market is so small for, say, power production equipment, that costs never come down enough for poorer countries to afford the cleaner technology. Since emissions anywhere lead to climate change everywhere, incentives that work only in America move us toward the goal, but don’t get us to the goal.

Pricing

THE SENSIBLE ANSWER.

The small-government solution to climate change is simple accountability. Make all polluters accountable for the impacts of emissions by putting a price on those impacts. Sooty electricity, for example, would lose out to solar, wind, hydro and nuclear power—not because government picked them as winners, but because consumers would see that cleaner sources are actually cheaper when you consider the costs associated with burning fossil fuels. Self-interest and good economics would drive innovation—not fickle tax incentives, clumsy mandates or intrusive regulations.

The pricing-in of emissions can be accomplished by a carbon tax. Yikes, a tax?! Yes, that’s exactly what Milton Friedman, the famous conservative economist, suggested as the solution to pollution. This tax would be paired with a dollar-for-dollar reduction in existing taxes or a dividend of all of the carbon tax revenue back to the citizenry, making it revenue-neutral. The tax would be applied to imports coming from countries that didn’t have the same price on carbon dioxide, making it border-adjustable. Since countries around the world want to sell products into the American market, the whole world would follow America’s lead.

There would be no need for an international agreement; no bowing and scraping at the United Nations; no prolonged negotiations; just a bold move by the United States.