The Carbon Tax Shell Game

Posted on Fri 03/12/2021 by


By Duggan Flanakin ~

The oft-spoken premise that there is a “social cost of carbon” (SCC) has led to a myriad of proposals for taxing calculated carbon dioxide emissions from motor vehicles. The idea is to tax (and legislate) “carbon” out of existence by using those taxes to subsidize electric vehicles.

The latest of these proposals has come, surprisingly, from a well-funded group of college Republicans who call themselves Young Conservatives for Carbon Dividends (YCCD).

But is the goal of carbon taxation a conservative idea?

The oft-stated primary purpose of taxing carbon dioxide emissions is to hasten the “inevitable” transition to an all-electric vehicle fleet and a total phaseout, perhaps within a decade, of the nation’s 275 million gasoline- and diesel-powered vehicles. That’s 27.5 million junked vehicles a year and 27.5 million more “replacement” vehicles.

Sounds more like a boondoggle. Just what are these people seeking to conserve?

If you want more of something, subsidize it; if you want less of something, tax it. Ronald Reagan said that.

Joe Biden wants as “carbon dividends” less gasoline, more wind- and solar-powered electric vehicles. Are these “dividends” not hastening the Chinese conquest of America?

The Heritage Foundation, which IS conservative, was widely recognized as President Reagan’s favorite think tank. As Reagan speechwriter John McClaughry points out, President Reagan never supported a tax on carbon. Taxing carbon means less affordable fuel to heat homes; drive to work, school, and church; till fields and harvest crops; and bring goods to stores and tables.

Various Heritage Foundation studies (here, here, here, and here, to name a few) of SCC models have rejected the carbon tax idea on grounds that the so-called social costs of CO2 emissions are easily manipulable and that the often-ignored social BENEFITS may well exceed their legitimate costs. [Worldwide, are people better off today than before gasoline?]

The Biden Administration demands that “renewable energy” (including electric energy) power the entire society (including our vehicles). By 2040. Or 2035. Or 2030. The carbon tax is a tool for achieving that result.


Or is the carbon tax – based on the myth that carbon dioxide is a pollutant – another part of the unelected bureaucracy’s regulatory strategy to use subsidies and taxes to shut down entire U.S. industries and force their elitist, all-electric vision on everyone, no matter the cost?

Surely, the conservative position is against subsidies and unequal taxes to skew the market so as to favor some and punish others, often with resultant significant costs to society.

But who benefits from sacrificing U.S. energy dominance with the resultant increased dependence on Iran and China?

The plight of smog-ridden Los Angeles has driven the imposition of nearly all U.S. air pollution controls on motor vehicles. As Rachel Frazin recently reported, nearly a third of the states have already adopted California’s very stringent vehicle tailpipe standards, with more likely to follow.

But why should America pick California as the canary in the coal mine? Or better, why did California set its statewide standards to meet the unique needs of influence-messaging Los Angeles and its jet-set aficionados?

Unlike anywhere else in America, Los Angeles is plagued by a temperature inversion ceiling that traps pollutants and creates smog 260 days a year. Nowhere else even comes close. And the origin of this unique air pollution problem long predates the automobile.

Spanish conquistadors in 1532 were shocked by smoke levels from campfires in nearby Native American villages and named the area (essentially Los Angeles County) the “Bay of the Smokes.” Despite the natural smog, and a water shortage that prompted aqueducts that rival those in ancient Rome, the greater Los Angeles area has become a major metropolis.

The nearly 8 million vehicles registered in Los Angeles County are subject to superstrict emission controls. Yet despite major reductions in emissions from California-compliant vehicles, smog levels during last September’s heat wave were the highest in 30 years.

But should Los Angeles dictate the entire nation’s vehicle emission standards, and thus vehicle choices and costs? Is this a conservative approach to public policy?

Apparently, YCCD neophytes believe so. So do their well-heeled power brokers (and funders), who call themselves conservatives.

At the YCCD booth at the recent Conservative Political Action Committee (CPAC) conference in Orlando, I quickly learned they solely focused on support for carbon taxes. I was surprised to see the larger than life-sized cardboard image of anti-tax Ronald Reagan (alongside one of “read my lips” George H. W. Bush).

“We’re hiring!,” a handmade sign announced, letting CPACers know there is money in carbon tax advocacy. Their teensy flyer told us, “Authored by Reagan’s right-hand men,” “Endorsed by American business leaders,” “Unleashes clean energy innovation.” And more.

The young man who greeted me with a smile provided a poorly rehearsed spiel about how the 501(C)(4) YCCD was NOT the brainchild or Ronaldus Maximus but of multiple big government Republicans. The spearheads were two aging Reagan and Bush advisors – former Secretaries of State George Shultz (very recently deceased) and James A. Baker III.

YCCD’s website speaks of an “advocacy organization that aims to mobilize young conservative leaders in support of the pro-growth, pro-innovation Baker-Shultz Carbon Dividends Plan … and lay the groundwork for a free-market climate breakthrough.”

The YCCD is also supported by major oil companies who surely cannot seriously think that increasing the price of gasoline and pushing gasoline and diesel vehicles off America’s roads will increase gasoline sales or corporate profits. [Unless one accounts for blackmail.]

Curiously, none of the YCCD staff at the booth knew whether environmentalists include the oil and gas depletion allowance in their claims of federal subsidies; let alone what it is. Maybe they just needed any job. Or maybe they just wanted to be liked. [Sorry, GOPher, “no matter how hard you try, you really are just not good enough to be as cool as us!”

The carbon tax is really a tired old idea first proposed in 1973 by David Gordon Wilson, the late British-born MIT engineering professor who championed the modern recumbent bicycle.

Scandanavian auto makers decades ago committed to electric vehicles. Finland first imposed a tax on CO2 emissions in 1990 and was followed a year later by Norway and Sweden. Norway also leads the world in electric vehicle purchases per capita. And no wonder.

Norway, which relies heavily on pollution-free hydropower, began subsidizing EV purchases in 1990, then removed the 25 percent sales tax and exempted EVs from the road tax and from tolls on ferries. They even offer EVs free parking and, since 2005, use of the bus lanes.

Recent studies confirm the long-held belief that EV owners are much wealthier than owners of gasoline-powered vehicles – and thus much less apprehensive about giving up the old jalopy. Just one comparison tells the tale: regular Ford Focus buyer, age 46, annual income $77,000; Ford Focus electric buyer, age 43, annual income $199,000.

Does favoring or following after the rich, heavily Biden-voting young rulers sound conservative?

Or is the YCCD just another outbreak of the politics of envy?

Duggan Flanakin is the Director of Policy Research at the Committee For A Constructive Tomorrow. A former Senior Fellow with the Texas Public Policy Foundations, Mr. Flanakin authored definitive works on the creation of the Texas Commission on Environmental Quality and on environmental education in Texas.

Read more excellent articles at CFACT