1. Decide whether the legislation is an ‘international’ or ‘domestic’ policy
This seems like an odd place to start – taxes can only be levied within the remit of a nation, no? – but the same was true of the cap-and-trade legislation. Yet it still got bogged-down in the quagmire of international relations (to be polite) and international prejudices (to be less so). In the cap-and-trade debates, Members of Congress kept pointing to the need to act on climate change because of the US’ place as the largest historical emitter in the world, because doing so was for the ‘good of the planet’, and promising that a domestic market could eventually become a global market. At the same time as doing this, they insisted that the legislation was ‘not another Kyoto’ (the hugely unpopular international treaty). All this did was open up the legislation to the attacks of those who so resoundingly rejected the Kyoto Treaty back in 1997. Why should the US act if China and India aren’t going to? They said. How could the US expect to compete with these new burdens placed on their economy which others would not have to suffer? They protested. If this is an international issue, why isn’t the US trying to solve it with an international solution? They (not unfairly) pointed out. All in all, talking about the cap-and-trade legislation through reference to the international need for action on climate change simply confused the issue, and allowed a host of attacks based not on criticisms of the cap-and-trade policy per se, but on the type of policy approach that Congress was adopting. Any carbon tax legislation must, then, emphasise the domestic benefits of this domestic policy. There is no need (rhetorically) to link it to the international arena, so legislators shouldn’t.2. Decide whether a carbon tax is an environmental, energy, or economic policy issue
The cap-and-trade legislation was promoted on a tripartite basis: it was good for the environment as it capped harmful emissions, would help the US transition to a greener energy mix by implicitly promoting the development of less carbon-intensive technology, and would boost the economy through opening up a new market in emissions trading. While there certainly are inherent linkages between all three of these policy areas when it comes to climate change, and the cap-and-trade legislation did indeed address each to the benefit of the others, rhetorically this strategy was doomed. The logic was that if they could sell the legislation in three ways, chances were that everyone would buy at least one. This logic was flawed. By linking the cap-and-trade legislation to each of these policy issues its supporters opened themselves up to attacks on three-fronts, each of which would have been hard enough to rebut on its own.If the carbon tax is defined as an energy issue, then it will come under attack from the powerful energy lobbies (and their proxies in Congress). They will claim – as they did with the cap-and-trade legislation – that voluntary measures would be better suited to encouraging carbon-intensive industries to re-focus their investment on greener technologies and modes of production. Likewise, Members of Congress from states whose economies depend on carbon-intensive industries (such as coal-mining) will want guarantees and major concessions to be included in the legislation before they even consider supporting it. This is not an insurmountable obstacle, but it will be enough to overcome on its own, without the added complications of making it an environmental and economic issue as well.
If the carbon tax is
communicated as an environmental issue, on the other hand, then the
environmental effectiveness of the legislation (no matter its details) will be
attacked. Just as opponents did with the cap-and-trade legislation, there will
be claims that it is a costly, ineffective, and ultimately unnecessary burden
to bear. Congressional supporters of the legislation will have to develop a
robust defence of how the tax reflects environmental gains. Furthermore, they
will have to develop clear and persuasive arguments as to why these
environmental gains need to be made in the immediate;
claiming that it is a long-term investment in the current economic climate
simply won’t cut it (particularly if it is over hundreds of years). Both
Congress and the public are impatient, they must see the potential for gains
(of any sort) to be delivered quickly by the carbon tax. Otherwise, it is
doomed from the start.
If the carbon tax is
deemed an economic policy – which it almost certainly will be – it will be
savaged by a Republican party whose USP for the coming election (and in all likelihood
for many elections to come) is their determination to never introduce new
taxes. Opponents to the cap-and-trade legislation were quick to label it a tax,
and the Republicans won’t levy taxes on far less popular sources of
revenue (such as banks, or the top 1% of earners), let alone their energy
corporation bedfellows. It is possibly worth trying to label the carbon ‘tax’
as anything but, although the potential for this is already slipping away as
public discussion perpetuates the use of the label. They could call it an ‘emissions levy’, a ‘pollution
penalty’, ‘a corporate down-payment for the future health of the nation’, or perhaps
try to hide it in pseudo-technical terms (‘a fiscal mechanism for sustainable development
based upon annual contributions from corporate stakeholders’, perhaps).
Nonetheless, whatever they may try, it will probably become (or continue to be)
known as a tax (‘carbon’ or ‘climate’) as opponents and reporters alike seek a
concise branding for the policy. In spite of sophisticated arguments as
to where each tax dollar goes to reduce the deficit (thus increasing the burden
on the falling incomes of an ever-strained public), its label alone could be a
carbon tax’s downfall.