Republican eminence grise George Shultz addressed a packed room on Capitol Hill Friday to press for a carbon tax. He spent three days in Washington with scientists from MIT and Stanford to talk about advances in alternative fuels, including a potential “game changing” breakthrough under way at Stanford that could quadruple the driving range of lithium ion batteries, putting electric cars on a par with internal combustion engines.
A Californian now at the conservative Hoover Institution who taught economics at MIT and the University of Chicago and is one of only two people ever to hold four cabinet posts, Shultz proposed putting all forms of energy “on a level playing field” by incorporating the cost of the carbon pollution they emit by taxing carbon at its source. Not including carbon emissions in the price of energy, he said, is like a football game where Cal gets 6 downs and Stanford gets two.
Once carbon pollution is included in energy prices, Shultz would “wipe out” subsidies to all fuels, fossil, nuclear and renewable, and let market forces determine the mix.
Carbon tax revenues under his plan would be remitted to consumers periodically in the form of a “carbon dividend check.” Modeled on Alaska’s Permanent Fund, the plan is similar in concept to legislation proposed by Sens. Barbara Boxer (D-CA) and Bernie Sanders (I-VT) except that it would remit all revenues to consumers.
Shultz recalled his days as Secretary of State in the 1980s, when scientists became concerned about depletion of the ozone layer. The science was controversial, he said, but everyone agreed that if a hole was forming in the earth’s ozone later, the results would be catastrophic.
Raising the issue in his twice weekly private meetings with President Reagan, he said Reagan “decided we should have an insurance policy,” which became the Montreal Protocol. “As it turned out, the scientists who were worried were right,” Shultz said. The lesson, he said, is that, “If you wait until things reach a boiling point, you might have missed your moment.”
To skeptics, Shultz pointed to the melting of the Arctic. “An ocean is being created that wasn’t there before,” Shultz said. “Never mind the science; use your eyes. That’s not science, that’s plain observation.”
He dismissed “gigantic meetings” on climate change, such as the Kyoto protocol and Copenhagen. “Having 190 countries sitting around a table doesn’t work,” he said. “Copenhagen was bound to fail.”
The U.S. instead should lead a small group of nations, including China, to explore a pact and then “expand the circle.” Air pollution in Beijing is so bad “that you don’t dare go out of your hotel,” Shultz said. “It’s awful, and they know it.”
After the meeting, Shultz called the Keystone pipeline a no-brainer, arguing that Canada will sell its dirty tar sands oil with or without it; better the U.S. buy the oil and reduce dependence on the Middle East. (With a carbon tax, the Canadian tar sands would be at a steep competitive disadvantage to cleaner fuels.)
Shultz said he installed solar panels on his Palo Alto house five years ago, which have since paid for themselves, and drives an all-electric car. “I’m driving on sunshine, and it’s free,” Shultz said. “Take that, Ahmadinejad.”
As for being a Republican heretic on climate change, Shultz said, “I’m in California. We’re all nut cases out there.”
Find the audio here.