Carbon taxes are incredibly controversial.

Winning Hearts and Minds. Some Republican politicians and business groups claim supporting a carbon tax is smart politics because “you can’t beat something with nothing.” They argue that America will end up with more extreme climate policies unless conservatives get behind a CO2 tax.

That reasoning is mistaken on many levels. First, Presidents Obama and Biden, Democratic leaders in Congress, agency officials, climate campaigners, and renewable energy lobbyists have never made a serious proposal to swap federal and state greenhouse gas regulations and large spending programs for a CO2 tax. Why would they? Those policies are far more effective than a CO2 tax in transferring wealth to favored constituencies and expanding the regulatory industrial complex they largely control.  

Second, because a CO2 tax is less effective than other climate policies at hiding the costs of emission reductions, it repels more voters than it attracts. Democratic political strategists understand this well. Hillary Clinton never campaigned for a CO2 tax, even though the 2016 Democratic Party Platform stated that “carbon dioxide … should be priced to reflect negative externalities.”[107] Her campaign manager Robby Mook explained why in a June 2015 email to press secretary Brian Fallon: “to be clear, it’s lethal in the general, so I don’t want to support one.” Clinton campaign chairman John Podesta put the point more harshly: “We have done extensive polling on a carbon tax. It all sucks.”[108]

That has not changed. A February 2021 survey of 1,000 voters nationwide conducted by MWR Strategies found widespread opposition to the costs of “climate action.” When participants were asked how much they would be willing to pay each year to address climate change, the median response was $20. When asked about their willingness to pay for 100 percent renewable power the median response was $10. Sixty-two percent of respondents said the federal government should not impose a tax on CO2 emissions.[109] In a September 2021 Competitive Enterprise Institute poll of 1,200 registered voters, four out of 10 respondents said they were unwilling to spend more than $1 annually in higher gas and electricity prices to mitigate the effects of climate change.[110]

Third, there is a genuine conservative alternative to trillion-dollar climate regulatory and spending programs. It is the free market agenda of unshackling the U.S. economy, including its energy sector. No material force on earth has done more to improve human well-being than wealth creation and technological innovation supported by plentiful, reliable, affordable energy, most of which still comes from fossil fuels.[111] Republican advocacy of CO2 taxes would not undercut political pressure for climate regulations and subsidies. Rather, it would be construed as validating the climate crisis that supposedly demands such policies.

Fourth, endorsing CO2 taxes is politically perilous for conservatives. The struggle for hearts and minds is to no small degree a contest between a pro-energy and anti-tax vision and a pro-tax and anti-energy one. The clear difference between conservatives’ pro-growth energy agenda and progressives’ deep decarbonization agenda is a significant political advantage for conservatives, and was a critical factor in candidate Donald Trump’s surprise victory over Hillary Clinton in the 2016 presidential election.[112]

In 2009, assorted academics and corporate lobbyists warned conservatives that their only chance of defeating the American Clean Energy and Security Act (ACESA, H.R. 2454, 111th Congress), commonly known as the Waxman-Markey cap-and-trade bill, was to advocate a CO2 tax. ACESA passed in the House, seemingly confirming that advice. But ACESA’s passage proved to be a pyrrhic victory. Critics successfully branded ACESA as a “cap-and-tax” bill that would impose a stealth tax on energy. The bill quickly became radioactive, and was a major factor in Republicans gaining control of the House in the 2010 midterm elections.[113]