Climate Change: The State of Emissions and the Trump Administration
Climate change is a ticking time bomb sitting under humanity’s feet. Environmental scientists predict that within years billions could die from famine, heatwaves, floods, and resource wars.
Current climate modeling cannot remotely capture the true effects of warming, as every aspect of human existence depends on a balanced biosphere. From economic stability to social cohesion, ecosystem decline is a risk magnifier that exacerbates every societal issue.
Despite the existential threat of climate change, the United States has abandoned humanity and science in favor of profit, actively undoing progress on emissions reduction. Hours after taking office, President Trump withdrew the U.S from the Paris Climate Accords, a ground-breaking multilateral treaty designed to limit greenhouse gas (GHG) emissions. In the first week, his administration fired leading climate scientists, appointed an EPA director with strong ties to Big Oil, and instructed the agency to reclassify GHGs as non-harmful substances.
Although prospects for climate stability appear increasingly bleak, there is a simple and effective economic policy that can advance global decarbonization: the Border Adjusted Carbon Tax (BACT).
Carbon Taxation: Explained
Carbon taxation is widely endorsed by leading economists and scientists as the single most effective policy for promoting sustainable economic development and preventing existential GHG emissions. Modelling suggests a tax at just 50$ per ton of carbon could facilitate up to 90% of the emissions reductions needed to meet the Paris Accords.
Under a carbon tax, the government calculates the average emissions produced during the manufacturing of a good, which value can be taken to tax businesses that harm the planet. The logic behind the tax is relatively simple. Goods that cost large amounts of GHGs to produce will cost more, incentivizing the production and consumption of sustainable alternatives. Markets will always reward short-term economic gain over long-term environmental sustainability. Carbon taxation makes these one and the same.
Alongside decarbonizing supply chains, a carbon tax accelerates the global transition towards renewable energy. As the cost of pollutive goods increases, renewables become an attractive alternative for everything from power generation to manufacturing and transportation. While demand for renewables has increased globally, studies predict the industry is not growing fast enough to meet net-zero targets.
The most widely cited problem with conventional carbon taxation systems is the risk of offshoring emissions. If the tax is only applied domestically, companies could relocate manufacturing to country’s with lax environmental standards, exacerbating the climate crisis. After the EPA tightened lead regulations, for example, exports of used lead-acid batteries to Mexico surged.
The United States is the world’s leading importer and second largest exporter of goods, generating about $5.5 trillion in global revenue. By applying the tax at the border, both imports and exports are encouraged to decarbonize. Even if companies offshored their pollutive methods to another country, they would bear the cost of pollution every time they exported or imported into the U.S.
A border-adjusted carbon tax utilizes economic interdependence to push trading partners and multinational corporations to decarbonize. Countries worldwide would be incentivized to quickly adopt the policy to secure trade advantages, keep their economies afloat, and internalize lost revenue.
Carbon Taxation: The Republican Case for Adoption
Ideally, climate change should be a bipartisan issue, yet it remains deeply caught up in partisan divides. Republicans often view climate change as a natural phase in Earth’s biosphere, overlooking the significant impact that GHG emissions have on global warming. To break partisan gridlock, the Democratic party should shift the conversation about climate change from an existential issue towards an economic one. Climate change is not just a threat to human survival, but a long term economic disaster. Climate change could force countries to waste billions on infrastructure repair, healthcare systems, and military buildup from the lingering threat of resource wars. Studies indicate that rising temperatures are associated with a 20% decline in GDP, widespread asset devaluation, and billions of dollars in infrastructure repair costs. If the GOP’s main goal is prioritizing economic growth and stability, then addressing climate change is more aligned with conservative values than ignoring it.
However, increasing the cost of goods and forcing a transition away from fossil fuels sounds unworkable especially under a Republican administration. After all, why change your game plan when you are winning? In 2016, roughly one in three dollars donated to Republican politicians could be traced back to the oil industry. In the previous election cycle, the fossil fuel industry donated a record $445 million to Republican campaigns. To say the least, convincing the leading party to bite the hand that feeds them is an uphill battle. But if properly framed, carbon taxation could easily fit within a broader Republican platform.
Whether or not the GOP will admit it, the oil industry is in decline and relying on it as a source of campaign funding is a comfortable attachment to a sinking ship. Demand shocks from price fluctuations are inevitable and will only increase with the speed of renewable adoption. While the price of oil continues to rise and fall, the average cost of renewables is declining at an astonishing rate. Since 1990, the price of wind power has dropped 4% a year, with solar and lithium ion batteries declining a jaw dropping 12%. As a result, adoption of renewables is increasing globally and peak demand for oil is projected to hit within the next 5 years. Given these developments, a Republican shift towards courting the renewable industry could be a strategic necessity in future election cycles.
Recent polls show growing discontent with Trump’s economic tariffs, with over 53% of Americans viewing the economy as weak. Given the party’s slim majority in the House, failure to deliver on America’s main voting priority, the economy, could be the difference between enacting the Republican’s broader legislative agenda. Thankfully, for Republicans, implementing a well-designed carbon taxation system could solve lingering doubts regarding Republican economic initiatives.
Renewable development is unequivocally good for financial stability. In fact, the economic benefits of renewables are so abundant that Republican states have resisted Trump efforts to reverse Biden’s Inflation Reduction Act, which appropriated billions of dollars for renewable projects in red states. Due to the expansive application of renewables, green industries create more than double the number of jobs as the fossil fuel industry. Studies indicate green jobs pay roughly 19% higher than the national average, giving countries with a more robust renewable industry a faster rate of economic recovery. Empirically, carbon taxation schemes covering 15 countries have shown a positive correlation between implementation and long-term growth rates.
Additionally, a Border Adjusted Carbon Tax would fit within the broader Republican narrative of holding trading partners accountable for unfair practices. From the Renewable Fuel Standard to the Clean Air Act, the United States has some of the most comprehensive environmental laws on the planet. Compared to China, the US is on average three times less pollutive during the manufacturing process. The CCP uses lax regulations to decrease the average cost of production, gaining an unfair leg up in global markets. A Border Carbon Tax would effectively tariff countries with weak environmental protections. After U.S. implementation, the cost of goods imported by pollutive countries increases, discouraging domestic consumption of international products and increasing the market share of American companies.
Lastly (and most importantly) is the introduction of a BACT with a carbon dividend. A tax of just $25 per ton could raise approximately $125 billion annually, which is substantially lower than the tax rate recommended by climate organizations. If the GOP agreed to allocate dividends towards low-income communities, carbon taxation could reduce poverty by 10%, deep child poverty by a stunning 27%, and shield the lower class from increased commodity prices. A carbon dividend would feed into broader Republican populist messaging, allowing the GOP to champion poverty reduction levels unachieved under Democratic administrations. Despite Republicans’ calls to cut progressive benefit programs, roughly 87% of Americans support the Social Security act. The remaining discontent towards programs like Social Security is primarily driven by concerns over the deficit. A carbon tax resolves this issue by forcing international businesses to front the bill without relying on debt expansion.
Carbon Taxation: The Existential Imperative of Implementation
2024 was the hottest year in modern history. While Trump continues to gaslight the American public into believing climate change is a “hoax”, GHG emissions are permanently changing the global ecosystem and ripping the fabric of nature. Every day of congressional inaction on climate change is a moral travesty that undermines America’s promise to protect its citizens. From wildfires burning L.A; to hurricanes devastating the East Coast, the worst effects of climate change have become a reality for far too many Americans. Sadly, the harmful effects of GHG emissions overwhelmingly burden developing countries, with billions of people already suffering from disease, heat waves, and floods.
In a society that prioritizes economic development over nature, only threatening the profitability of businesses can force a transition fast enough to avert the existential threats of global warming. It’s only a matter of time before voters wake up and begin to hold politicians accountable, the challenge lies in whether the Democrats can persuade the GOP to correct course before it’s too late.
Carbon taxation is the Republican party’s silver bullet, unlocking renewables economic benefits, tariffing trading partners with unfair advantages, alleviating poverty, all while stopping impending ecological collapse. While the Trump administration might signal the end of climate legislation, an inability to break bipartisan gridlock and preach the message of carbon taxation is a disservice to humanity.
The climate crisis will not be solved by goodwill, a blatant disregard for science, nor a theological commitment to markets, but by a balance sheet that makes survival profitable.
Featured Image Source: Onetreeplanted
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