James A. Baker III: What If Al Gore Is Right?

Former Secretary of State James A. Baker III isn’t ready to say Al Gore is right about climate change, but he is ready to take out an insurance policy just in case.
Baker sees a carbon tax as a way to achieve the Republican goal of removing environmental regulation without risking the perils of climate change—whether or not those perils are real.
"The potentially tragic results of inaction are not worth the risk," he said at the Global Energy Transitions Summit recently at Rice University. "This plan that my conservative colleagues and I have proposed I think can serve as an insurance policy just in case the Al Gores of the world turn out to be right."
Baker, 88, served as White House chief of staff and secretary of the Treasury under Ronald Reagan, and as secretary of state and White House chief of staff under George H. W. Bush. He unveiled a climate-tax proposal earlier this year along with George P. Schultz, a former U.S. secretary of labor, treasury and state for three Republican presidents, and Hank Paulson, George W. Bush's treasury secretary.
Their plan rests on four "pillars":
A tax on carbon pollution that begins at $40 per ton and gradually increases.
A dividend system that returns all proceeds "to the American people." Baker estimates the plan would bring a family of four $2,000 in its first year, in quarterly payments administered by the Social Security Administration.
A border adjustment that would refund carbon taxes paid by companies that export products to countries that don't price carbon. The adjustment would also charge fees on imports from such countries. The adjustment is designed to eliminate competitive advantages other countries might enjoy by continuing to pollute. The fee revenues would also be distributed to Americans in their dividend payments.
Rolling back government energy regulations after the carbon-tax system is in place.
"Here’s a plan that I think is really hard for people on both sides of the aisle to criticize," Baker said at the Sept. 28 summit, which was hosted by the think tank he founded at Rice, the Baker Institute on Public Policy. The institute released video of Baker's comments in October.
"I ask Democrats what’s wrong with a clean, across-the-board carbon tax? And I ask Republicans what’s wrong with getting rid of regulation? And they don’t seem to have an answer."
Baker is still very much a Republican. He gently mocked the doomsday talk he heard from participants at a recent Yale University conference on Climate Change:
"At Yale all they want to talk about is the cataclysmic effects of continuing on this course and that climate change was going to be the end of the Western Civilization as we know it," he said, eliciting snickers from the crowd.
"You know, it may be, I don’t know. I don’t understand the climate debate, but you don’t have to get there. This proposal gives you a way that both sides ought to be able to accept where you never have to resolve the question of who’s right about man’s contribution to global warming. Why not go that route?
Baker called out President Trump for attempting to repeal environmental regulations with nothing to replace them, and he chided both Trump and Obama for policies that "have proven divisive in this area, perhaps even incendiary."
Baker and Schultz are not the first to propose a carbon dividend program (Obama's first-term proposal was for a cap-and-trade program that would have returned most revenue to taxpayers), but it's the first proposed by such prominent Republicans.
Baker srtressed that no one has to believe the climate science to appreciate his proposal. It replaces "onerous" and "cumbersome" regulations with a simple market mechanism, he argued, and it provides an insurance policy against risk.
"I am anything but a climate scientist. I don’t know anything about it. I don’t pretend to know anything about it. And I continue to have doubts about what exactly effect manmade emissions may be having on the climate," he said. "I do think one thing is unassailable, and that is that the future effects of climate change are marked by very grave uncertainty."
Gore did not immediately respond to a request for comment, but he gave his own speech at Rice last week, in which he warned: "We are leaving the boundaries of the climate environment that we have known since human civilization began."