Newsom’s Car Policy is a Step Forward, But Let’s Tax Corps Too

Putting a tax on carbon could drastically reduce CO2 emissions

California Governor Gavin Newsom announced Wednesday that the sale of new gasoline cars will be banned in California by 2035. The policy, aimed at reducing emissions-based pollution in California, is the most assertive of its kind in the United States. The plan touts aggressive and necessary legislation, and it’s no surprise that it has already received pushback from energy research and fossil fuel industries. While Americans have taken individual steps to reduce their carbon footprints — like the mad rush to eradicate plastic straws from fast food chains and restaurants — it is ultimately the responsibility of larger corporations to reduce carbon emissions.

Stonewallers on both the right and the left create barriers for tackling climate change. Americans who are willing to find common ground and leave our polarized corners for the center (there are about 70% of us) have the power to find solutions. The most simple and effective of which is putting a price on carbon.

Like Newsom suggests, the car pollution of some 15 million vehicles in California isn’t much help in terms of mitigating wildfires, keeping our glaciers frozen, and our sea levels where we like them. To slow down these catastrophes, there are three possible avenues to impose a tax on carbon: command and control, cap-and-trade, and carbon tax shift.

The first option would allow the EPA to impose broad regulations on greenhouse gas emissions. Command and control is both the most expensive and least effective path. Its popularity is held in favor of those politicians who favor the absence of culpability for any unforeseen consequences.

In a cap-and-trade system, Washington would put a cap on emissions that became stricter over time, then allow companies to trade credits. This method creates incentives for corporations to cut their emissions in the most cost-effective way. While good in theory; however, real-world implementation shows the system is easy to game and vulnerable to risky trade of complex financial tools. Consequently, emissions are still rising under the E.U.’s trading system, which continues to falter. And, not surprisingly, support for the policy is dwindling among U.S. lawmakers.

Which brings us to our third option, what the right calls a “tax swap” and the left calls a “tax shift.” Congress could cut taxes on things we want more of (employment and income, for example) and then make up the difference by levying a fee on carbon emissions. This plan is revenue neutral, so consumers will enjoy as much money as they did before. Plus, it has the added feature of making clear that carbon — and the energy sources that emit it — will become scarcer over time. That delivers a strong incentive to invest. Given the simplicity, transparency, solid economic benefits, and investment incentives associated with a carbon tax, it’s easy to see why it should transcend run-of-the-mill climate rhetoric.

Ultimately, voters will decide what’s realistic. It’s possible for us to find solutions to wedge issues like climate change, abortion, immigration and gun control. In fact, five percent of us are already exercising our power to pull the rhetorical center of American politics from the extremes on the right and the left to the broad 70% so politicians and media are not pandering to extreme ideas. That’s all it takes.

Special interests can manage our problems forever but they can’t solve them. Only we can. 5 million of us is all it takes. Join In This Together and sign our Declaration of Interdependence. Make America united again.

Bill Shireman is a social entrepreneur and environmental policy innovator. He is the co-author of In This Together.