This group brings together the best thinkers on energy and climate. Join us for smart, insightful posts and conversations about where the energy industry is and where it is going.


Former Bush Treasury Secretary: We Can Prevent A 'Climate Crash' With A Carbon Tax

Former Bush Treasury Secretary Henry Paulson.

Former Bush Treasury Secretary Henry Paulson. CREDIT: AP Photo/Pablo Martinez Monsivais

There is an amazing op-ed in Sunday’s New York Times, “The Coming Climate Crash: Lessons for Climate Change in the 2008 Recession.”

What’s amazing isn’t so much the content — the climate crisis is real, we’re close to crossing catastrophic and irreversible tipping points, we have the technology to start slashing carbon pollution now, and we need a carbon price to jumpstart the process. You’ve heard it many times from the nation’s and world’s top scientists, from Al Gore and Bill McKibben, and here on Climate Progress. But this piece is by Henry M. Paulson Jr., Treasury Secretary from July 2006 to January 2009 under President George W. Bush and Vice President Dick Cheney.

Whereas Tea-Party-driven Republicans on the Hill are stuck in denial, the ever-worsening reality of human caused climate change is leading even the most mainstream Republicans like Paulson to sing a much different tune.

We are building up excesses (debt in 2008, greenhouse gas emissions that are trapping heat now). Our government policies are flawed (incentivizing us to borrow too much to finance homes then, and encouraging the overuse of carbon-based fuels now). Our experts (financial experts then, climate scientists now) try to understand what they see and to model possible futures. And the outsize risks have the potential to be tremendously damaging (to a globalized economy then, and the global climate now).

What are these outsize risks? Paulson explains that scientists have identified a number of “potential thresholds that, once crossed, could cause sweeping, irreversible changes.” He points out “already, observations are catching up with years of scientific models, and the trends are not in our favor.” And, Paulson notes, these changes are quickly accelerating in recent years. “Fewer than 10 years ago, the best analysis projected that melting Arctic sea ice would mean nearly ice-free summers by the end of the 21st century,” he writes. “Now the ice is melting so rapidly that virtually ice-free Arctic summers could be here in the next decade or two.”

Why is that bad? Because that leads to an amplifying feedback that speeds up atmospheric and ocean warming, “ultimately raising sea levels.” And we have a bigger problem at the other pole: “Even worse, in May, two separate studies discovered that one of the biggest thresholds has already been reached,” Paulson writes. “The West Antarctic ice sheet has begun to melt, a process that scientists estimate may take centuries but that could eventually raise sea levels by as much as 14 feet.”

Finally, Paulson warns, there’s every reason to expect that many other concerns of climate scientists will become painful reality in the years ahead: “And 10 years from now, will other thresholds be crossed that scientists are only now contemplating?”

But this is no economic doom and gloom message from the former Treasury Secretary. Rather, Paulson presents a choice between economic doom and economic boom. “We already have a head start on the technologies we need. The costs of the policies necessary to make the transition to an economy powered by clean energy are real, but modest relative to the risks,” he writes.

Although Paulson doesn’t mention it, the world’s leading scientists and governments agreed that the annual growth loss to preserve a livable climate is a mere 0.06 percent — relative to baseline growth of between 1.6 percent and 3 percent per year.

So, then what is the solution? Paulson is clear that “a tax on carbon emissions will unleash a wave of innovation to develop technologies, lower the costs of clean energy and create jobs as we and other nations develop new energy products and infrastructure.” In turn, he writes, “this would strengthen national security by reducing the world’s dependence on governments like Russia and Iran.”

The choice is apparent to all but the most extreme head-in-the-sand idealogues: We can learn from science and from the mistakes of the past, take on the “climate bubble” now, and unleash the power of innovation to spur the next industrial revolution. Or we can continue ignoring science and face a devastating “carbon crash” that will ravage the world far more than the recent economic crash — and irreversibly so.

The post Former Bush Treasury Secretary: We Can Prevent A ‘Climate Crash’ With A Carbon Tax appeared first on ThinkProgress.


Hops Gegangen's picture
Hops Gegangen on Jun 25, 2014


Unfortunately, it’s not just “the most exteme head-in-sand ideologes” — it’s most of the Fox News audience, which has it pounded into their heads that climate change is a hoax.

If Paulson wants to make a difference, the best thing he could do would be to call the CEO of Fox News, and say “look buddy, this is real, suck it up and admit it.”


Hops Gegangen's picture
Hops Gegangen on Jun 25, 2014


Where did Paulson say we should pay “him” a tax? He isn’t even in office.

Maybe he’s just a guy with a brain who sees what is going on and cares enough to speak up.


Hops Gegangen's picture
Hops Gegangen on Jun 25, 2014


We are being scammed again. That’s the point. The government is failing to regulate carbon emissions just like it failed to regulate the financial markets, and once again it is because politicians cater to business interests – then the banks, now the fossil fuel suppliers. And we tax payers will pay the bill, while the fossil fuel companies take home the profits, just like the banks did then.



Matt Robinson's picture
Matt Robinson on Jun 26, 2014

Regardless of whom the messenger is, enthusiasm for a Carbon Tax should be severely tempered by a sober and details analysis of what will be done with the money.

Carbon Taxes in and of themselves will not solve anything. If the tax has no mechanism to feed back information to the tax payer on how the money is being invested and what the cost/benefit is, run away from it as fast as you can.

Because you can bet the farm that some faceless individual or organisation is getting rich on the excuse that it’s “for the environment”.

I put my thoughts together on the Australian Carbon Tax here:

Roger Arnold's picture
Roger Arnold on Jun 27, 2014

Nothing need be done with the money, and arguably nothing should be done, beyond returning it to the economy in the form of universal rebates or reductions in other taxes.

The real point of a carbon tax is to raise to cost of fossil fuels to what they would be if the external costs currently socialized to the world at large were internalized.  That lays a foundation for the market to make rational choices about energy forms and uses, free of arbitrary and inefficient mandates.  Fossil fuels are rendered less attractive, zero-carbon alternatives more attractive.

The problem with a carbon tax is getting it passed.  There’s no focused constituency for it, and multiple focused constituencies against it.  Fossil fuel interests are understandably against it, because it would accelerate the transition away from fossil fuels — precisely as it is intended to do.  An accelerated transition would leave trillions of dollars in reserves “stranded”, to be left forever in the ground.  

At the other end of the spectrum, the renewable energy establishment is against it, because it would eliminate the subsidies and special incentives that renewables currently enjoy.  Or at least it would, as the proposed legislation is usually formulated.  I’m sure the RE establishment would be quite happy to see a carbon tax enacted, as long as it didn’t imperal current subsidies.  A case of being able to have one’s cake and eat it too.

Joseph Romm's picture

Thank Joseph for the Post!

Energy Central contributors share their experience and insights for the benefit of other Members (like you). Please show them your appreciation by leaving a comment, 'liking' this post, or following this Member.

Get Published - Build a Following

The Energy Central Power Industry Network is based on one core idea - power industry professionals helping each other and advancing the industry by sharing and learning from each other.

If you have an experience or insight to share or have learned something from a conference or seminar, your peers and colleagues on Energy Central want to hear about it. It's also easy to share a link to an article you've liked or an industry resource that you think would be helpful.

                 Learn more about posting on Energy Central »