Earlier this month, the Harvard Office for Sustainability released a statement declaring the University’s intent to be fossil fuel-neutral by 2026 and fossil fuel-free by 2050. In doing so, the University is aligning with many other universities and private corporations that are seeking similar conservation results. However, these goals, while self-critical and laudable, focus only on their own immediate campuses and environments. Advocacy for national action is the next step.
This may seem surprising coming from the president of the Harvard College Republicans. After all, conservative support for the Harvard Corporation’s use of its lobbying clout may be unexpected, but what shouldn’t be surprising is a conservative angle on advocacy for responsible climate policy formulation. While the national Republican Party has long lacked consensus on environmental policy, it’s crucial that this changes. Without a proposed conservative solution, Republicans cede influence entirely on a subject that should not be a partisan issue.
Harvard is uniquely connected to these national efforts. In fact, five of the eight authors of one of the best currently proposed solutions supported by conservatives have past or current Harvard affiliations. The Conservative Case For Carbon Dividends, published by the Climate Leadership Council, was written, researched, and formulated by Economics professors Martin M. Feldstein ’61 and N. Gregory Mankiw; Henry M. Paulson Jr., who graduated from the Business School; Ted Halstead, who graduated from the Kennedy School; and Thomas F. Stephenson ’64. The plan is known as the Baker-Schultz Plan, and it is the plan endorsed by the newly formed Students for Carbon Dividends Coalition, officially launched Wednesday.
Students for Carbon Dividends is co-founded by 22 college Republican groups, six college Democrat groups, and four energy and environmental groups from across the U.S. We are united in their belief that America needs a climate solution that both strengthens our economy and protects our shared environment. The Harvard Republican Club, Harvard College Democrats, and Harvard College Conservation Society are all founding signatories of the coalition. Only Harvard, Yale, and the University of Michigan have their respective Republican, Democrat, and Environmental clubs signed on jointly, demonstrating a powerful opportunity for unity and influence from these universities.
The Baker-Schultz Plan has four pillars. The first pillar is the creation of a gradually rising and revenue-neutral carbon tax. The second pillar is returning the proceeds of that tax to all Americans as carbon dividend payments. These two pillars in tandem create a positive feedback mechanism: As taxes go up, so do dividends, and carbon emissions are likely to fall as they become more expensive. The third pillar appeals to Republicans specifically: rollback of carbon regulations, including a full repeal of the Clean Power Plan, that are no longer necessary after the enactment of the gradually increasing carbon tax. These three pillars form the bulk of the national policy that can be centrally implemented.
The fourth pillar demonstrates how a centralized policy, implemented nationally, can produce international policy changes. The plan’s creators refer to this as the “climate domino effect,” and it is induced through border carbon adjustments. These adjustments are used to solve the issue of a decreased ability for domestic producers to compete internationally after the implementation of the tax. It is decentralized in how its enactment plays out. Nations using a carbon dividend system levy a Border Carbon Adjustment against nations that have not implemented such a system, so it creates a tariff paid by exporters in companies without carbon taxes. The revenue from these tariffs then returns to the country with carbon dividends. This, therefore, encourages nations lacking a carbon dividend to implement their own revenue-neutral carbon dividend structures or else foot the bill for the dividends of other countries.
At first glance, one might worry that this passes the burden of higher prices onto the American people as suppliers raise prices to pay for the tax. However, examining the nature of the dividend system reveals that over 70 percent of Americans will receive more revenue in dividends than they would pay in taxes. This results in a net offset of price increases for most consumers while still encouraging carbon producers to seek alternative energy sources. By using the power of the free market to tackle the emissions problem head on and enacting a Pigouvian tax on imports, the Baker-Schultz Plan would both shrink the size of government and maintain American competitiveness internationally, all while nearly doubling the emissions reductions induced by all Obama-era regulations combined.
Aside from being the institutional origin of most of the primary researchers and contributing authors of the Baker-Schultz Plan, the Harvard community should care about this initiative and support it because it is one of the few issues generating bipartisan unity on campus today.
Kiera E. O’Brien '20, a Government concentrator in Leverett House, is the president of the Harvard Republican Club.
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Coop. Dividend to be Paid TodayThe annual dividend of the Harvard Co-operative Society, amounting to 9 percent., will be paid at the Co-operative Office in
Dividend May be Drawn TomorrowThe payment of dividends to members of the Co-operative Society will begin tomorrow. A dividend of eight per cent. will
Harvard Republican Club Joins Advocacy Group, Endorses Carbon TaxThe new group, known as Students for Carbon Dividends, endorses the so-called Baker-Shultz plan, named after two of its signatories, former Secretaries of State James A. Baker III and George P. Shultz.
Harvard Should Establish an Internal Carbon Tax