



NASA GISS Surface Temperature Analysis for June 2012 compared with a 1951-1980 baseline.

Former Secretary of State George Shultz is calling for a carbon tax to reduce U.S. greenhouse gas emissions and oil consumption, according to an interview released today by Stanford University.

Shultz, who served as secretary of state under President Ronald Reagan as well as a number of other roles under previous Republican administrations, is heading up the Hoover Institution’s Task Force on Energy Policy will calls for boosting energy efficiency, reducing dependence on oil exports to improve national security, and putting a price on carbon. While the last of those objectives has been an anathema to many Republicans of late, Shultz said his party could eventually support a carbon tax.

“We have to have a system where all forms of energy bear their full costs,” Shultz said. “For some, their costs are the costs of producing the energy, but many other forms of energy produce side effects, like pollution, that are a cost of society. The producers don’t bear that cost, society does. There has to be a way to level the playing field and cause those forms of energy to bear their true costs. That means putting a price on carbon.”

“We’ve studied a variety of ways to do that, and to me the most appealing way is a revenue-neutral carbon tax. That is, you distribute all the revenue from the carbon tax in some fashion back to taxpayers, so there is no fiscal drag on the economy. British Columbia has a revenue-neutral carbon tax. They started low and increased the tax over five years to a much higher level, so people could adjust. The revenue is distributed mostly to individuals, so it’s popular.”

The former secretary of state said that although Republicans are frequently criticized by environmentalists for a near unanimous opposition to taking action on climate change, the party hasn’t always been an enemy of the environment.

“Historically, Republicans have often protected the environment. President Nixon created the Environmental Protection Agency. We dealt with the ozone layer under President Reagan and with acid rain under the first President Bush, both with bipartisan support.”





U.S. Monthly Crude Oil Production and Imports 1981-2012.

Shultz listed three reasons why Republicans should be interested in taking action: national security, the economy, and the environment.

“We know that we don’t want to be vulnerable to sources of supply that are uncertain or to send billions of dollars to regimes that are not our friends,” he said. “Then there’s the economy. Every spike in the price of oil has put our economy in a recession. We want to have more diverse energy resources so our economy won’t be so vulnerable to the oil market.”

“Then there’s the environment, which has many aspects. One of these is the air you breath,” he continued. “Another is that the globe is warming, which is not a matter of opinion, but a matter of fact. The arctic is melting. If you could bring together the constituencies concerned with national security, the economy and the environment – both local and global – that would be a potent coalition.”

Shultz said he and Tom Steyer, a Democrat who’s working with him on the Hoover Institution’s Task Force on Energy Policy, are “studying” the regulatory process to see where there might be opportunities to more effectively regulate energy policy.

“You never know when an opportunity is going to come. Sometimes it comes when you’re not ready, and it goes away and you haven’t accomplished anything. The thing to do is to be ready. We’re studying this topic carefully: how to put it into effect, how to make it revenue neutral, what we can learn from the case study. So, we will be ready,” he said.

“Just when the opportunity comes you don’t know, but it will come. A lot of people seem to be scoffing at the idea of global warming, but reality will catch up with them.”

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