In 2020, Senator Mitt Romney warned that the U.S. was facing three major issues the country is “just not dealing with”: unsustainable debt, an increasingly aggressive China, and climate change.
At his announcement to not seek reelection last fall, the Senator spotlit these very same three “critical challenges,” calling for new and younger leadership to step up and take the mantle of responsibility.
This call is serious for young professionals like myself. At the beginning of this year, the U.S. debt soared past $34 trillion, and is projected to reach a staggering $50 trillion by 2030. China’s ambition to be an economic and military superpower only continues to grow. And despite recent U.S. efforts, global carbon emissions are projected to still rise by 9% this decade.
These mounting issues have serious implications for future generations, and they demand bold leadership and creative solutions.
While there is no silver bullet for each of these issues, there is a solution that makes considerable headway on all three at the same time: a border-adjusted price on carbon pollution. A single solution that can tackle multiple issues simultaneously is a rarity, and an idea and opportunity our legislators should not overlook.
While chiefly considered an environmental policy, carefully crafted carbon pricing legislation could be used as an important debt-reduction tool. Levying an upstream fee on carbon would generate substantial revenue – over $1 trillion within 10 years – that could be used to reduce our debt and deficit. The plan would call for “dividend” rebates or tax swaps to ensure American taxpayers are not burdened and come out ahead financially, while still generating significant revenue for deficit reduction.
Most economists and public policy experts acknowledge that dealing with the nation’s long-term fiscal challenges will require both significant spending cuts and adjustments to taxation. In order to preempt increases in taxes that would be harmful to businesses and workers – like income or corporate taxes – Republicans would be strategic by supporting a price on carbon, which wouldn’t hamper economic growth, and allow the government to reduce other taxes that do.
Second, a carbon price with a border adjustment mechanism (CBAM) could help give the U.S. a leg up on its chief economic rival, China. This approach would extend U.S. standards to imports from countries with far looser environmental regulations than the U.S., leveling the playing field for American industries and holding foreign polluters accountable. U.S. industry is 300% cleaner than China when it comes to carbon pollution – it is time to level the playing field.
Already, the E.U., which also has high standards like the U.S., has begun implementing this solution, and the U.S. will be impacted by the E.U. CBAM unless it implements its own similar policy. Doing so would allow us to join our western allies and upend the status quo that has benefitted the likes of China and Russia which have disregarded modern labor and environmental standards for far too long.
Third, carbon pricing is widely considered the most cost-efficient tool to hedge against rising climate risk. Unlike the unrealistic and burdensome proposal of regulations and subsidies that is the Left’s current ‘Green-New-Deal’ approach, this market-based approach would be a powerful tool to accelerate climate action in a highly efficient, fiscally responsible way.
If we don’t get ahead of this challenge, wildfires, extreme heat, and record natural disasters will continue to put pressure on state, local, and federal budgets, to the tune of hundreds of billions of dollars in the coming decades. Carbon pricing mobilizes markets to respond appropriately to these risks, allowing us to get ahead of the problem now.
I’m hopeful border-adjusted carbon pricing will be considered, even in our hyper-partisan time. The need to get ahead of our debt, China, and climate change will only continue to grow. What’s more, there’s an increasing number of legislators who are suiting up to seek out serious solutions to these problems, like, for instance, in the new Utah-led effort to jumpstart a serious bicameral congressional commission about the debt.
Taking on hard problems requires smart solutions, and clear-eyed leadership. A policy that takes on these three challenges all at once is an opportunity that Utah’s leaders should capitalize on.
Mackey Smith is the vice-chair of the Salt Lake County Republican Party and former State Chair of the Utah Young Republicans
