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Obama aide: Little chance of carbon tax in near term

Obama aide: Little chance of carbon tax in near term

There’s very little chance that Congress could pass an economy-wide tax on carbon dioxide emissions in the near term, President Obama’s top energy adviser said.

White House senior aide Brian Deese said at a Columbia University event Tuesday that a clean economy-wide price on carbon would be the easiest way to reduce emissions, like the cap-and-trade proposal Obama pushed early in his presidency or a tax on carbon emissions.

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But the chances of that getting through Congress are politically small, Deese said, which makes further executive action even more important.

“I don’t think that that type of approach is on the near-term horizon,” Deese said. “We do still have a disconnect, where the congressional politics of this issue have not caught up with either the substance of the issue, the urgency of the issue or what’s actually happening in terms of the speed at which you’re seeing transformations in the economy.”

Deese said it’s easier to make the political case for climate action when the administration can show that greenhouse gas emissions have recently started to fall while the economy continues to grow.

But it’s still a hard case to make with Congress.

“My assessment is just, in the near term, I think that the politics are very challenging,” he said.

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The House easily passed earlier this year a Republican nonbinding measure denouncing a carbon tax. Supporters said its main purpose was to close the door on such a tax for the future, particularly as a trade-off for other policies.

Trump has denounced a tax, although Clinton aides have said she would listen if Congress wanted to enact one.

But Deese avoided election politics, instead focusing on what he and the administration want to see in the future of climate policy.

After the cap-and-trade bill failed in 2010, Obama decided to proceed aggressively with regulations to cut carbon dioxide emissions using executive authority under the Clean Air Act, without the need for congressional approval.

The main result was last year’s Clean Power Plan, which orders a 32 percent cut in the power sector’s emissions by 2030. It is currently on hold while federal courts decide if it is legal.

Deese predicted that any future actions on climate change would have to come through executive means. He referred to a carbon-pricing law as the “first-best” way to control emissions, and executive action as the “second-best.”

“We live in a political environment now where the prospects of a de novo national carbon pricing mechanism passing Congress are remote for the foreseeable future,” he said. “And so we have to push ourselves to ask the question about how to optimize these market-based approaches across sectors and make a second-best approach increasingly the best-case solution for policymakers who are forced to make decisions.”

Optimizing those policies to get the best emissions reductions, and aligning them across sectors like transportation and electricity, should be a focus in the future, Deese said.

“It is not the first-best,” he said of optimizing policies. “But it merits further scrutiny, it merits further study, it merits further innovation … because it is likely to be the dominant paradigm for the foreseeable future.”