Former Treasury Secretary: We Can Prevent A ‘Climate Crash’ With A Carbon Tax

by S. Tom Bond on June 23, 2014

Henry Paulson, former Treasury Secretary

The Coming Climate Crash: Lessons for Climate Change

By Joe Romm, Think Progress, Climate Reality, June 22, 2014

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

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