Austin, Texas — Experts discussing a carbon tax as a bipartisan "middle ground" to address climate change encountered a couple of roadblocks -- a lack of international agreement on its trade impact and a lack of consensus on how revenues should be spent.

During an occasionally boisterous panel discussion on Monday, the first afternoon of the annual University of Texas Energy Week conference, Yoram Bauman, an economist who advocated for a carbon tax in Washington state that was defeated in 2016, took frequent verbal jabs at Robert Bryce, a senior fellow at the Manhattan Institute for Policy Research, who pointedly criticized the proposal as hitting the poorest people hardest and posing a significant problem in international trade.

After showing graphs that display how temperatures have been rising for decades as the carbon dioxide concentration in the earth's atmosphere has grown, along with a general consensus among scientists that the carbon dioxide emissions are largely due to human activity, Bauman criticized Bryce for having said in the National Review, "Temperatures may be rising; they may not be rising," and in The Wall Street Journal, "The science is not settled, not by a long shot."

Bryce's Manhattan Institute has received funding from ExxonMobil and The Koch Family Foundations, which is tied to Koch Industries, which is involved in fossil fuel production and refining, according to Media Matters for America, a "progressive research and information center."

Other panelists included Pam Giblin, senior policy advisor at the Climate Leadership Council, which advocates for a bipartisan carbon tax proposal now pending in Congress, and Nick Schulz, ExxonMobil director of stakeholder engagement, who also spoke in favor of the carbon tax proposal.

GOOD POLICY VS. BAD POLICY

"The business community needs to realize that the alternative to good climate policy is not no climate policy but bad climate policy," said Bauman, who has a doctorate in economics but makes a living as a stand-up comedian.

"What I think is key is that ... we need folks like Nick to stop funding folks like Robert and start funding folks like Pam," Bauman said.

Schulz pointed out that ExxonMobil is a founding member of the Climate Leadership Council, and Rex Tillerson, former ExxonMobil chairman and CEO and former US secretary of state, has also decided that a carbon tax is the best policy option for addressing climate change, because "you tax something that you want less of."

The proposal pending in Congress has sound scientific, legal, political and economic support, Giblin said, in that it would set an initial price of carbon dioxide at $40/ton, the revenues would be distributed equally among US citizens, "probably by the Social Security Administration," and a "border adjustment tax" would be imposed on the carbon content of imports as a way to mitigate the likelihood of the carbon tax resulting in more carbon-intensive industries being moved offshore.

"We really believe this is as practical as it gets," Giblin said. "We are gaining traction."

But Bryce said contractors in central Texas, for example, who must travel long distances to work, would be paying more in carbon taxes than workers in New York City, who can walk to work.

GLOBAL INACTION

In reviewing activity around the world, Bryce said, "what I see is a lot of talk about climate change, but very little action."

Coal continues to supply about 40% of the world's electricity, which has been a relatively stable number despite efforts in Europe and the US to reduce fossil fuel use. Since moving away from nuclear power following the Fukushima disaster, Japan has been opening coal-fired power plants, Bryce said.

Giblin said that Bryce seems "to be saying that unless we have something perfect, we shouldn't do anything."

"We need to get started now and improve it as we go along," Giblin said. "If we have the collective will that we do something about climate change, it's not going to be painless. Our challenge is to make it as equitable as we can."

When an audience member noted that people who receive carbon tax dividends might just spend more on carbon-intensive products such as gasoline, which would tend to increase emissions, Giblin said the carbon tax would rise to counteract that trend.

"We are going to have to have very good emissions inventories," Giblin said.

Schulz said he likes the carbon tax proposal because it is "technology neutral," whereas existing efforts to mitigate climate change have focused on supporting various types of non-emitting technologies, such as renewable energy and electric vehicles, which have tended to result in subsidies by poorer drivers for wealthier drivers to buy expensive Teslas.

Bryce pointed out that many local jurisdictions are imposing more limitations on wind farm development and renewable energy tends to require large amounts of land, especially in comparison with centralized electricity generation.

Giblin said a carbon tax "will drive innovation."

"Companies are going to have big economic incentives to reduce emissions," she said. "It's not going to be compelled, but it's going to be incentivized."

-- Mark Watson, markham.watson@spglobal.com

-- Edited by Valarie Jackson, newsdesk@spglobal.com