Former Republican cabinet member George P Schultz, along with economist Gary Becker, have a reasonable stance in an op-ed piece which appeared yesterday in the Wall Street Journal. It’s available outside the paywall. They call for a revenue-neutral carbon tax, and refer approvingly to the British Columbia experiment.
… In any case, checks to recipients should be identified as “Your carbon dividend.”
The right level of the tax for the United States deserves careful study, but the principle of a lower starting rate with scheduled increases to an identified level has proven to be a good one in the five-year experience of a similar carbon tax in British Columbia. This gives time for producers and consumers to get accustomed to a carbon tax, and to discover how they can respond efficiently.
The tax should also further increase over time if the apparent severity of the climate effects is growing and, alternatively, the tax should fall over time if the severity appears to be decreasing. Finally, to equalize the present and future burdens, the carbon tax rate should rise over time approximately at the real interest rate (say, the real return on 10-year Treasurys), so that the present value of the burden would be the same to future consumers and producers as it is to present ones.