TED2017
Ted Halstead: A climate solution where all sides can win
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Why are we so deadlocked on climate, and what would it take to overcome the seemingly insurmountable barriers to progress? Policy entrepreneur Ted Halstead proposes a transformative solution based on the conservative principles of free markets and limited government. Learn more about how this carbon dividends plan could trigger an international domino effect towards a more popular, cost-effective and equitable climate solution.
Ted Halstead - Policy entrepreneur, climate expert, author
Ted Halstead is breathing new life into US and global climate policy by mobilizing conservative leaders and CEOs around a breakthrough carbon dividends solution. Full bio
Ted Halstead is breathing new life into US and global climate policy by mobilizing conservative leaders and CEOs around a breakthrough carbon dividends solution. Full bio
Double-click the English transcript below to play the video.
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I have a two-year-old daughter named Naya
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who is under the mistaken impression
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that this conference
is named in honor of her father.
is named in honor of her father.
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(Laughter)
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Who am I to contradict my baby girl?
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As many of you know, there's something
about becoming a parent
about becoming a parent
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that concentrates the mind
on long-term problems like climate change.
on long-term problems like climate change.
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It was the birth of my daughter
that inspired me
that inspired me
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to launch this climate organization,
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in order to counteract the excessive
polarization of this issue
polarization of this issue
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in the United States,
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and to find a conservative
pathway forward.
pathway forward.
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Yes, folks, a Republican
climate solution is possible,
climate solution is possible,
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and you know what?
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It may even be better.
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(Laughter)
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Let me try to prove that to you.
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What we really need
is a killer app to climate policy.
is a killer app to climate policy.
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In the technology world, a killer app
is an application so transformative
is an application so transformative
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that it creates its own market,
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like Uber.
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In the climate world,
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a killer app is a new
solution so promising
solution so promising
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that it can break through
the seemingly insurmountable
the seemingly insurmountable
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barriers to progress.
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These include the psychological barrier.
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Climate advocates have long
been encouraging their fellow citizens
been encouraging their fellow citizens
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to make short-term sacrifices now
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for benefits that accrue to other people
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in other countries 30 or 40
years in the future.
years in the future.
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It just doesn't fly because it runs
contrary to basic human nature.
contrary to basic human nature.
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Next is the geopolitical barrier.
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Under the current rules of global trade,
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countries have a strong incentive
to free ride off the emissions reductions
to free ride off the emissions reductions
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of other nations,
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instead of strengthening
their own programs.
their own programs.
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This has been the curse
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of every international
climate negotiations, including Paris.
climate negotiations, including Paris.
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Finally, we have the partisan barrier.
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Even the most committed countries --
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Germany, the United Kingdom, Canada --
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are nowhere near reducing emissions
at the required scale and speed.
at the required scale and speed.
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Not even close.
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And the partisan climate divide
is far more acute
is far more acute
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here in the United States.
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We are fundamentally stuck,
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and that is why we need
a killer app of climate policy
a killer app of climate policy
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to break through each of these barriers.
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I'm convinced that the road
to climate progress in the United States
to climate progress in the United States
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runs through the Republican Party
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and the business community.
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So in launching
the Climate Leadership Council,
the Climate Leadership Council,
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I started by reaching out to a who's who
of Republican elder statesmen
of Republican elder statesmen
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and business leaders,
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including James Baker and George Schultz,
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the two most respected Republican
elder statesmen in America;
elder statesmen in America;
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Martin Feldstein and Greg Mankiw,
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the two most respected
conservative economists in the country;
conservative economists in the country;
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and Henry Paulson and Rob Walton,
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two of the most successful
and admired business leaders.
and admired business leaders.
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Together, we co-authored
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"The Conservative Case
For Carbon Dividends."
For Carbon Dividends."
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This represents the first time
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that Republican leaders put forth
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a concrete market-based climate solution.
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(Applause)
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Thank you.
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(Applause)
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We presented our plan at the White House
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two weeks after President Trump moved in.
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Almost every leading
editorial board in the country
editorial board in the country
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has since endorsed our plan,
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and Fortune 100 companies
from a wide range of industries
from a wide range of industries
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are now getting behind it.
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So by now you're probably wondering,
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what exactly is this plan?
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Well, our carbon dividends solution
is based on four pillars.
is based on four pillars.
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The first is a gradually
rising carbon tax.
rising carbon tax.
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Although capitalism is a wonderful system,
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like many operating systems,
it's prone to bugs,
it's prone to bugs,
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which, in this case, are called
"market failures."
"market failures."
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By far the largest is that
market prices fail to take
market prices fail to take
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social and environmental
costs into account.
costs into account.
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That means every market transaction
is based on incorrect information.
is based on incorrect information.
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This fundamental bug of capitalism,
more than any other single factor,
more than any other single factor,
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is to blame for our climate predicament.
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Now in theory, this should be
an easy problem to fix.
an easy problem to fix.
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Economists agree
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that the best solution is to put a price
on the carbon content of fossil fuels,
on the carbon content of fossil fuels,
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otherwise known as a carbon tax.
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This would discourage carbon emissions
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in every single economic transaction,
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every day of the year.
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However, a carbon tax by itself
has proven to be unpopular
has proven to be unpopular
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and a political dead end.
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The answer is to return
all the money raised
all the money raised
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directly to citizens,
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in the form of equal monthly dividends.
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This would transform
an unpopular carbon tax
an unpopular carbon tax
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into a popular and populist solution,
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and it would also solve
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the underlying psychological barrier
that we discussed,
that we discussed,
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by giving everyone a concrete benefit
in the here and now.
in the here and now.
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And these benefits would be significant.
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Assuming a carbon tax rate
that starts at 40 dollars per ton,
that starts at 40 dollars per ton,
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a family of four would receive
2,000 dollars per year
2,000 dollars per year
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from the get-go.
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According to the US Treasury Department,
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the bottom 70 percent of Americans
would receive more in dividends
would receive more in dividends
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than they would pay
in increased energy prices.
in increased energy prices.
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That means 223 million Americans
would win economically
would win economically
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from solving climate change.
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And that --
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(Applause)
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is revolutionary,
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and could fundamentally
alter climate politics.
alter climate politics.
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But there's another
revolutionary element here.
revolutionary element here.
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The amount of the dividend would grow
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as the carbon tax rate increases.
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The more we protect our climate,
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the more our citizens benefit.
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This creates a positive feedback loop,
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which is crucial,
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because the only way we will reach
our long-term emission-reduction goals
our long-term emission-reduction goals
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is if the carbon tax rate
goes up every year.
goes up every year.
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The third pillar of our program
is eliminating regulations
is eliminating regulations
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that are no longer needed
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once a carbon dividends plan is enacted.
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This is a key selling point
to Republicans and business leaders.
to Republicans and business leaders.
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So why should we trade
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climate regulations for a price on carbon?
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Well, let me show you.
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Our plan would achieve nearly twice
the emissions reductions
the emissions reductions
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of all Obama-era climate
regulations combined,
regulations combined,
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and nearly three times the new baseline
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after President Trump repeals
all of those regulations.
all of those regulations.
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That assumes a carbon tax
starting at 40 dollars per ton,
starting at 40 dollars per ton,
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which translates into roughly
an extra 36 cents per gallon of gas.
an extra 36 cents per gallon of gas.
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Our plan by itself
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would meet the high end
of America's commitment
of America's commitment
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under the Paris Climate Agreement,
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and as you can see,
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the emissions reductions
would continue over time.
would continue over time.
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This illustrates the power
of a conservative climate solution
of a conservative climate solution
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based on free markets
and limited government.
and limited government.
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We would end up with less regulation
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and far less pollution at the same time,
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while helping working-class
Americans get ahead.
Americans get ahead.
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Doesn't that sound like something
we could all support?
we could all support?
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(Applause)
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The fourth and final pillar of our program
is a new climate domino effect,
is a new climate domino effect,
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based on border carbon adjustments.
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Now that may sound complicated,
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but it, too, is revolutionary,
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because it provides us
a whole new strategy
a whole new strategy
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to reach a global price on carbon,
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which is ultimately what we need.
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Let me show you an example.
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Suppose Country A adopts
a carbon dividends plan,
a carbon dividends plan,
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and Country B does not.
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Well, to level the playing field
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and protect the competitiveness
of its industries,
of its industries,
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Country A would tax imports from Country B
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based on their carbon content.
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Fair enough.
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But here's where it gets
really interesting,
really interesting,
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because the money raised at the border
would increase the dividends
would increase the dividends
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going to the citizens of Country A.
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Well, how long do you think it would take
the public in Country B to realize
the public in Country B to realize
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that that money should be going to them,
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and to push for a carbon
dividends plan in their own land?
dividends plan in their own land?
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Add a few more countries,
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and we get a new climate domino effect.
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Once one major country or region
adopts carbon dividends
adopts carbon dividends
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with border carbon adjustments,
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other countries are compelled
to follow suit.
to follow suit.
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One by one the dominoes fall.
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And this domino effect
could start anywhere.
could start anywhere.
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My preference, strongly,
is the United States,
is the United States,
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but it could also start
in the United Kingdom,
in the United Kingdom,
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in Germany or another European country,
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or even in China.
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Let's take China as an example.
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China is committed to reducing
greenhouse gas emissions,
greenhouse gas emissions,
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but what its leaders care even more about
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is transitioning their economy
to consumer-led economic development.
to consumer-led economic development.
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Well, nothing could do more
to hasten that transition
to hasten that transition
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than giving every Chinese citizen
a monthly dividend.
a monthly dividend.
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In fact, this is the only policy solution
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that would enable China to meet
its environmental and economic goals
its environmental and economic goals
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at the same time.
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That's why this is the killer app
of climate policy,
of climate policy,
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because it would enable us to overcome
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each of the barriers we discussed earlier:
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the psychological barrier,
the partisan barrier,
the partisan barrier,
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and, as we've just seen,
the geopolitical barrier.
the geopolitical barrier.
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All we need is a country to lead the way.
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And one method of finding
what you're looking for
what you're looking for
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is to take out an ad.
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So let's read this one together.
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Wanted: country to pioneer
carbon dividends plan.
carbon dividends plan.
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Cost to country: zero.
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Starting date: as soon as possible.
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Advantages: most effective
climate solution,
climate solution,
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popular and populist,
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pro-growth and pro-business,
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shrinks government
and helps the working class.
and helps the working class.
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Additional compensation: gratitude
of current and future generations,
of current and future generations,
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including my daughter.
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Thank you.
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(Applause)
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ABOUT THE SPEAKER
Ted Halstead - Policy entrepreneur, climate expert, authorTed Halstead is breathing new life into US and global climate policy by mobilizing conservative leaders and CEOs around a breakthrough carbon dividends solution.
Why you should listen
Ted Halstead is the founder and CEO of the Climate Leadership Council, whose mission is to convene global opinion leaders around the most cost-effective, popular and equitable climate solutions. With offices in Washington and London, the Council will expand to Berlin, Beijing and New Delhi next.
Previously, Halstead founded and led two other successful think tanks. His first, which he launched at 25, introduced new measures of progress and coordinated the Economists’ Statement on Climate Change, signed by 18 Nobel laureate economists. His second, New America, has become one of the most influential think tanks in Washington.
Halstead has published numerous articles in the New York Times, Washington Post, Financial Times, Fortune, The Atlantic, National Review, Bloomberg, Los Angeles Times and Harvard Business Review. He also published two books, including The Radical Center: The Future of American Politics (co-authored with Michael Lind).
From 2008 to 2012, he and his wife sailed around the world on a catamaran, with only their dog as crew. Halstead graduated Phi Beta Kappa from Dartmouth College, and received his Master's degree from Harvard's Kennedy School of Government, where he was a Montgomery Fellow. He was selected as a Young Global Leader by the World Economic Forum.
Ted Halstead | Speaker | TED.com