Carbon Tax or Keystone XL, Why Not Both?

Whether the President should approve the Keystone XL pipeline project has moved up front on the nation’s agenda. There is enough oil in the tar sands of western Canada to make us an oil exporter again, or at least satisfy our domestic needs for the foreseeable future. But it is dirty, and it has to be moved to refineries; that’s where the pipeline comes in. It will run, if approved, across our prairie belt to Gulf refineries.

Big business has invested heavily in the project so far. Environmentalists are dead set against it and just staged a massive protest rally in Washington. The President kicked the can down the road last year, postponing a decision till after the election. Now he has to decide.

Pipeline backers have the money and a lot of political clout, while the environmentalists are tapping into widespread and growing concern about the prospects of global warming and catastrophic climate change. There is some agreement that our world is warming but very little on the timing and the urgency. We disagree on what the country needs most, a pipeline that helps guarantee affordable power while the nation transits to renewable sources, or a more urgent transit to renewables, impelled in part by market forces emerging as fossil fuel shortages cut in.

The proposal to tax carbon emissions has been with us for years but is increasingly becoming an explicit factor in the equation. The environmentalists want our government to impose a stiff and gradually rising tax on coal mines, power plants, and other sources that are now polluting the atmosphere with CO2. This would not only help with the deficit problem, it would provide a strong stimulus to national efforts to develop our renewable energy sources and applications. They argue that the pipeline would discourage such efforts, since for a relatively long period to come, energy from renewables would not effectively compete price-wise with fossil fuel. The power moguls counter that we’ll be putting more emphasis on renewables anyway, the economic benefits the pipeline will bring are too big to ignore, and we’ll need fossil fuels as a transitional fix for however long it will take to adapt to global warming.

So there you have it, the liberals want the carbon tax and no pipeline, the conservatives want the pipeline but no carbon tax. What to do?

It should not be an either-or, black or white argument. However rapidly or slowly climate change comes upon us, we’ll need more power to cope, and quite likely at least some of us will need it pretty soon. Think of how much electric power New York City will want if the weather starts to get as hot as New Delhi, just for air conditioning? And that is just one city, and the USA is just one country, and the whole world will be afflicted. No, as I look at the future weather reports as provided by the scientists, I see my vote going for the pipeline.

On the other hand, I see an equally compelling argument for our nation to lead the world by getting off our collective butts and mobilizing for the most rapid possible transition to renewables. The carbon tax strikes me as an essential early step in that process. Recent tantrums our Congress, and the Republican Party, have been throwing over any taxes that impinge on their core constituencies leads me to doubt whether they’ll ever consent to a carbon tax if they can possibly avoid it. But they might be lured into accepting the carbon tax if that would get them the pipeline, assuming they could haggle over the terms.

So that is your job, Mr. President, as I see it. Work out some barter arrangement on terms that will be best for the nation, and will set an example for the rest of the world. Yes to the pipeline, but only on condition that we shall have a meaningful carbon tax. And get on with the job. We may have less time than we think.
Footnote: for a concise current statement of the arguments for both sides, see Joe Nocera’s op-ed in the 2/19 NYT (“How Not To Fix Climate Change”), and a rebuttal by James Hansen, available at

Carl Coon

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3 Responses to Carbon Tax or Keystone XL, Why Not Both?

  1. It looks like the New York Times is starting to check out your blog for oped ideas. Thomas Friedman has an oped up today that echoes your idea for a win-win very closely. Maybe you should submit some peices in the future directly to the New York Times for publication in your name as founder of Here’s the link to your echo:;jsessionid=FE5259DE6B40608D22BBB25B47D12367?a=1036045&f=28&sub=Sunday

  2. Corey Noll says:

    There is another problem here beyong global warming: that the existing pipeline infrastructure is failing, either by shortcuts or decay. yes Keystone is top of the line, but as we’ve seen in Arkansas and Deepwater among countless other so-called ‘minor’ spills is that these companies’ methods of self-policing aren’t ensuring the safety of the communities they share space with. if there is such a clamor among oil companies for Keystone, it would best be granted with stipulations requiring a full update of the systems already in place.

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