By Alex Flint, Alliance for Market Solutions
For more than three decades, the United States has tried — and failed — to adopt a durable national policy to limit greenhouse gas emissions. Carbon taxes, cap-and-trade systems, global agreements, subsidies and regulations have been proposed, rejected, enacted, weakened, repealed or struck down.
The problem is no longer a shortage of ideas. It is the absence of political circumstances under which any of them can survive.
Economists have long favored a carbon tax as the most efficient way to reduce emissions. That approach collapsed in Congress in the 1990s. Europe’s cap-and-trade model passed the U.S. House in 2009 and never reached a vote in the Senate.
International agreements have oscillated between symbolic participation and outright withdrawal. Even the Inflation Reduction Act’s subsidy-based strategy — deliberately designed as the opposite of taxes — has already been pared back under political and fiscal pressure. Meanwhile, courts have increasingly constrained regulatory efforts rooted in environmental laws written half a century ago.
Taken together, these episodes point to a sobering conclusion: The United States has run through the government’s standard climate-policy toolkit. Taxes, subsidies and regulations have all failed to produce a stable, long-term framework for reducing emissions. Waiting for better science or more alarming forecasts is unlikely to change that.
Climate change advances on a human time scale that is slow enough to blunt urgency, even as its effects become increasingly clear. The frog-in-a-pot analogy remains depressingly apt. If meaningful climate policy is to emerge, it will not be because policymakers suddenly discover a better idea. It will be because political circumstances force a reconsideration of old ones.
That moment is approaching — not because of climate change itself, but because of Social Security.
Under current law, the Social Security Trust Fund will become insolvent around 2033, triggering an automatic cut in benefits of roughly 23%. No Congress, Republican or Democrat, will allow that to happen. Unlike deficits, infrastructure decay or climate change, this is a hard political deadline. A deal will be forced.
Resolving the coming Social Security crisis will require confronting a taboo that has shaped American politics for decades: new federal revenue. Lawmakers will debate raising the retirement age, cutting benefits, increasing the payroll tax rate, eliminating the cap on taxable wages and other possible remedies. Every option will be fiercely contested, politically treacherous and deeply unpopular. Millions of Americans will pay more, receive less or both.
In that context, a carbon tax — dismissed as politically impossible since the 1990s — may represent something different: not an ideal solution, but a viable contributor.
Imposed upstream, a carbon tax has fewer individual losers than many alternatives. Its costs can be partially offset for vulnerable households. It reduces the need for more intrusive regulatory approaches. And it can raise substantial revenue — on the order of $100 billion a year — without directly taxing work or savings. In a negotiation where nearly every revenue option is toxic, that matters.
Just as important, a carbon tax is one of the few revenue measures with a plausible coalition of supporters. Businesses often prefer a predictable price on carbon to an expanding web of regulations; economists across the political spectrum endorse it because it is grounded in efficiency; environmental advocates see it as a durable mechanism for reducing emissions; and fiscal hawks view it as a way to help stabilize the nation’s long-term finances. Few other revenue sources can claim even a subset of that support.
None of this guarantees success. A carbon tax has been a first-tier option for technocrats and a second-tier option, at best, for politicians for as long as climate policy has been debated. And the negotiations surrounding Social Security will be a once-in-a-generation political brawl. Careers will end; alliances will fracture; proposals that seem unthinkable today will briefly appear, then disappear, from the table.
But moments like this — rare, unavoidable and deeply unpopular — are often the only times when technically sound policies have a chance to survive. Climate policy in the U.S. has repeatedly failed not because its logic was flawed, but because the politics never demanded resolution. Social Security’s insolvency will.
If the U.S. is ever to move from aspirational climate commitments to a policy that endures across administrations, it will not be because the science became clearer or the rhetoric more urgent. It will be because the politics left no alternative — and policymakers were willing to recognize that a carbon tax is not a punishment or a gesture, but a tool of governance.
The process that produces a Social Security deal will be ugly. It will involve higher taxes, lower benefits or both. It will leave few winners. The best outcome may simply be that, amid the damage, one durable and effective climate policy finally emerges.
Alex Flint is the executive director of the Alliance for Market Solutions, a conservative organization advocating for pro-growth climate and energy policies. Banner photo: A Social Security Administration building (iStock image).
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