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George Shultz Advocates For Carbon Tax

Updated: Jan 19, 2021

Although many Republicans refuse to recognize climate change as a legitimate threat, former cabinet secretary George P. Shultz is breaking with his party to demand Congressional action on climate change. Shultz, one of only two people to hold four U.S. cabinet positions, recently appeared on Capitol Hill to push for alternative fuels and a carbon tax. He believes that the price of all forms of energy should include the costs of carbon pollution so they can compete “on a level playing field.” Furthermore, he wants to cut subsidies to all kinds of fuel (both petroleum-based and renewable) and let the “market” decide the course of America’s energy future. Shultz would then establish a program similar to Alaska’s Permanent Fund and redistribute the carbon tax revenue to consumers. 

Shultz first became concerned about climate change when he was the secretary of state for Ronald Reagan and scientists found evidence of ozone depletion. Since then, he believes, the scientific evidence of climate change has become overwhelming and the cost of inaction could be “staggering.” After studying energy policy at Stanford University’s Hoover Institution, he’s advocated for a number of strategies to mitigate climate change, including the highly controversial practice of hydraulic fracturing, or fracking. In his personal life, Shultz has installed solar panels on his California home and drives an electric vehicle. Shultz is urging his party to reconsider their stance on climate change, reminding them that Republican presidents have implemented major environmental policies in the past.

From the standpoint of the Systems of Exchange (SOE) framework, Shultz’s proposed carbon tax draws on the logic of the Price System of Exchange. In promoting his policy, he has emphasized the instrumental value of the carbon tax and other mitigation strategies, saying,

“we’ll have a much better energy future from the standpoint of our national defense, from the standpoint of our economy and from the standpoint of our environment, including climate change.” 

Furthermore, his carbon tax draws on the Price-based logic of universalism. He believes that by eliminating subsidies and including pollution costs in the cost of different forms of energy, we will create an equal footing from which renewable energies can compete. With the current system of government support for fossil fuels, he believes renewable energies don’t have a chance on the “free market.” 

Since the issue of climate change demands broad-based solutions, liberals and other climate change advocates might do well to follow Shultz’s example and emphasize the Price-based logics of their policy proposals. By highlighting the instrumental benefits of their policies for the economy, national security, and the environment, they might gain traction with a larger share of the electorate. Furthermore, the universalistic argument that climate policies will allow the market to perform better (while also protecting the environment) might even convince the strongest climate skeptics.

Image by Dean Hochman.


  1. Lochhead, Carolyn. (2013). “George Shultz Pushes for Carbon Tax.” San Francisco Chronicle. March 8. Retrieved March 13, 2013 ( 

  2. Southall, Ashley. (2013). “George Shultz Presses Congress to Act on Climate Change.” The New York Times. March 8. Retrieved March 13, 2013 ( 

  3. Biggart, Nicole and Rick Delbridge. (2004). “Systems of Exchange.” Academy of Management Review 29(1): pp. 28-49.

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