Date: 11/01/07

Summary: Here, Gingrich rejects some currently popular suggestions to mitigate environmental and energy challenges—a cap-and-trade system and a carbon tax. The approach, he says, ought to reward people for using new technologies, rather than punishing them for using old technologies.

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JEFFREY SACHS: Do you think we should have a carbon trading system like you helped introduce on sulfur oxides, right now?

NEWT GINGRICH: I’m very skeptical about it. I’m skeptical for two reasons. First of all, the sulfur oxide problem is a very, very definable, limited problem involving a very small number of plants. Carbon trading is enormously complex and the European experience so far is a mess. And second, if you have single country adopt carbon trading what you will almost virtually guarantee is that the jobs and the industries will go offshore. And there’s a fairly famous case of a cement factory in Belgium that the minute they adopted carbon trading they moved the whole factory to Morocco, and it actually pollutes more in Morocco, which doesn’t have any air control standards, than it was polluting in Belgium. So, the Belgians lost the jobs, the plant increased the pollution. I’m not sure that’s a win-win strategy. I’m very cautious about cap-and-trade because I think it’s inherently politicized and it’s inherently very inefficient. Now, I’m sympathetic with the large corporations that see fifty different states adopting their own environmental standards, and suddenly see such a mess that trying to operate as a nationwide company is going to become extraordinarily complicated. And I think trying to find a different strategy—but here would be my point. Whether it’s a carbon tax, which I think is politically suicidal, or cap-and-trade which will turn out in the end I think to be a very complicated mess—both of those are designed to say, “We want to create a differentiation between non-carbon and carbon by raising the cost of carbon.” I would rather use tax breaks and prizes to lower the cost of non-carbon. You actually create the exact same differential either way.