PRETTY MUCH every Republican politician insists that the country should return to “the Reagan way.” Few have first-hand knowledge. An exception is George P. Shultz, President Ronald Reagan’s longtime secretary of state and one of the Republican Party’s most distinguished senior members. On the Sunday Opinion page, Mr. Shultz writes that the Reagan he knew would have behaved very differently than his party has on the issue of rising global temperatures. He argues that his former boss would not have ignored the scientific warnings and accumulating evidence regarding global temperature change, nor would he have embraced some complex liberal social-engineering scheme in response. Rather, Reagan would have acted on the best conservative principles: prudence, practicality and a reverence for free enterprise.

Mr. Shultz does not attack global warming doubters, some of whom, such as Senate Environment and Public Works Committee Chairman Jim Inhofe (Okla.), hold high positions in the Republican Congress. Instead, he suggests that even those who harbor doubts should accept that the cautious, conservative thing to do is hedge against risks.

“We all know there are those who have doubts about the problems presented by climate change,” he writes. “But if these doubters are wrong, the evidence is clear that the consequences, while varied, will be mostly bad, some catastrophic. So why don’t we follow Reagan’s example and take out an insurance policy?”

Mr. Shultz doesn’t have to speculate about what Reagan would do. He saw what the president did when confronted with warnings about a thinning ozone layer: He acted, buying the nation an insurance policy it turned out to need, and he marshalled private businesses to help.

Mr. Shultz’s climate insurance policy would come in the form of more funding for energy research and a simple carbon tax, the honest free-marketer’s response to the risks associated with pumping carbon dioxide into the atmosphere. The goal, he rightly argues, should not be to unfairly tip the scales against the fossil fuels that have driven the economy so far for so long. Rather, it should be to finally put all energy sources on a level playing field, each paying the full costs of the energy it produces. Where it would be affordable to cut emissions, private businesses and consumers would do so. Where it wouldn’t be, they would hold off.

Mr. Shultz would rebate all the money the carbon tax raised directly back to Americans, a policy design that previous analyses have shown will leave the vast majority of U.S. households, including poorer ones, neutral or better off.

What Mr. Shultz doesn’t say, but is nevertheless true, is that if Republicans pressed Democrats to accept a carbon plan that refrains from picking winners and losers, a plan that eschews the ugly spectacle of politicians using environmental policy to pay off interest groups, they would likely win big. If the GOP got behind a simple, market-based carbon strategy, it could demand an end to irrational energy subsidies and Environmental Protection Agency carbon mandates. Republicans would have serious policy leverage — if only they were willing to follow the Reagan way.