Politicians who oppose taking action to counter climate change often say that they will not allow “unelected bureaucrats in Washington” to wipe out jobs.
These politicians, assuming they want the facts on climate change and the U.S. economy, should sit down with some of the business executives who are concerned about what rising temperatures and extreme weather are doing—and will do—to their bottom lines. Procter & Gamble, Walmart, Mars, and thousands of other corporations are looking objectively at the data and taking action to try to avoid becoming victims of climate change.
So far, 154 companies have taken the American Business Act on Climate Pledge, and the roster is growing quickly. Among the new supporters are Verizon, Dupont, and American Honda Motor Company.
Another of the recent signers is Avery Dennison. “Signing the pledge was an easy decision…,” said Dean Scarborough, chairman and CEO. “We unequivocally support an agreement coming out of Paris that takes a strong step toward a low-carbon future. We are cutting our own carbon emissions and taking additional measures to tackle climate change.”
In October came news that climate change could reduce average global incomes by 23 percent, compared to a world without climate change, and widen the gap between rich and poor countries. Those were the findings of a report, published in the journal Nature, by Marshall Burke of Stanford and Solomon M. Hsiang and Edward Miguel of Berkeley.
The findings are the tip of the iceberg, Burke told Michael Hiltzik of the L.A. Times. "Just in the past five years we've learned a ton about how various economic and social phenomena respond to climate change. Every rock we look under has been surprising. Health, human violence, and labor productivity are all affected by hotter temperatures."
"We are only beginning to understand just how much damage a changed climate can wreak," Thomas Sterner, an economist at the University of Gothenburg in Sweden wrote in an editorial in Nature accompanying the study.
A recent report by Citigroup said: “The incremental costs of following a low carbon path are in context limited and seem affordable, the 'return' on that investment is acceptable and moreover the likely avoided liabilities are enormous. Given that all things being equal cleaner air has to be preferable to pollution, a very strong ‘Why would you not?’ argument begins to develop.”
At that conference, the CEO’s of seven top clothing companies, including Gap, Adidas and Levi Strauss, called for an ambitious climate change deal. The executives said they were concerned that warmer weather could drive up their costs by harming cotton production. "Climate change mitigation and technological innovation are vital to the health and well-being of those who make and use our products, as well as to the future supply of materials needed to make those materials," their joint statement said.
With so many business leaders concluding that the time has come for significant steps to curb climate change’s financial fallout, why isn’t Congress stirring? Most of the congressional energy on this front seems to be going into efforts to block the Clean Power Plan.
So the fundamental question, post-Paris, is: How can Congress become part of the solution to a problem that troubles so many in the business community? We think that some creative compromise is in order. Here’s one that we have discussed, face to face, with 175 members of Congress, or their aides: Enact a carbon fee, with half the proceeds going toward a reduction in the corporate tax rate and half to citizens with low or moderate incomes. Those lawmakers who dislike the Clean Power Plan should welcome the opportunity to suspend that regulatory scheme for six to eight years and let the carbon fee prove that it can reach the plan’s goals more quickly and efficiently.
After our extended round of conversations on the Hill, we have concluded that this approach has real promise. The key is lining up business support.
The number of influential voices agreeing that a carbon fee is the best approach to the climate challenge is growing—fast. The list includes ExxonMobil CEO Rex Tillerson, IMF chief Christine Lagarde, and World Fund President Jim Yong Kim.
A carbon fee works. British Columbia has had one since 2008. It has reduced per capita fossil fuel consumption by 16 percent, while use in the rest of that country has risen by 3 percent. Meantime, British Columbia’s GDP growth has outperformed Canada’s.