Can We Afford to Wait for the Clean Power Plan to Work Through the Courts?

You may love EPA’s Clean Power Plan (CPP). Or you may hate it. Maybe you are somewhere in between those two views. But wherever you stand, it’s undeniable that the protracted and expensive fight over the CPP has become a very inefficient response to a problem that gets worse every day.

EPA has been drawing up this plan ever since 2010, when a cap-and-trade system passed by the House died in the Senate. Like any regulation, it went through many drafts and was modified in response to public comments. After it was issued in August 2015, half the states and hundreds of companies and interest groups went to federal court to scuttle the plan. In February the Supreme Court blocked implementation, and this week 10 judges on the U.S. Court of Appeals for the D.C. Circuit presided over seven hours of argument about whether EPA had overstepped its authority in issuing the CPP. Some people camped out overnight in the rain to get one of the 400 seats in the courtroom and two overflow rooms.

The court likely won't render a decision until early next year, and after one side petitions for the Supreme Court to hear the case, the High Nine (or Eight) could take until next fall to decide whether to take it up. That probably would mean a decision in 2018. Then it would take two years for the states to produce their plans and several more years for them to start cutting back on carbon emissions.

How much higher will Earth’s temperature climb while this plays out? How much more time and money will high-paid people put into resolving this debate and developing the 50 state plans?

We think there’s a smarter solution.

The vast majority of economists believe that a carbon fee is the most efficient way to tackle climate change. So do the heads of the World Bank and the International Monetary Fund. Ditto for a growing roster of business leaders, including ExxonMobil CEO Rex Tillerson. A simple carbon fee would enable the free market to accelerate the drive from fossil fuels to clean energy, and it would provide much more of the certainty that the business world needs to make sound investment decisions.

The problem with this solution is political: Congress does not want to vote for a fee. Our mission is to find a way to shift the political calculus. The key to success is the enormous revenue stream that a carbon fee would create to tackle major priorities. A $35-per-metric-ton fee, rising incrementally, would generate at least $1.5 trillion over ten years. That would enable lawmakers to undertake tax reform, including a reduction in the corporate tax rate, which is a major goal for House Speaker Ryan and Ways and Means Committee Chairman Brady. Some of the proceeds should also go to low- and middle-income households to offset slightly higher energy costs. Some of the money could finance a portion of the infrastructure improvements that both Donald Trump and Hillary Clinton are championing.

Republicans also would welcome this opportunity to use the market to fight climate change instead of relying on the Clean Power Plan and other EPA regs.

Why do we think a carbon fee can pass Congress? We went up on Capitol Hill and shared our idea with more than 200 members of Congress, or their aides. We came away convinced us that such a measure could pass. The key is support from the business community and other influential voices in congressional districts. We also take encouragement from polls that show growing public support, including among Republicans, for action to stem climate change.

Another reason that a carbon fee is better than the Clean Power Plan is that it would apply to all carbon emissions—not just the 32 percent coming from power plants. The fee would reduce the carbon emitted by transportation (27% of total), industry (20%), commercial and residential (12%), and agriculture (9%).

In fact, since the Clean Power Plan was first proposed, low-priced natural gas and renewable energy have put most states within reach of their 2030 goals. And by the time the CPP is finally implemented, assuming it survives its long legal odyssey, those goals will be even less ambitious.

With a new president and a new Congress on the horizon, all of us should concentrate on mobilizing support for a carbon fee so that the United States can honor its Paris pledge and hand future generations a livable planet.