The Momentum is Clear

Today, the Paris Agreement will enter into force. That means that the international effort to rein in climate change will be shifting into the next gear. Day by day, companies, governments, and citizens are responding to the message that we need to reduce emissions.

We are not suggesting that the world can claim victory over climate change. There is a long way to go, and there are still too many opponents. But the momentum is clear.

The next gathering of leaders to maintain this progress runs from November 7 to 18 in Marrakech, Morocco. Jonathan Pershing, the State Department’s special climate change envoy, said forceful action is needed at this UN conference. For starters, climate experts say the commitments made in Paris, even if kept, would allow global temperatures to rise 3.5 degrees Celsius by 2050– well above the stated 2-degree goal. So the United States will be prodding countries to achieve emissions reductions faster, Pershing said at an Atlantic Council event October 25.

While the Paris agreement aims to reevaluate country pledges every five years, countries are operating on different timelines. The U.S. path to curbing emissions has a 2025 target, but most other countries are eyeing cuts for 2030.

“We anticipate they will make stronger and stronger pledges going forward,” Pershing said, according to an account in The Christian Science Monitor. He said that downward trends for renewable energy prices could help lead to steeper emissions cuts.

Though the United States has been one of the leaders in recent climate change developments, we are not on track to reach our pledge to slash emissions 26 to 28 percent (from the 2005 baseline) by 2025, climate policy experts say. And that means we risk losing our leadership role, and indeed the power to ask others to increase their ambition.

The legal hurdles that EPA’s Clean Power Plan (CPP) must clear before it can prevent a single pound of CO2 emissions indicate how difficult it will be to hit our 2025 target with regulations alone. And the consensus of half a dozen independent modeling exercises is that even if the CPP survives and is implemented, we can still not get more than two-thirds of the way to our 2025 goal with existing law. After all, this plan deals only with power plant emissions. They account for just 37 percent of all energy-related CO2 emissions—and an even more modest percentage of all greenhouse gas (GHG) emissions.

That means we need more effective action, and by a lopsided margin, economists and energy experts say the only plausible path to our 2025 goal is a carbon fee or tax. Only Congress can provide such a levy.

When the new president and new Congress start work in January, we suggest they debate this creative compromise: a revenue-neutral fee on carbon emissions with the sizable proceeds going toward a reduction in other taxes: lowering the corporate tax rate (the highest in the industrialized world) and returning the balance of the money to low- and middle-income families to compensate them for slightly higher energy costs. Use of the revenues for tax reform, and perhaps deficit reduction, offers a way to build the GOP support necessary to pass a carbon fee.

There is a lot of talk about large federal infrastructure investments in 2017. If Congress is so inclined, it could choose to tap carbon revenue for that purpose as well.

Congressional Republicans are highly unlikely to sign on to such a bipartisan compromise unless business leaders and other influential players “back home” signal their approval. Most of these leaders are ahead of lawmakers in recognizing that U.S. businesses will lose ground to overseas competitors if the nation digs in its heels on tackling climate change.

In essence, we are coming down to a choice between continued reliance on an expanding web of regulations and a free market-based carbon emissions fee. That should be an easy choice for both Republicans and Democrats.