If enough of the business community speaks up in favor of a carbon fee, it will become the law of the land. That’s the number-one message we heard during two years of meetings with some 300 senators, House members, and congressional aides. Most of them were open to this solution to climate change, but they need to see evidence that business leaders “back home” are on the same page.
Can we mobilize those leaders? The latest encouraging sign came last week from Business Forward, a group of small business owners, executives, entrepreneurs, and investors from across the United States. This trade association held a series of briefings with CEOs and economists from across the ideological spectrum to examine specific tax proposals and their potential impact on business. The conclusion: Many business leaders agree that pricing carbon is a simple, fair, and market-based solution. It decreases the need for federal regulation and can reduce emissions more quickly and equitably.
So Business Forward is gathering signatures from its members for a letter to the Senate Finance Committee and the House Ways and Means Committee. It reads, in part:
We are writing to urge you to consider a federal tax on carbon. ...Pricing carbon is a simple, fair, and market-based solution. It decreases the need for federal regulation and can reduce emissions more quickly and equitably. Placing a price on carbon will encourage innovation, accelerate the commercialization of low-carbon technologies, and stimulate economic growth. Because these fees would be collected at the source (well, mine, or port), implementing a carbon tax is simpler than other forms of taxation. By adjusting fees on American exports and foreign imports, we can ensure our exports remain competitive—and push other nations to follow our lead.
The proceeds of this tax could be returned to the American people in the form of a regular dividend or offset the cost of the tax rate cuts you have proposed.
This action came on the heels of a September report, the first major study of corporate carbon pricing since President Trump’s election, documenting that more than 1,200 global businesses, including General Motors, Disney, and Shell, are moving to embrace a carbon price.
The findings are based on information disclosed to CDP, formerly known as Carbon Disclosure Project, an organization that helps investors, companies and cities track greenhouse gas emissions, as well as the companies’ sustainability reports. The CDP found that 517 companies have put a price on carbon and 732 are planning to do so in the next two years.
“Carbon pricing is a tool that is rising on the corporate agenda. It has grown across all sectors and geographies,” Manjyot Bhan Ahluwalia, the lead author of the Center for Climate and Energy Solutions report, told The Washington Post.
“Some companies may choose to do this with a carbon fee, assigning a sum of money to CO2 emissions,” Sophie Yeo wrote in that Post story. “The revenue will often be used by the business to fund emissions reduction measures such as purchasing renewable energy or boosting energy efficiency. Microsoft, for example, implemented a carbon fee in 2012. It has ranged from $5 to $10 per metric ton of CO2, and the revenue has enabled the company to reduce its emissions by 9.5 million metric tons.
“...Despite Trump’s exit from the Paris deal, many chief executives think it is just a matter of time until they face more stringent climate regulations. They figure that moving to an internal carbon price ahead of time would reduce the shock.”
“Corporations should seize this opportunity to have a seat at the table and do their part to address critical global challenges,” wrote Stephen Badger, chair of Mars, Inc., in a Washington Post op-ed. “In time, they will realize the returns on investment in a sustainable future.
“Mars has launched our new Sustainable in a Generation Plan to invest $1 billion over the next few years to tackle urgent threats facing society. …Business not only has a seat at the table; it has a vested interest in collaborating with everyone at the table. So let’s grab this opportunity with both hands.”
Another business community leader who believes a carbon fee is the way to go is Gregg Sherrill, executive chairman of Tenneco and former chairman of the National Association of Manufacturers. He sees the fee as a sensible way to pay for tax cuts so that we don’t send the national debt even higher.
We are working with the American Sustainable Business Council, which supports “measures that bring market forces to bear by making explicit the hidden externalities of fossil fuel economy. These measures include levying a price on carbon emissions, eliminating tax subsidies for fossil fuels and ending implicit subsidies, such as leasing federal lands that contain coal or oil at rates below the fair market rate.”
We encourage every business person to take a close look at a carbon fee. If you agree that there is no better way to tackle climate change, now’s the time to speak up.