75 Executives Lobbied Congress for a National Carbon Price. We Listened

FORTUNE magazine


Right before Memorial Day, over 75 businesses came to Capitol Hill to demand that their lawmakers establish a national carbon price. The participating business leaders collectively employ over 1 million U.S. workers and represent a combined market value of around $2.5 trillion—the largest group of businesses assembled on the Hill to advocate for climate legislation in a decade.

In over 80 meetings with members and staff from both the House and Senate, these business leaders spoke forcefully on the risk climate change poses to their operations, their employees, and their customers. They challenged Congress to heed their warning, accept the severity of the crisis, and take action to address the threat of a rapidly warming world. And they made clear: There is support in the business community for setting a national carbon price as a central component of any legislative strategy to address climate change.

Now, it is our responsibility, as members of Congress, regardless of our party affiliation, to respond to the businesses who drive our economy.

We represent different parts of the country and stand on opposite sides of the aisle in Washington, but we agree that there is perhaps no issue as urgent for our nation—and our economy—as tackling climate change.

Fortunately, solutions are not as elusive as politics would suggest. Seven in 10 Americans are concerned about climate change—more than ever before. Climate impacts are being felt by Americans all across the country and our constituents are calling for solutions. And an increasing number of both Democrats and Republicans agree on a key policy to address climate change: putting a price on carbon pollution.

Businesses know all about the risks of climate change. Companies are increasingly experiencing disruptions to their supply chains and damages to their assets from floods, droughts, wildfires, storms, and other climate-driven extreme weather, and investors see it reflected in their portfolios. Businesses’ bottom lines show that climate change isn’t a far-off risk, it’s a cost that’s already racking up damages to our economy to the tune of more than $300 billion a year, an amount which is only expected to grow.

That’s why we have both introduced legislation proposing a price on carbon. A price on carbon will level the economic playing field in the energy sector, unlock market-driven innovation, and lead to the deployment of low, zero, and negative carbon technologies. It will help create millions of new jobs and slash U.S. carbon emissions dramatically, making it a powerful tool for curbing climate pollution. Our bills are not the only ones—there are several proposals to price carbon that have been introduced in Congress.

The transition to a cleaner economy should not be achieved at the expense of those who will be hardest hit: That’s why we propose using the proceeds from the carbon fee to help ease the transition to a clean energy economy, by returning money to the taxpayers as a dividend each month, investing in research and development, and rebuilding our infrastructure.

Our approach also aims to efficiently reduce emissions and spur innovation and investment in new technologies. Placing a price on carbon emissions allows for individuals and companies to make more informed decisions by factoring in the cost of greenhouse gas pollution to society, allowing the market to appropriately respond by reallocating resources to lower-emissions products and behaviors. A transition to clean energy is a job creator: In 2018, the renewable energy and energy efficiency sectors alone employed nearly 3.3 million Americans. And this proposal would create and support more jobs across a wide range of sectors, including in the building trades, manufacturing, science, and engineering.

Our own states are already unlocking the growth potential of clean energy and working to minimize the future costs of rising seas. In Delaware, we are transitioning our electricity sector to 25% renewable generation by 2025. And in Florida, cities are already spending over $4 billion to harden infrastructure, improve drainage, and renourish beaches to combat tidal flooding.

The public is often presented with a false choice between growing the economy and combating climate change but we are heartened to see businesses recognize that this trade off is a myth. America must not lose out on the good paying jobs and new technologies that will come with the transition to clean energy. A strong, stable, national carbon price will help combat climate change, speed the uptake of renewable energy in the U.S., unlock innovation in our economy, and boost our competitiveness overseas.

It’s time for Congress to take bold action to address climate change and create jobs. Putting a price on carbon will help us reach both of these goals.

Chris Coons is a Democratic senator from Delaware. Francis Rooney is a Republican representative from Florida.

Global CO2 nears troubling benchmark

By Scott Waldman, E&E News, May 7, 2019

Researchers at the Mauna Loa Observatory recently observed record-high levels of atmospheric CO2.

The world has surpassed a level of carbon dioxide not seen in about 3 million years, and levels are accelerating an unprecedented pace.

Atmospheric carbon dioxide almost topped 415 parts per million on May 1 at the Mauna Loa Observatory in Hawaii, according to the University of California, San Diego's Scripps Institution of Oceanography. On that day, the observatory measured a CO2 level of 414.94 ppm. Levels could go even higher and surpass the 415 ppm mark before the end of spring.

Every year, carbon dioxide tends to spike in the spring before plant life reemerges in a large part of the world to begin the uptake of the greenhouse gas.

But the rate of carbon emissions has accelerated in recent years, said Gernot Wagner, author of "Climate Shock: The Economic Consequences of a Hotter Planet" and a researcher at Harvard University's Center for the Environment. The jump from 410 ppm to 415 ppm happened more quickly than the jump from 400 ppm to 405 ppm, which happened faster than the previous 5-ppm jump, and so on, he said.

That accelerating rate of increase is one of the more alarming, and less covered, aspects of the rising CO2 levels, he said.

"It's what matters most for all these climate damages; it's the increase in those concentrations that is still increasing at an increasing rate," he said. "We are going in the wrong direction at an increasing speed."

The newest benchmark brings current CO2 levels in line with the Pliocene Epoch, which occurred between 2.58 million and 5.33 million years ago. At that time, global average temperatures were 5.4 to 7.2 degrees Fahrenheit hotter than today and 18 degrees warmer at the poles, according to Scripps. Sea levels were 16 to 131 feet higher than today, Scripps has found.

During ancient climate change events, an increase of 10 ppm of atmospheric carbon dioxide might have taken 1,000 years. It has taken just six years to go from 400 ppm to 415 ppm. When the late Charles David Keeling started measuring carbon dioxide at Mauna Loa in 1958, levels stood at 316 ppm, a slight increase from the 280 ppm before the Industrial Revolution.

At the current rate, CO2 levels will top 1,000 ppm in about a century. That level will profoundly alter life on the planet and render wide swaths of Earth uninhabitable, scientists have found.

Keeling's data set — it's now maintained by his son Ralph — is regarded as one of the key measurements that demonstrate how human-caused climate change is affecting the planet. The elder Keeling developed the Keeling curve, which shows annual fluctuations in CO2 levels and links them to fossil fuel consumption.

As carbon dioxide levels rise, so, too, do global temperatures. The last five years have been the hottest on record. And while nothing happens as the 415 ppm benchmark is surpassed, it's another significant step into a warmer world, Wagner said.

"We've never had this global experiment. It's an amazingly fast increase," he said. "Three million years ago, when we did have CO2 levels as high as they are today, those changes happened very, very slowly, and the world was a very different place. We had crocodiles in the Arctic Circle; we had sea levels 30 to 90 feet higher than today."

Climate change: Is an economic overhaul needed?

April 20, 2019

Al Jazeera

The planet is facing a crisis. Temperatures continue to rise, bringing extreme weather, exacerbating food shortages, and leading to the extinction of some species. Scientists have repeatedly warned that the effects of climate change are becoming irreversible.

What will it take for politicians and the public to tackle climate change and implement policies that bring actual solutions? And what role does the world economic structure play in perpetuating the crisis?

In this week's Arena, we debate these issues with renowned climate scientist James Hansen, climate activist and cofounder of the Sunrise movement, Varshini Prakash and Amanda Mukwashi, CEO of the global NGO Christian Aid.

To see the 12-minute show: https://www.aljazeera.com/programmes/upfront/2019/04/climate-change-economic-overhaul-needed-190419180710245.html

A Carbon Tax is the nudge the world needs

Column by Tim Harford, Financial Times

You can’t please everyone, it seems. Royal Dutch Shell has announced plans to plant trees in order to absorb some of the carbon dioxide produced when we burn the fossil fuels it sells. What’s more, it plans to invite motorists to chip in at the pump by buying “carbon offsets”: a clever way to help the planet, raise cash, and spread the blame around. Environmental campaigners are sceptical. So am I. 

I admit an interest here. I once worked for Shell (with the love-hate relationship that might imply), met my wife at Shell, and have occasionally been paid to return to Shell and dispense pearls of wisdom. Yet, despite a grudging affection for Big Oil that very few people share, I think climate change is far too important a challenge to entrust to oil companies. 

The issue is not whether they have benevolent intentions. (I assume Shell’s motives are mixed. Whose aren’t?) It’s that the dramatic reduction in carbon emissions we need isn’t something that is within an oil company’s gift. 

We’re all involved. If you drive a conventional car, use a gas cooker or boiler, or — green tariff or no — are plugged into a national electricity grid, then you, like me, are part of the problem. Our instinctive reaction is to guilt-trip each other and big companies into doing something. That is understandable, but falls short. Guilt is too feeble a tool and it is often applied in the wrong place. 

Our intuitions about how our daily activities warm the planet are unreliable. Which breakfast contributes most to greenhouse gas emissions: fresh berries flown in from Kenya, toast browned in a toaster powered by coal-fired electricity, or cereal drenched in milk from methane-belching cows? Even if you know the right answer, it’s absurd to expect many others to know — and even more absurd to expect enough of them to care. Voluntarism is not enough to solve climate change. 

One response, then, is to demand an ambitious programme of government investment and regulation — the most prominent of which is the Green New Deal, advanced in the US by Ed Markey and Alexandria Ocasio-Cortez, two prominent Democrats. The exciting thing about the Green New Deal is that it has serious political momentum focused at addressing climate change. 

Yet this momentum has come at a price. The details have deliberately been left vague, and grand aims often win more support than hard practicalities. (See also: Brexit.) The Green New Deal is also expansive. The resolution not only wants to act against climate change, but to “promote justice and equity . . . repairing historic oppression of indigenous peoples, communities of colour, migrant communities, deindustrialised communities” and many others. Worthy goals these may be, but in mobilising the US government to take action on every imaginable progressive goal, the whole project may become derailed by its own utopianism. 

The other risk of a huge centrally planned response to climate change is that of a huge centrally planned response to anything: clumsy megaprojects chosen for their political or bureaucratic acceptability rather than because they deliver the biggest results for the lowest cost. A planned response to climate change isn’t hopeless, because there are some obvious big wins — tightening rules on the energy efficiency of new buildings, and replacing coal-fired power with renewable alternatives. Yet the best case for the Green New Deal is that even a clumsy response may still be better than none at all. 

But there is a better way: a carbon tax (or its close sibling, a carbon permit auction). A broad-based tax on carbon dioxide and other greenhouse gases would be far less expensive than a Green New Deal is likely to be, yet it could motivate action on a scale that is both grander and more precise. Every part of the economy and each decision we make would be shaped by such a tax. 

A carbon tax would pull billions of different levers in an economy that is both complex and saturated in fossil fuels. Each one of the billions of different products on sale can be designed, produced, transported and consumed in a way that might increase or reduce carbon emissions. A carbon tax nudges the energy mix to shift in favour of renewables, but also pushes fossil fuels from coal towards gas. It encourages efficiency in the design of cars, homes, any light bulb or any motor, but it also rewards frugality. A lump-sum subsidy can encourage the uptake of electric cars — but a carbon tax will also reward those who cycle instead of driving. 

Our modern economy reflects countless choices, made by billions of people all over the world. A broad-based carbon price influences them all. Nothing else can. 

I fear that, like Buridan’s Ass, the American political system may continue to do nothing rather than choose between different plans for dealing with climate change. I would rather a Green New Deal than inaction, and a carbon tax alone is not the ideal response. But such a tax is the long-overdue, all-embracing response to climate change that America, and the world, badly needs. Everyone who cares about climate change should be advocating for it. 

Yes, We Need a Green New Deal. Just Not the One Alexandria Ocasio-Cortez Is Offering.

Op-Ed by Steven Rattner

The New York Times, March 20, 2019

Yes, of course, we need a Green New Deal to address the world’s most urgent crisis, global warming.

Just, please, not the one that a flotilla of liberal politicians, including seven of the top Democratic presidential hopefuls currently in the Senate, are signing up for in droves, like children following the pied piper in the old legend.

Our modern-day pied piper, Representative Alexandria Ocasio-Cortez, is trying to lure us into a set of policies that might help save the planet but at the cost of severely damaging the global economy.

To be sure, by the time the resolution was introduced into Congress, some of its most ludicrous provisions (like the deadline of 2030 for a full transition to renewable energy and the immediate halt to any investment in fossil fuels) had been eliminated or watered down.

But as important as continuing to prune the absurd or damaging provisions would be to add what is the most effective way to attack climate change: using taxes and market forces rather than government controls to reduce harmful emissions.

That has been a problem for decades, at least since Washington got seriously into the business of improving the environment, back in 1970 with the creation of the Environmental Protection Agency — under President Richard Nixon!

Politicians prefer that approach because using regulation hides the costs of reducing emissions. The decision, for example, to force improvements in automobile mileage by requiring each manufacturer to improve overall fleet efficiency has added thousands of dollars to the cost of cars.

Higher car prices have the countervailing impact of encouraging Americans to hang onto their older, less fuel-efficient cars for a longer time, offsetting at least some of the gains from newer cars. Nor have the regulations, with their many escape hatches, kept consumers from buying even more sport utility vehicles and pickup trucks as gas prices have remained historically low.

Fortunately, there is a better way to address the climate problem at far lower cost to the economy: a tax on greenhouse gas emissions. That can be imposed in any number of ways. The 18.4 cent federal gasoline tax, for example, hasn’t been increased since 1993 even as most other developed countries impose far higher levies.

A particularly thoughtful proposal has come from the Climate Leadership Council, a bipartisan organization that counts more than 3,300 economists among its signatories. Elegant in its simplicity, the key provision would be the imposition of an escalating tax on carbon. At an initial rate of $43 per ton, the levy would be roughly equivalent to 38.2 cents per gallon of gasoline.

To prevent polluters from fleeing overseas, the tax would be imposed on imports from countries lacking a similar provision while exports to those countries would not be taxed. While difficult to implement, that component is important to work out.

The entire proceeds from the tax would be rebated to consumers. The council suggests an equal amount for each American; my view would be to exclude the wealthy (who hardly need the estimated $2,000 a year in payments) and disproportionately favor those closer to the bottom.

Why are so many economists, even conservative ones, in favor of a massive new tax? Because markets do not always price in “externalities” like pollution. In addition to cutting consumption, raising the price of carbon would arguably do more to encourage development of alternative power sources than all the massive new government spending programs that advocates of the Green New Deal envision.

Some technical problems would need to be addressed, such as how the higher prices would filter through inflation calculations and create unintended cost of living adjustments to wages and Social Security payments.

But those are details; the key point is that a carbon tax has been judged by climate hawks like Resources for the Future to be far more effective in reaching the goals of the Paris agreement than the well-intended regulations put in place by President Barack Obama and his predecessors.

That’s at least part of why the plan enjoys support from an armada of organizations not often on the same page, like Exxon Mobil and Conservation International.

Historically, the politics of even small increases in the gasoline tax have been tough. A 2017 proposal in the House to increase tax by just one penny went nowhere. But recent polls suggest that perhaps sentiment is changing; a survey by the Energy Policy Institute at the University of Chicago found that 44 percent of Americans favor a carbon tax while only 29 percent oppose one.

Given how late we are to the climate battle, maintaining some sensible regulation will also be necessary. But a hefty carbon tax would go a long way toward winning the war.

Steven Rattner, a counselor to the Treasury secretary in the Obama administration, is a Wall Street executive and a contributing opinion writer. 

It’s time to act on climate change — responsibly

By U.S. Senators Lisa Murkowski (R-AK) and Joe Manchin (D-WV)

The Washington Post, March 8, 2019

The two of us have more in common than might meet the eye. We come from different parties, but we are both avid outdoorsmen and represent states that take great pride in the resources we provide to the nation and to friends and allies around the world. Alaska and West Virginia know that resource development and environmental stewardship must move in tandem, which is why we are committed to putting forward bipartisan solutions to help address climate change.

There is no question that climate change is real or that human activities are driving much of it. We are seeing the impacts in our home states. Scientists tell us that the Arctic is warming at twice the rate of the rest of the world. Rising temperatures and diminishing sea ice on Alaska’s shores are affecting our fisheries and forcing some remote communities to seek partial or total relocation. In summer 2016, West Virginia experienced unprecedented flooding that killed 23 residents and inflicted tremendous damage across the state.

Congress is in the middle of a debate about the appropriate way to tackle climate change. This is often portrayed as an issue with just two sides — those who support drastic, unattainable measures to reduce greenhouse-gas emissions, and those who want to do nothing. We believe the time for sensationalism is over. And we are seeking ideas that will bring people together, rather than drive them apart.

On the Senate Energy and Natural Resources Committee, we are working together to find pragmatic policies that can draw strong and enduring support. In our hearings this year, we have heard from a range of experts who are helping us to gather facts that shape these efforts.

Just this week, we held a hearing focused on climate change and the electricity sector. We heard that utilities are pursuing cleaner energy technologies and integrating them into their networks. These changes to the generation mix reduced carbon dioxide emissions by 28 percent between 2005 and 2017 and lowered costs to consumers.

Yet, our witnesses also agreed that to effectively mitigate the impacts of climate change, we must do more to pursue low- and zero-carbon technologies that will continue to lower emissions.

The United States leads the world in research and development. Our national labs and universities are working toward the next scientific breakthrough, and private investors are pursuing the next game-changing technology. The United States is at the forefront of clean-energy efforts, including energy storage, advanced nuclear energy, and carbon capture, utilization and sequestration. We are committed to adopting reasonable policies that maintain that edge, build on and accelerate current efforts, and ensure a robust innovation ecosystem.

The impact of developing these new technologies will be felt by Americans from all walks of life, including residents of rural communities and other areas served by older technologies. Transitioning these communities to more efficient forms of energy will provide them with cleaner energy that is also more stable and has lower costs, which will bring about additional benefits.

American ingenuity has solved many of the great challenges of our time and is key to addressing climate change. If the United States is going to lead by example, we must continue to lead the world in the development of new and improved technologies. On the Energy and Natural Resources Committee, we agree it is time to act. And that is why we will work to find responsible solutions worthy of West Virginians, Alaskans and all Americans.