Biden should embrace a carbon tax

Op-ed by Henry M. Paulson and Erskine B. Bowles

The Washington Post, May 10, 2021

President Biden deserves credit for his actions to date on climate change. In rejoining the Paris agreement, directing new energy standards, pushing for bold congressional action, convening world leaders and announcing dramatic emissions reduction targets, he is showing that American climate leadership is back. But there is one major climate policy arena where the United States needs to take a bold step forward: carbon pricing.

A carbon tax, which taxes carbon dioxide and other greenhouse-gas emissions, is a proven means to raise large sums of much-needed revenue while lowering carbon emissions. It is supported by 67 percent of Americans, embraced by a bipartisan consensus of economists and increasingly supported by the business community. Some critics argue a carbon tax is a political distraction, one that fails to meet the climate challenge and disproportionately hurts the poor. Others say a carbon tax would damage U.S. competitiveness and break Biden’s promise to not raise taxes on households earning less than $400,000 a year. We believe each of these concerns can be addressed.

We have no illusions that a carbon tax is an easy sell in Washington. But it may be the only realistic way that Biden can advance his broader agenda. The opportunity lies in forging a bipartisan coalition of fiscally responsible legislators who know that we need to invest in infrastructure and that a carbon tax will be more successful in curbing emissions than excessive regulation will.

While attempting to address many of our country’s immediate and long-term needs, the administration’s spending proposals, on top of our nation’s already-leveraged balance sheet, push the limits of fiscal policy beyond what has historically been considered prudent. The short-term impact may well be positive. But the longer-term challenge is daunting. This year, U.S. debt is expected to exceed the value of the entire U.S. economy for the first time since World War II, posing a serious threat to our long-term future. A 2017 study by the Treasury Department estimates a carbon tax that starts at $49 per ton of emissions, rising at 2 percent annually, could raise $2.2 trillion over a 10-year period.

Would a carbon tax be regressive? Not necessarily. For one thing, the wealthy use a lot more carbon-based energy than those with lower incomes. More importantly, carbon tax revenue could be invested in poorer communities that face disproportionate risks from climate change; targeted to support and retrain workers who are adversely affected by the transition to a clean-energy economy; used to increase the earned income tax credit or other wage subsidies; or redistributed through dividend checks or tax rebates on a monthly basis. Or they could be distributed directly into individual retirement accounts. Such strategies would be highly progressive.

Of course, a primary reason for a carbon tax is to discourage firms from spewing carbon into the atmosphere and encourage them to develop, invest in and scale clean, low-carbon technologies. The Climate Leadership Council estimates a $40 per ton carbon tax, increasing by 5 percent per year above the rate of inflation, would reduce U.S. emissions to 50 percent below 2005 levels by 2035. A carbon tax also offers an incentive to other nations to drive down emissions. That’s because a necessary feature of any sensible carbon tax plan is what’s known as a border adjustment, which would impose economic penalties on certain goods from countries that do not reduce their emissions. In effect, this would protect American competitiveness and alleviate one of the biggest problems in global climate governance — that some countries free-ride on the emission cuts of others. This would move us beyond the model of the Paris agreement, which is based on voluntary emission targets that, while necessary, are wholly inadequate for averting the worst outcomes of climate change.

Putting a price on carbon would advance America’s leadership role in the world. Today, 46 countries and 35 subnational or regional entities, including markets in California and New England, are on the road to instituting carbon pricing mechanisms. The upshot is a mishmash of voluntary and mandatory markets with incompatible standards that price carbon imperfectly and inadequately. It is essential that we standardize the trade in carbon at home and reach agreements internationally to ensure the adequate functioning of this new market. Make no mistake: Carbon credits and debits are on a path to becoming the currency of climate change. The dollar is the world’s reserve currency because investors have confidence in the United States and its economy. The White House should be setting the standards to price carbon, creating the climate-change reserve currency. We can partner with the Europeans, and we certainly shouldn’t cede this responsibility to the Chinese.

The carbon tax is not a cure-all, of course. A mixture of other policies, from regulation and subsidies to R&D investment and targeted incentives, will be necessary to meet the climate challenge. More revenue, including user fees — tolls, vehicle miles taxes, congestion pricing — as well as a responsible increase in corporate taxes and an increase in the highest income tax rate will be needed to meet our fiscal and infrastructure needs. But without a price on carbon, the combined effect of these policies will be insufficient. We believe that, by embracing a carbon tax, President Biden could help restore America’s infrastructure, fiscal strength and leadership at a time when all are sorely needed.

Henry M. Paulson Jr. is a former U.S. treasury secretary and chairman of the Paulson Institute. Erskine B. Bowles served as chief of staff to President Bill Clinton and co-chair of the National Commission on Fiscal Responsibility and Reform. They are co-chairs of the Aspen Economic Strategy Group.

https://www.washingtonpost.com/opinions/paulson-bowles-biden-carbon-tax/2021/05/10/2230cda4-af62-11eb-b476-c3b287e52a01_story.html

Melting glaciers drove '21% of sea level rise' over past two decades

By Ayesha Tandon, CarbonBrief, April 28, 2021

Glacier melt across the world has accelerated over the past two decades, a new study finds, with the resulting meltwater accounting for 21% of global sea level rise over the same period.

The paper, published in Nature, is the first to analyse the rate of melting from almost every glacier on the planet – around 200,000 in total, excluding the Greenland and Antarctic ice sheets – to show how they have lost mass and thickness between 2000 and 2019.

Glaciers are currently losing more mass than either the Greenland or Antarctic ice sheets, the study finds, and annual rates of glacier thinning have “nearly doubled”  from 36cm in 2000 to 69cm in 2019.

The authors highlight that the accelerating rise in sea levels seen over the 21st century – which is “often attributed to the accelerated loss from both the Greenland ice sheet and Antarctic ice sheet” – is also “substantially” driven by melting glaciers.

The data behind this study really are “a game changer”, says one scientist who was not involved in the study. They tell Carbon Brief that the findings are further “rigorous evidence” of the “urgent need for rapid and collective action” to reduce greenhouse gas emissions.

‘A milestone in global glacier monitoring’

Glaciers are slow-moving rivers of ice that form from an accumulation of snow over many years. Around 10% of the world’s land surface is currently covered by glaciers, which store around 70% of the Earth’s freshwater.

However, as global temperatures rise, glaciers around the world – with just a few exceptions – are retreating at an unprecedented rate. Meltwater from glaciers is expected to be the second biggest contributor to global sea level rise during the 21st century.

Although there are more than 200,000 glaciers on the planet, only a few hundred are currently monitored in-situ. This means that scientists need to use other methods to keep track of the world’s retreating glaciers.

Prof Michael Zemp – a glaciologist at the University of Zurich and the director of the World Glacier Monitoring Service, who was not involved in the study – led the last global assessment on glacier mass change in 2019.

He tells Carbon Brief that, in his assessment, his team collected data for around 20% of the planet. By contrast, the new study was able to use imagery from NASA’s Terra satellite to achieve coverage of 97%. This is “a big step forward”, Zemp tells Carbon Brief.

The map below marks the location of the glaciers analysed in this study in purple. In the field of glaciology, 19 “glacierised” regions are often used to help scientists to compare glaciers from different parts of the world. These regions are shown by the boxes and numbers.

On top of the improved spatial coverage, the new study also offers greater detail than the previous assessment. Dr Alex Gardner – a research scientist in the sea level and ice group at NASA, who was not involved in the study – says the study is “truly impressive” and that it “adds detail to an evolving record of glacier demise”. He tells Carbon Brief:

“Through the analysis of over half a million satellite images, the authors were able to construct the most detailed record of how glaciers around the world have – and are – responding to natural variability within the climate and, more importantly, to human caused warming of the atmosphere.”

Dr Robert McNabb – a lecturer at the University of Ulster and author on the study – explains that their study is “the first to report elevation and mass change observations for nearly every glacier in the world at the individual glacier scale”.

“For a glacier modeller like myself, the data behind this study really are a game changer”, says Dr Ben Marzeion from the University of Bremen, who was not involved in the study. He tells Carbon Brief:

“For many years, we have had the huge problem of extremely sparse observations, but with the data from [the new study] we will be able to much better constrain the models we use for projecting glacier change and the glaciers’ contribution to sea level rise. We will also be able to assess the models’ ability to represent climate-glacier interaction a lot better.”

Glaciers vs ice sheets

The authors of the new study calculate that, between 2000 and 2019, glaciers collectively lost around 267bn tonnes of ice every year. Assuming that all the water from melting glaciers eventually reaches the ocean, this means that meltwater from glaciers alone contributed 0.74mm of sea level rise every year.

The mass loss from glaciers has also accelerated over the past two decades, according to the study. The results show that the annual “thinning rate” of glaciers was 36cm on average in 2000, but increased to 69cm by the year 2019. It adds that the “mass loss acceleration” of glaciers has increased by 48bn tonnes per year per decade.

To compare the mass loss from different glaciers, the authors assessed the 19 regions shown in the map. They found that 83% of meltwater comes from just seven of these regions: Alaska (25%), Greenland periphery (13%), Arctic Canada North (10%), Arctic Canada South (10%), Antarctic and subantarctic (8%), High Mountain Asia (8%), and Southern Andes (8%).

…[M]eltwater from Alaska has contributed to one quarter of total glacier mass loss during this century. Zemp explains that this is because Alaska is experiencing rapid warming and the region is also densely populated with glaciers.

The study also compares overall mass loss from glaciers with that from melting ice sheets.

The study finds that, between 2000 and 2019, mass loss from glaciers was 47% higher than from the Greenland ice sheet (GIS) and more than twice that of the Antarctic ice sheet (AIS)

The authors also note that, while glacier mass loss “distinctly accelerated” over the entire 2000-19 period, the mass loss from ice sheets decelerated since a peak in the mid-2010s. From this, the authors “infer that acceleration of sea-level rise since 2000, which is often attributed to the accelerated loss from both the GIS and AIS, also substantially originates from glaciers”.

(Literature suggests that the slowdown in mass loss from the Greenland ice sheet was due to two “anomalous cold summers in western Greenland”, while the deceleration from the Antarctic ice sheet was caused by a cumulative mass gain of 980Gt since 2009 in the Queen Maud Land region of the East Antarctic ice sheet.)

The authors estimate that between 6% and 19% of the 21st century acceleration in sea level rise is due to mass loss from glaciers. Meanwhile, they estimate that 21% of overall sea level rise comes from glacial meltwater.

The study also touches on the difference between “marine-terminating” and “land-terminating” glaciers. McNabb tells Carbon Brief that all glaciers lose mass from surface melting. However, marine-terminating glaciers that run into the sea also lose mass from “melting below the waterline and calving of icebergs.”

Marine-terminating glaciers make up around 40% of Earth’s total glacierised area. However, the study finds that they only contribute 26% to the global mass loss. The authors suggest this is because marine-terminating glaciers show a delayed response to climate change compared to land-terminating glaciers.

Glaciers in a warming climate

To understand the main factors that drive glacier retreat, it is important to understand how they gain and lose mass. Each year, snow falls on the glaciers adding to their “mass balance” during the cold season, and meltwater flows away from the glacier during the warm season. This can be explained using the analogy of a bank balance, Zemp explains:

“A glacier works like a bank account. You have the income, which is the snow – mainly over winter – and then you have the expenditure which is the melt, from temperature, solar radiation and so on. You take the balance at the end of the hydrological year to see if the glacier spent more than it gained.

Using this analogy, Zemp tells Carbon Brief that glaciers are currently in a “financial crisis”, because warming temperatures are causing many regions to lose between 1-3% of their remaining ice volume each year.

The maps below show the change in glacier elevation (top), temperature (middle) and precipitation (bottom) between 2000-09 and 2010-19 in the 19 glacierised regions.

In the top map, reds and yellows show areas where glaciers have shrunk between 2000-09 and 2010-19, while blue indicates regions where glaciers have grown. In the middle map, red shows regions that have warmed, with darker reds showing greater warming, while blue shows regions that have cooled. Similarly in the bottom map, green shows regions that have seen an increase in precipitation, and brown shows a decrease in precipitation.

The authors find that many of the changes in glacier mass line up with changes in temperature and precipitation. For example, glaciers in Alaska, western Canada and the US are responsible for 50% of the acceleration in mass loss over the 20th century, according to the study, and the maps show a notable temperature rise and snowfall decrease in these regions.

Similarly, the authors note that there are outliers to the general trend of melting. For example, in Iceland, the glacier thinning rate halved between 2000-05 and 2000-19. McNabb tells Carbon Brief that this was due to a notable increase in snowfall over the area.

The authors find that the impact of temperature on melting glaciers exceeds that of precipitation:

“Although decadal changes in precipitation explain some of the observed regional anomalies, the global acceleration of glacier mass loss mirrors the global warming of the atmosphere.”

Gardner warns that the warming temperatures are putting the world’s glaciers “out of equilibrium” and that the imbalance “will only grow as the full impacts of a warming climate comes into effect”.

He adds that this study should be used as “further scientifically rigorous evidence” of “the urgent need for rapid and collective action to reduce the dumping of greenhouse gases in our planet’s atmosphere”.

To see the maps & other graphics: https://www.carbonbrief.org/melting-glaciers-drove-21-of-sea-level-rise-over-past-two-decades?utm_campaign=buffer&utm_content=buffer5719c&utm_medium=social&utm_source=twitter.com

Economists: A US carbon tax would be progressive

Guest column by Gilbert Metcalf & Lawrence Goulder, The Hill, April 28, 2021

Environmental justice concerns have been at the forefront in discussions of U.S. environmental policy. They have been central, in particular, to discussions of proposals for a nationwide carbon tax to address climate change. While economists tend to favor a carbon tax as the most cost-effective way to promote reductions in emissions of greenhouse gases, progressives and EJ groups often oppose this option on the grounds that it is regressive — that it would disproportionately burden low-income households.

Our own research, conducted independently, finds that this claim is unfounded. We find that a carbon tax is inherently progressive, narrowing the income gap between rich and poor households. Beyond that, we find that it can potentially raise real incomes of low-income households.

It is true that one outcome of a carbon tax works toward regressivity. A carbon tax would lead to higher prices of goods and services, especially those that are carbon-intensive (e.g., electricity and gasoline). There is ample evidence that low-income households spend a disproportionate share of income on these carbon-intensive goods and services; as a result, the higher prices from a carbon tax tend to have a regressive impact.

If this were the whole story, the carbon tax’s overall impact would indeed be regressive.

However, several other features of a carbon tax make it progressive. As some have noted, a carbon tax’s revenue can be returned to households in ways that promote progressivity. The Climate Leadership Council’s “carbon dividend” approach, in which the revenues are recycled in the form of a dividend check of the same amount to every U.S. household, would significantly work toward progressivity.

While this form of revenue-recycling may have many attractions, we find that such targeting is not needed to make the carbon tax progressive. Our work shows that a carbon tax is inherently progressive — a feature that has been overlooked in policy discussions. The carbon tax’s inherent progressivity gives policy makers more options in policy design — they can consider devoting some or all of the revenues to other purposes (such as providing compensation to displaced workers, or financing investments in infrastructure) while maintaining progressivity.

The inherent progressivity stems from other economic responses to the tax.

First, transfer programs in the United States, including Social Security and food assistance from the Supplemental Nutrition Assistance Program (SNAP), are partially or fully indexed for inflation. Lower income households, who rely more heavily on payments from these programs, are more protected from the higher prices of carbon-intensive goods and services.

Second, while much of the cost of a carbon tax is passed through to consumers, a significant fraction of the cost would be borne by owners of capital (i.e., shareholders). That’s because the industries most likely to be affected by a carbon tax are highly capital-intensive. This effect on capital returns is progressive since shareholders tend to have higher incomes.

The two responses above are sufficient to bring about an overall progressive impact.

A third outcome, environmental in nature, would augment the progressivity. In addition to reducing emissions of carbon dioxide (the main objective of the policy), a carbon tax would lower emissions of several local air pollutants correlated with CO2. The associated health benefits are likely to be especially important for low-income households — another progressive impact.

Meanwhile, alternatives to the carbon tax, including regulation and tax subsidies, are much less progressive and don’t provide benefits to minority and low-income households in the same way that a well-designed carbon tax could.

Beyond the dimension of progressivity, the carbon tax has further attractions related to fairness. While progressivity focuses on the relative burdens to low- versus high-income households, the absolute impact on income is an important ethical consideration. A 2017 U.S. Treasury study estimated that households in each of the lowest seven income deciles would on average experience an increase in overall income if the CLC’s revenue-recycling approach were adopted.

Claims that a carbon tax is regressive are simply incorrect. They stem from a narrow focus on just one of the several important channels through which a carbon tax affects people. A more comprehensive assessment reveals that it is progressive and can enhance the quality of life of individuals across the income spectrum.

Gilbert Metcalf is the John DiBiaggio Professor of Economics at Tufts University. He was the Deputy Assistant Secretary for Environment and Energy at the U.S. Department of the Treasury in 2011 and 2012. Follow him on Twitter @GibMetcalf

Lawrence Goulder is the Shuzo Nishihara Professor of Environmental and Resource Economics at Stanford University. He has served on several scientific advisory committees to the U.S. and California environmental protection agencies. 

https://thehill.com/opinion/energy-environment/550691-economists-a-us-carbon-tax-would-be-progressive?rl=1

Biden's unlikely new ally on climate change: Corporate America

Now corporate lobbyists need Republicans in Washington to deliver on policy.

By Lorraine Woellert, Politico, April 27, 2021

Donald Trump called climate change “a Chinese hoax” and said global emissions goals would be “very hard on our business.” But when the former president pulled the U.S. out of the Paris accord in 2017, there was no celebrating in the C-suite.

Instead, Corporate America went where the federal government wouldn’t, with companies issuing their own Paris-aligned pledges even without pressure from regulators. The We Are Still In campaign — hundreds of corporate leaders, nonprofits and cities — was born and had an outsized presence at climate meetings that year in Bonn, where several companies committed to targets for cutting emissions.

Now those business leaders have allied with President Joe Biden to push Congress to do its part. Executives who stepped into the vacuum left by Trump say they need Washington to standardize corporate risk disclosure, modernize the electrical grid, price carbon, and put money into technology if the U.S. is to meet its goal on greenhouse gas emissions.

“We can’t do it alone,” HP Inc. CEO Enrique Lores said at a World Wildlife Fund event last week. “There is a limit to how far private industry can take this.”

The shift by business, a group long tied to Republicans, has raised hope among environmentalists that corporate lobbyists will be able to do what they couldn’t —persuade lawmakers, particularly conservatives, to limit the release of greenhouse gases.

In the past, “you couldn’t go to a board and have a real conversation about climate. People thought you were making a political statement,” said Helen Clarkson, CEO of The Climate Group, a nonprofit that partners with business on climate action. “Suddenly you saw these companies stepping forward and lobbying President Trump not to pull out of Paris.”

It’s a fight for survival, and profits. Some corporations are long on virtue-signaling and short on action, but many others, including HP, Microsoft Corp., General Motors Co., Danone S.A. and Gap Inc., are spending millions of dollars to push the boundaries of renewable energy, protect water resources, and deploy new technology as they rush to deal with climate change and gain a competitive edge.

Their impact has been significant. As of last year, corporate buyers had reached deals for a combined 10.6 gigawatts of renewable capacity, the equivalent of 33 million solar panels. On Wall Street, firms with $37 trillion under management, including mutual fund giants State Street and Vanguard, have pledged to go net zero.

If just 80 of the largest corporate emitters meet their pledged targets, they could reduce global emissions by more than 8 billion metric tons, or about 25 percent, according to an analysis by BloombergNEF. That’s the equivalent of zeroing out all emissions in the U.S. and Japan combined.

“The magnitude of this is colossal,” BNEF analyst Kyle Harrison said. “This is only 80 companies, and what they can achieve is ridiculous.”

More than 400 companies this month urged Biden to align with their own promises to cut emissions, what’s known in climate lingo as a nationally determined contribution or NDC. Biden committed to reducing emissions by half during a global climate summit he convened last week.

“The last time an NDC was set, who even knew what an NDC was? It wasn’t as if companies were engaged. Now they’re on the front lines,” said Anne Kelly, vice president of government relations at CERES, a nonprofit that helped organize the Biden letter. “There’s a genuine recognition of climate change. I don’t see this as virtue signaling.”

Armed with economic data, executives are working Capitol Hill to make a case for carbon pricing and, in some cases, convince Republican lawmakers that the cost of Biden’s multitrillion-dollar jobs plan is greater than the cost of inaction.

Privately, many lawmakers are listening, lobbyists say. But publicly, climate remains politically divisive. Senate Minority Leader Mitch McConnell has decried “woke” corporations for weighing in on social issues, and fewer than half of Republicans think the U.S. should reduce its greenhouse gas emissions, according to a survey from the Yale Program on Climate Communication.

“We’ve had offices call us up and say, ‘We want to figure out stuff that makes sense for us,’” said Chris Adamo, vice president for federal and industry affairs at Danone North America. “The actual dialogue, for Republicans, can be very constructive.”

The food multinational, like hundreds of other companies, has set its own internal price on carbon — about $42 per metric ton — and is pushing for government help on sustainable agriculture.

“We need policies,” Adamo said. “We’re going to invest millions of dollars of our money. To do it alone is going to be very difficult and probably a lot slower. That’s true for most sectors.”

Even the U.S. Chamber of Commerce, long the dominant force in corporate lobbying in Washington, has changed its approach. In 2019 the group ceded to pressure from members to abandon its obstruction on climate action, and last week it endorsed Biden’s Paris pledge. The test will be how — or whether — the chamber works to bring Republicans on board.

“What those statements did in my mind was free up Republican members of Congress who had been progressive on climate issues but were afraid to talk about it,” said Hugh Welsh, president of nutrition giant DSM North America. “We’ll have to wait and see when the first big climate bills come up whether the chamber actively promotes them or lobbies against them. I’m going to give them the benefit of the doubt for the time being.”

College students organizing under the banner of Change the Chamber — think a battalion of Greta Thunbergs — last year began naming and shaming the association’s members on social media. Their message: Customers won’t let brands get away with hiding behind the trade group.

Plenty of businesses were on board the last time Congress tried a heavy lift on climate. The contours of a 2009 cap-and-trade bill from then-Reps. Henry Waxman (D-Calif.) and Ed Markey (D-Mass.) were designed by a committee in which business played a prominent role.

“Chemistry, oil, auto — they were all part of it,” Waxman said in an interview. “We had important business backing. It wasn’t enough.”

“I worked on the assumption that Republicans were the party of business. I was wrong,” Waxman said. “Let’s hope this time I’m not wrong.”

https://www.politico.com/news/2021/04/27/bidens-climate-change-corporate-america-484784

Biden’s Big Government Should Be Handled With Care

The president should lean more heavily on the private sector to boost his infrastructure plan’s odds of success.

Op-ed by Steven Rattner, The New York Times, April 9, 2021

The Biden administration has put forward the biggest, boldest, most expensive expansion of government in at least a half-century. The goals listed are on target and its sweeping ambition is welcome, but the administration’s excessive reliance on government for execution of these goals and its intrusion into the domain of the private sector are worrisome.

Yes, I’m all for government leaning in and becoming part of the solution. And yes, the years of de-prioritizing public investment need to be reversed. We just need to do it more thoughtfully. Here’s my plea to our policymakers: Take the politics and bureaucracy out of these critical initiatives. Embrace private sector solutions when applicable. And use tax incentives more aggressively to drive behavior.

The Biden plan doesn’t just tiptoe around the quagmire of the government picking winners and losers, or what has been termed “industrial policy” — it lurches into it. Hundreds of billions of dollars will be invested by government agencies, whose record of success with direct involvement in the commercial world is, at best, mixed.

A recent case in point: the 2009 American Recovery and Reinvestment Act, which, at $787 billion, was much, much smaller than the more than $4 trillion sum of the two Biden plans put forward thus far. While the 2009 stimulus did put much-needed dollars into the economy without fraud or abuse (as Mr. Biden likes to remind us), it didn’t achieve another of its goals: a swifter transition to clean energy.

Among its failures: Two solar manufacturing plants it helped start shut down. A Jacksonville, Fla., battery plant that President Barack Obama heralded in a 2016 visit, recently laid off many of its workers and shifted its business model. A coal-fired power plant in Texas that was capturing the carbon it was emitting, effectively stopped doing so in 2020.

As a 2015 Congressional Research Service report reviewing stimulus projects further noted, “Solyndra declared bankruptcy in late 2011 and defaulted on its $535 million loan, Abound Solar received about $70 million of its $400 million loan before shuttering its solar panel operation and filing for bankruptcy in 2012, and SoloPower never met the requirements to initiate its $197 million loan guarantee.”

None of this should be too surprising. Going all the way back to the creation of the Synthetic Fuels Corporation in 1980, which I covered as a New York Times correspondent, the federal government’s recurring efforts at directing energy transitions have mostly struggled.

As for transportation, only government can build highways and mass transit, and repair bridges. But here, too, Washington-directed programs sometimes fall spectacularly short. For more than 15 years, the Federal Aviation Administration has been trying to construct a “NextGen” air traffic control system; it’s still trying. By allowing for more-efficient flight routes, upgrading our air traffic infrastructure would do more to reduce oil consumption than most other projects.

No one should want the Biden plan to fall short. But given its vast sweep — I conservatively counted more than five dozen initiatives — the administration should increase its chances of success by leaning more heavily on private models for help and using tax incentives to a greater extent for efficiency.

Lawmakers should consider, for example, moving air traffic control into an independent corporation, as a number of other countries do. (The private aviation lobby, which enjoys the current absurdly low fees it pays to use the system, has helped block this effort.)

As recently as 2009, sustainable investing was in its infancy. Today, dozens of companies have developed this special expertise. Government can improve the returns on its sustainability investments by partnering with the best of these businesses.

For some investment programs that don’t lend themselves to private sector involvement, such as dams, it’s still possible to take responsibility for execution out of the normal governmental process (where the combination of influence peddling and inexperience can be devastating). Instead control could be vested in more independent entities, similar to the Reconstruction Finance Corporation of the Great Depression era, which successfully directed loans to farmers, railroads, schools, state governments and various private companies.

Unfortunately, the Biden administration has often shown disdain for business so far. But during the height of the Great Recession, when I headed President Obama’s auto industry task force — which was essentially removed from politics and staffed largely by private sector refugees — I believe we proved the efficacy of a business-oriented model.

Finally, there’s the tax system. To be fair, the Biden plan does use tax incentives in a number of constructive ways — to spur housing creation, to encourage purchase of electric vehicles and more. But we can go much further. It’s criminal that the 18.4-cent federal gasoline tax hasn’t been raised since 1993, especially with oil prices so low. A tax of $43 per ton on carbon would be roughly equivalent to a 38-cents-per-gallon increase in the price of gasoline, leading motorists to cut back on their driving and opt for public transportation. And the proceeds could be rebated to Americans other than the wealthy via income tax credits.

The simplest, most effective and ultimately least expensive way to address the climate problem would be through a tax on greenhouse gas emissions — a carbon tax. Think about how many inefficient programs, how many thousands of pages of regulations and how much waste could be avoided.

Rattner is a New York investment asset manager who served as lead adviser to the Presidential Task Force on the Auto Industry in 2009.

https://www.nytimes.com/2021/04/09/opinion/biden-spending-clean-energy.html?referringSource=articleShare

Executives Call for Deep Emission Cuts to Combat Climate Change

More than 300 corporate leaders will ask the Biden administration to nearly double the emission reduction targets set by the Obama administration.

By Lisa Friedman, The New York Times, April 13, 2021

WASHINGTON — More than 300 businesses, including Google, McDonalds and Walmart, are pushing the Biden administration to nearly double the United States’ target for cuts to planet-warming emissions ahead of an April 22 global summit on climate change.

In a letter to President Biden, expected to be released Tuesday morning, chief executive officers from some of the nation’s largest companies will call on the administration to set a new Paris Agreement goal of slashing the nation’s carbon dioxide, methane and other planet-warming emissions at least 50 percent below 2005 levels by 2030.

That is roughly what most major environmental groups want, and the corporate executives called the target “ambitious and attainable.”

Former President Donald J. Trump pulled the United States out of the Paris Agreement, eradicating emissions reduction targets set by the Obama administration that many environmentalists had seen as too weak. President Obama had pledged to cut national emissions 26 percent to 28 percent below 2005 levels by 2025.

With Mr. Biden promising to tackle climate change intensely, climate change activists are watching to see how much more ambitious his targets will be than those set when he was vice president. Mr. Biden, who returned the United States to the Paris Agreement on Inauguration Day, has said the United States will announce fresh targets for the Paris Agreement on or before a virtual summit of world leaders he is hosting around Earth Day next week.

According to two administration officials familiar with the deliberations, the target is expected to be a range that will include a 50 percent reduction in emissions.

Organizers of the business letter said they hoped such a message coming from the private sector — including electric utilities like Exelon and Pacific Gas & Electric, as well as dozens of companies based in Republican districts — would resonate strongly with Congress. Other signators include Target, Verizon and Philip Morris, the tobacco giant once considered a firm ally of the Republican Party.

The effort also underscores the delicate path corporate leaders are treading in the post-Trump era. Their decisions to break with Republicans on issues like voting rights and racial justice have rankled their traditional allies in the G.O.P. Pressing the Biden administration to aggressively combat climate change could further alienate Republicans, who have long fought emissions regulations as “job killers” that would make American business less competitive.

“I think this signals a major shift in the corporate community’s understanding of the urgency of climate change as a systemic financial risk,” said Anne Kelly, vice president for government affairs at the sustainability nonprofit Ceres, which organized the letter.

Republican lawmakers have given no indication they are likely to be swayed, but they framed their opposition as a defense of consumers, not businesses.

“The Paris climate agreement will result in increased energy costs for Americans while Russia and China increase greenhouse gas emissions,” Senator John Barrasso of Wyoming said in a statement. He predicted whatever target Mr. Biden announces will be “punishing.”

Patrick Flynn, vice president of sustainability for Salesforce, which signed on to the letter, said he hopes businesses will lobby Congress to support the Biden administration’s target.

“We know it will create millions of jobs, we know it’s a good thing for the economy, and we know if we do it right we can do it in a way that leaves no one behind,” he said.

Ralph Izzo, president and chairman of the Public Service Enterprise Group, a New Jersey-based energy company, said he is supporting the 50 percent target because he has seen the consequences of climate change in his state.

“It’s critical that we take significant action against the threat,” he said.

The corporate response is all the more remarkable because Mr. Biden’s plan for curbing climate change would be paid for in large part by raising corporate tax rates, a move sure to raise objections among at least some of the climate-conscious corporations. He also has called for a clean electricity standard and promised new regulations on the utility sector, automobile makers and oil and gas industries.

Mr. Flynn said his company has supported tax increases in the past and called Mr. Biden’s $2 trillion infrastructure proposal “a good investment” for the long term. Other companies that signed on to the letter sidestepped questions about the tax plan.

Ms. Kelley said she believes companies can “decouple” the commitments the United States needs to make to curb climate change with differences they may have with the administration around how to pay for it. “I think they see that as a separate set of negotiations,” she said.

Under the Paris Agreement, nearly 200 nations set their own voluntary targets for cutting emissions by 2025, including major developing nations like China and India. The rules of the accord do not punish countries for failing to meet the goals, but do require countries to set them.

The United States is currently less than halfway to its original goal.

Concentrations of atmospheric carbon dioxide continue to rise. According to a recent measurement taken at the Mauna Loa Observatory in Hawaii, concentrations recently topped 420 parts per million for the first time since levels have been recorded.

https://www.nytimes.com/2021/04/13/climate/business-executives-climate-change.html?smid=tw-nytclimate&smtyp=cur