Making the price of carbon more honest

By George T. Frampton Jr., Co-founder of the Partnership for Responsible Growth.

A Pigouvian tax. That’s the common-sense response to Fred Hiatt’s plea in his Feb. 12 op-ed, “Don’t celebrate the budget deal. It imperils America,” that Congress “fund” the nation’s priorities. Such a levy, named for British economist Arthur Pigou, is intended to correct an inefficient market outcome.

We subsidize the burning of carbon. We all pay later for lung cancer, asthma, heart disease and the lost productivity resulting from these diseases. Its price does not include the costs of more frequent and more intense hurricanes, wildfires and other natural disasters that climate change is exacerbating.

By honestly pricing carbon, we could accelerate the inevitable transition to clean energy and reduce carbon’s increasingly high costs to society. Doing so would provide a second benefit: A $49-per-metric-ton fee, increasing by 2 percent a year over inflation, would generate $2.1 trillion over 10 years. Even after rebating a portion of that to lower- and middle-income households to compensate them for slightly higher energy costs, there would still be more than $1 trillion left to reduce the fast-rising national debt and address our infrastructure needs.

Bangor (Maine) Daily News: Maine is not as vulnerable as Florida, but the toll of climate change still will be high

By William C. Eacho, co-founder of the Partnership for Responsible Growth

We may not be as vulnerable as our friends in Florida, but Mainers are likely to pay a heavy toll as the climate continues to change. A recent climate assessment by federal scientists concluded that the largest increase in intensity and frequency of heavy precipitation will be in the Northeast.

Sea levels already have risen 7 to 8 inches globally since 1900, with 3 inches of that probably since 1993. That is a rate not seen in any century for at least 2,800 years. The Northeast has and will experience sea level rise greater than the global average, scientists say.

Bloomberg politics: There's One Unspeakable Fix That Would Help Pay for the GOP's Tax Cuts

By Eric Roston

Paying for tax reform is easy—as long as the White House and Congress don’t mind fixing climate change at the same time.

That’s the counterintuitive pitch of Robert Litterman, a financial economist who became famous on Wall Street in the 1990s for co-inventing a method (PDF) for allocating assets within a portfolio. He went on to become Goldman Sachs Group Inc.’s top risk manager and then led its quantitative asset management investments until he left in early 2010. Today, he’s the chairman of the Risk Committee at Kepos Capital.


Letter to the Editor

Wildfires, hurricanes, droughts, heat wave. It’s time to take action on climate change, and residents of Michigan’s largest congressional district should be pleased that their representative in Congress, Jack Bergman, has just joined the House Climate Solutions Caucus. He is the first member from Michigan.

Many people think that all Republicans are climate change skeptics. In fact, half of the 60 members of this caucus are Republicans.

Their interest in this challenge reflects growing concern in the party. For example, 62 percent of Trump voters support taxing and/or regulating the pollution that causes global warming, according to a Yale survey, and that was before Hurricane Harvey hit Houston.

If we are to make significant progress on climate change, this caucus will have to provide some of the leadership.

We hope that Congressman Bergman can help persuade his colleagues to engage in the art of compromise that legislators are paid to perform. Here’s one idea for this fall: To pay for tax cuts, enact a carbon fee to accelerate the shift to clean energy.

George T. Frampton, Jr.

Co-founder, Partnership for Responsible Growth


Letter to the Editor

If Congress is intent on passing a tax-reform bill, leaders from both parties should insist that it not pump more steroids into the national debt [“Tax reform for cowards,” editorial, Sept. 29]. Publicly held national debt now tops $14 trillion. It’s already headed for almost $25 trillion over the next 10 years, pushing the ratio of debt-to-gross domestic product higher than ever, even the peak just after the end of World War II. President Trump’s proposal is pouring gasoline on the fire, endangering our capacity to fund a strong national defense and to take care of our aging population.

The best solution would be a creative, bipartisan compromise that gives our dealmaking president the lower rates he seeks without piling on more debt: a fee on carbon emissions to pay for the tax cuts. A $49-per-ton fee on emissions, increasing by 2 percent (plus inflation) a year, would generate $2.2 trillion over 10 years. Rebate half to cover the impact on low- and middle-income households and use $1.1 trillion to cover cutting rates. It would also enable our country to honor its Paris climate pledge. This is an efficient, free-market, nonregulatory idea that deserves bipartisan support.

Walt Minnick

Co-founder of the Partnership for Responsible Growth

Washington Post: My company’s carbon footprint is the size of a small country. We need to act.

Global businesses are, quite rightly, under scrutiny for what they are doing to tackle challenges such as climate change and poverty. Last month, the United Nations asked business leaders the same questions we’ve heard countless times: What are businesses doing to help deliver on the Paris climate agreement? How can business and government work together to drive change at scale?