On Aug. 10, the Senate passed a bipartisan infrastructure package that included some meaningful climate measures. To achieve America’s ambitious emissions reduction goal, the legislation included hundreds of billions of dollars on electric vehicle charging stations, funding to upgrade the nation’s energy grid to facilitate the transmission of renewable energy throughout the country and much more. These are positive developments on climate policy, and seeing bipartisan support for them is encouraging.
But the infrastructure deal falls short of including major climate policy. It is looking increasingly likely the biggest climate measures will now happen through the budget reconciliation process. So far, a border adjustment fee, a fee on methane and a clean energy standard have all been discussed publicly.
While this is great progress, one more essential component of impactful climate legislation should also be included in the budget: a price on carbon. We would like Rep. Neguse and Sens. Bennet and Hickenlooper to ensure that a robust price on carbon is part of this package of policies. Economists say carbon pricing is “the most cost-effective lever to reduce carbon emissions at the scale and speed that is necessary.” For us here in Colorado, a policy like this would mean cleaner air, lots more jobs in our clean-energy economy, more stability for our outdoor industry and so much more.
Here are three key reasons why it is essential for the U.S. to include carbon pricing in our strategy to address climate change:
First, it puts us on track to net-zero by 2050. The carbon-fee-and-dividend policy prescribed in the Energy Innovation and Carbon Dividend Act (H.R. 2307) sets a price that starts at $15 a ton of C02 and increases $10 a ton annually. Resources for the Future calculates that by 2030 this policy will reduce U.S. emissions more than 50% below 2005 levels, which is in line with President Biden’s commitment.
Next, it’s a fast, effective policy across the whole economy. A clean electricity standard would reduce emissions from power plants, but that only accounts for 25% of greenhouse gas emissions. An economy-wide price on carbon, however, reaches into every sector — electricity, transportation, industry, commercial/residential real estate, agriculture and land use. It’s also quick to set up, leading to meaningful impact in a matter of months.
Finally, some, or all, of the revenue could be used to give money back to Americans. A carbon tax becomes affordable for ordinary Americans when the money collected from fossil fuel companies is given as a dividend, or “carbon cash back” payment, to every American to spend with no restrictions. This protects low- and middle-income Americans who otherwise might not be able to afford the transition. Studies show that the monthly carbon cash back payments are enough to essentially cover increased costs of 85% of American households, including 95% of the least-wealthy 60% of Americans.
Beyond those reasons for action here at home, we’re under pressure from other countries that are already pricing carbon. The European Union announced it will impose a carbon border tax, beginning in 2023, on imports from nations that do not have an equivalent carbon price. When this goes into effect, American exporters will be subject to the European carbon tax, placing them at a competitive disadvantage. However, if the U.S. implements its own carbon price and carbon border adjustment, the policy can keep American businesses competitive and motivate more nations to price carbon themselves. The Biden administration has floated a carbon border adjustment, but based on the World Trade Organization’s rules, we would likely need to put a price on carbon here at home, too.
As Congress gets to work on legislation designed to meet America’s commitment to reducing greenhouse gas emissions, it’s clear that a robust price on carbon is an essential tool that must be included.
In the last few weeks, more than 21,000 concerned citizens have reached out to their members of Congress, including Colorado’s Sens. Bennet and Hickenlooper, asking them to support a price on carbon. With our communities increasingly experiencing the effects of climate change, we urge them to take this important step.
Susan Secord is on the Steering Committee of the Boulder chapter of Citizens’ Climate Lobby. Mark Reynolds is Executive Director of Citizens’ Climate Lobby.
This opinion column does not necessarily reflect the views of Boulder Weekly.