On June 30, the Democratic members of the House Select Committee on the Climate Crisis released an exhaustive roadmap outlining how the United States can
shift away from artificially "cheap" fossil energy towards
a safer, healthier, more just and stable climate future.
Among the many recommendations in this 538 page report for sector-by-sector regulations and subsidies (and the end of some), the report has a short section (page 286), with seven principles for how Congress should implement
carbon pricing
.
They make powerful arguments for putting a carbon price at the
center
of climate mitigation strategies. For those who might not read the entire report (but you should look at it anyway), here are some highlights, followed by analysis from the Niskanen Center:
Put a Price on Carbon Pollution
"The environmental and societal costs of greenhouse gas emissions from the burning of fossil fuels are clear, including loss of life and property damage caused by wildfires, stronger hurricanes, and other extreme weather events. When a ton of carbon pollution billows from a smokestack, however,
no one pays for that pollution.
As a result, industry, investors, and consumers do not internalize the true cost of the choices they are making and have less incentive to choose less-polluting products or technologies.
Until the market reflects the true cost of carbon pollution, the U.S. economy will remain biased toward fossil fuel combustion."
One way to correct this market failure is to put a price on each ton of pollution. Congress could design a comprehensive climate plan
without
a carbon price, but a carbon price “percolates through the entire economy, providing an incentive for all decision makers in the economy to look for ways to reduce emissions.”
Align Tax Codes with Climate Goals
(p285)
"Clean energy technology faces several structural barriers to rapid and widespread deployment. At the top of the list is a tax code that benefits oil, coal, and other incumbent energy technologies over new technologies and an economic system that fails to account for the cost of carbon pollution in energy prices.
Congress should ensure that the U.S. tax code aligns with the national goal of achieving net-zero emissions by no later than 2050.
As a start, Congress should repeal unnecessary tax breaks for the oil and gas industry."
Environmental Justice
(p287)
"...the federal government (should) integrate environmental justice in its decision-making; engage members of low-income communities and communities of color and build their capacity to participate in the policy-making process; the EPA (should) enforce the law and address the disparate health impacts of cumulative pollution in environmental justice communities.
And
here's
the consensus opinion (a rare event) by almost 3,600 professional US economists -- left, right and center -- on how to reduce emissions in the most efficient, effective and equitable manner -- with a carbon tax. It's signed by
27 Nobel Laureate economists, 4 former Chairs of the Federal Reserve, 15 former Chairs of the Council of Economic Advisers, 2 former Treasury Secretaries and a vast array of academic economists.
"Global climate change is a serious problem calling for
immediate national action.
Guided by sound economic principles, we are united in the following policy recommendations.
I.
A carbon tax offers the most cost-effective lever to reduce carbon emissions at the scale and speed that is necessary.
By correcting a well-known market failure, a carbon tax will send a powerful price signal that harnesses the invisible hand of the marketplace to steer economic actors towards a low-carbon future.
II.
A carbon tax should increase every year until emissions reductions goals are met and be
revenue neutral to avoid debates over the size of government.
A consistently rising carbon price will encourage technological innovation and large-scale infrastructure development. It will also accelerate the diffusion of carbon-efficient goods and services.
III. A sufficiently robust and gradually rising carbon tax will
replace the need for various carbon regulations that are less efficient. Substituting a price signal for cumbersome regulations will promote economic growth and provide the regulatory certainty
companies need for long- term investment in clean-energy alternatives.
IV.
To prevent carbon leakage and to protect U.S. competitiveness, a border carbon adjustment system should be established.
This system would enhance the competitiveness of American firms that are more energy-efficient than their global competitors. It would also create an incentive for other nations to adopt similar carbon pricing.
V.
To maximize the fairness and political viability of a rising carbon tax, all the revenue should be returned directly to U.S. citizens
through equal lump-sum rebates. The majority of American families, including the most vulnerable, will benefit financially by receiving more in carbon dividends than they pay in increased energy prices."
Again, CCL congratulates the House Committee staff and leadership, including our own Rep. Jared Huffman, for this outstanding and comprehensive work. The fierce urgency of the science requires that a carbon tax be considered
fundamental
to the elaborate agenda outlined, which will take years to accomplish.
