My Turn: Price on carbon must be part of this year’s climate legislation

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Published: 10/18/2021 12:28:24 PM

As discussions continue about the budget reconciliation package, transformative climate policy is in the mix.

It has been reported that the Senate is seriously considering “a potential tax on the carbon content of fossil fuels starting at $15 per ton,” paired with “rebates for low-income taxpayers and a border-adjustment tax aimed at ensuring foreign companies don’t get an advantage.”

This discussion is an encouraging development for anyone who cares about solving climate change. President Biden has named a goal of 50% emissions reductions by 2030, but modeling shows the climate policies proposed so far may only deliver 45% emissions reductions. Adding a price on carbon bridges that gap, ensuring that America meets the targets to prevent the worst impacts of global warming.

Placing a fee on carbon and returning the proceeds of the fee to American households as a cash back payment is the fastest, simplest, most efficient and fairest way to immediately start reducing carbon emissions. Since carbon pricing works in the marketplace it can come into effect quickly, incentivizing consumers to buy increasingly cheaper green energy products. Carbon pricing is efficient since it doesn’t involve large government programs and expenditures. And returning most of the fees placed on carbon back to American consumers is fair, offsetting the rising cost of fossil fuels.

Recent back-to-back climate disasters illustrate that we cannot wait a moment longer to take impactful action to slow climate change. Carbon pricing is an essential and important component for reducing carbon emissions at the speed needed.Economists say carbon pricing is “the most cost-effective lever to reduce carbon emissions at the scale and speed that is necessary.”

We would like U.S. Rep. McGovern and Sens. Markey and Warren to ensure that a robust price on carbon is part of this package of policies. For us here in Franklin County, a policy like this would mean cleaner air, safer jobs, reduced flood hazards along the Connecticut River and its tributaries, more stability for agriculture and reduced threats to local special places like Shelburne Falls, Barton’s Cove, Historic Deerfield and Erving State Forest.

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 CO2 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, spurring emissions reductions in 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.

Most importantly, some, or all, of the revenue could be used to give money back to Americans. The carbon cash back payments protect low and middle-income Americans as we all transition to a clean energy future. Studies show that 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.

It’s clear that a robust price on carbon and returning the proceeds of the fee to American households is essential to America’s progress on climate change. In the last few weeks, more than 29,000 concerned citizens have reached out to their members of Congress, including Rep. Neal and Sens. Warren and Markey, asking them to support a price on carbon. With our communities increasingly experiencing the effects of climate change, we urge them to use this powerful policy tool.

Harry Dodson lives in Ashfield and is a volunteer with the Ashfield chapter of Citizens’ Climate Lobby. Mark Reynolds is executive director of Citizens’ Climate Lobby.

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