Earth Day arrives this year with serious questions about the United States’ commitment to preserve a clean environment and limit the risks posed by climate change. On March 28, President Trump signed an executive order that:
- Instructs the Environmental Protection Agency to “revise” the Clean Power Plan, former President Obama’s initiative to reduce carbon dioxide emissions from U.S. power plants 32% by 2030. The plan is currently on hold awaiting the resolution of legal challenges. Trump has also instructed the Department of Justice to stop defending the plan in court.
- Ends the moratorium, implemented in January 2016, on coal leases on public land.
- Orders the EPA to stop calculating the social cost of carbon – now pegged at $36 per ton of carbon dioxide – when developing new rules.
- Rolls back regulations that limit the venting and flaring of methane emissions from oil and gas projects on federal land.
Faced with numerous impacts from climate change – rising seas, warmer temperatures, more severe weather, wildfires, health risks – Obama initiated several steps to reduce U.S. greenhouse gas emissions contributing to global warming. These steps became necessary when Congress failed in 2010 to enact legislation to price carbon. When control of the House of Representatives shifted to Republicans in 2011, efforts to legislate climate solutions came to a screeching halt. Using authority granted under the Clean Air Act, Obama ordered the EPA to address climate change through regulatory action, including the Clean Power Plan.
Although the new administration has deferred any decision on whether to remain in the Paris climate agreement, President Trump’s executive order casts great doubt on the ability of the U.S. to honor its pledge to reduce greenhouse gas emissions 26%-28% below 2005 levels by 2025. With the U.S. being the second-biggest emitter of carbon dioxide behind China, coming up short on the Paris commitment would be a tremendous setback in global efforts to keep temperatures from warming more than 2 degrees Celsius above pre-industrial levels. Crossing the 2C threshold, scientists warn, will lead to catastrophic consequences that the world is ill-prepared to handle – food shortages, coastal flooding, epidemics, mass migrations, destabilized nations.
A market-based solution
With the executive branch now shirking any responsibility to deal with climate change, Congress must step into the breach. America can meet its obligation – and then some – with a market-based solution that appeals to policymakers across the political spectrum: a steadily rising fee on carbon with revenue returned to households.
Known as Carbon Fee and Dividend, the policy would assess a fee on the carbon dioxide content of fossil fuels – coal, oil, and gas – at or near the first point sale. The fee would start at $15 per ton of CO2 and increase $10 per ton each year, sending a powerful signal to the marketplace that moves investments and behavior toward clean energy and efficiency. At the same time, revenue from the fee would be returned equally to all households, shielding families from the economic impact of the carbon fee, with many households actually coming out ahead. In order to maintain a level playing field for American businesses, a border adjustment tariff would be applied to imports from nations that lack an equivalent price on carbon. Revenue from that fee would be used for rebates to American exporters shipping to countries that don’t price carbon at a similar rate.
How effective would this policy be?
A study released in 2014 by Regional Economic Models Inc. (REMI) examined the proposal to determine its environmental and economic impact over a 20-year period. The REMI study found that after 20 years, the policy would cut CO2 emissions by half. In a finding that shatters the myth that carbon pricing would destroy the economy, the study showed that Carbon Fee and Dividend would add 2.8 million jobs, primarily because of increased spending in labor-intensive industries as a result of the dividend.
Because it employs market forces rather than regulations to accomplish its objectives, Carbon Fee and Dividend enjoys a great deal of support from conservatives. In fact, a group of Republicans who came together to form the Climate Leadership Council released a similar plan in February. Their proposal, The Conservative Case for Carbon Dividends, starts at a higher price – $40 per ton of CO2 – but increases at a slower rate. Republican elder statesmen promoting this policy include George Shultz, former secretary of state under Ronald Reagan; James Baker, former secretary of state under George H.W. Bush; and Henry Paulson, former Treasury Secretary under George W. Bush.
Hopeful signs in Congress
What are the chances that Congress will act? The odds are much better than most people realize.
Early in 2016, Florida Republican Rep. Carlos Curbelo and Democratic Rep. Ted Deutch formed the bipartisan Climate Solutions Caucus in the House. The caucus, now with 34 members, has equal numbers from both sides of the aisle. It creates a space free of partisan rancor where Democrats and Republicans can come together to listen to one another, share ideas, and find common ground for effective solutions to climate change. Many Republicans in Congress understand the risks inherent in a changing climate, and they want to take action. Encouraged by their constituents, more and more are joining the Climate Solutions Caucus.
Last month, 17 Republicans in the House, led by Elise Stefanik of New York, Ryan Costello of Pennsylvania, and Curbelo, introduced a resolution calling on the House to commit to “working constructively, using our tradition of American ingenuity, innovation, and exceptionalism, to create and support economically viable, and broadly supported private and public solutions to study and address the causes and effects of measured changes to our global and regional climates, including mitigation efforts and efforts to balance human activities that have been found to have an impact.”
Climate Solutions Caucus co-chair Curbelo has emerged as a true leader among Republicans on the climate issue. When EPA Administrator Scott Pruitt cast doubt on the link between climate change and CO2 emissions, Curbelo issued a statement calling Pruitt’s comments “reckless and unacceptable.” Curbelo also wrote a letter to Secretary of State Rex Tillerson urging the administration to remain in the Paris climate agreement.
On the day Trump signed his executive order to roll back climate rules, Curbelo issued a critical statement:
“…today’s rollback of emission standards is misguided. Climate change is occurring and it is not a coincidence global temperatures have risen at the same time tremendous amounts of carbon dioxide have been added to the atmosphere. We see the effects of climate change firsthand in South Florida, resulting in rising sea-levels, bleached coral reefs, and salt water intrusion. Climate change is also a threat to our national security and local economies across the country. We cannot, and must not, ignore these challenges.
“I continue to believe economic growth and dealing with this threat are not mutually exclusive… Weak environmental policies ultimately lead to the destruction of jobs and quality of life. I hope the Administration will work with me and my colleagues in the Climate Solutions Caucus to Act on this in a responsible, bipartisan way going forward, but today that is clearly not the case.”
While GOP members of the Climate Solutions Caucus have not yet backed a revenue-neutral carbon fee, with enough support in their districts from constituents, community leaders and local newspapers, Republicans in the caucus could be persuaded to sign on.
This Earth Day, as we take stock of the state of our world and the steps needed to preserve a hospitable climate, Americans should be alarmed by the callous disregard the current administration has toward the threat of global warming. Fortunately, we have another branch of government that can correct Trump’s misguided policies. By enacting a fee on carbon with revenue returned to households, Congress can avert disaster, create jobs, and reassert U.S. leadership on the greatest challenge humanity has ever faced.