The Tide is Turning for Carbon Pricing

Momentum is building: New bills have been introduced, new endorsements made. Now is the time to add your voice as a business leader to the growing chorus of support for federal carbon fee and dividend legislation.

Exponential Momentum!

  • H.R. 763 now has 62 co-sponsors, more than any carbon pricing bill, ever! In July, Karen Bass (D-CA-37), Chair of the Congressional Black Caucus, and several other members of that caucus became co-sponsors of the bill.

  • In July, The U.S. Conference of Mayors urged Congress to Pass Carbon Pricing Legislation. Republican as well as Democratic mayors voted for this resolution.

  • Also in July, Four New Carbon Pricing Bills Were Introduced in Congress. Three of these bills were introduced by legislators who are also original sponsors of the Energy Innovation Act. These new bills bring important new ideas into the policy discussion, including using tax revenue to reduce payroll taxes, helping low-income households with energy costs, and funding low-carbon energy R&D. This will inspire a richer national discussion on the best way to price carbon, and increase the likelihood of action by this Congress. Our summary of these bills is here. A comparison, including emission reductions, is here.

Time Magazine gave carbon taxes and Citizens’ Climate Lobby a great shout out in July.

Public Support for HR 763 as of September 16, 2019

57 municipal resolutions and municipal endorsements for the Energy Innovation Act.

130 municipal resolutions endorsing carbon fee & dividend policies (including Chicago, Dallas, etc.).

Over 1,000 statements of support and endorsements gathered in support of the Energy Innovation Act including prominent Business Groups, Non-Profit Organizations, Faith Groups, and Individuals.

TAKE ACTION: Three ways you can help

  1. Make an online endorsement of CCL’s bill: the Energy Innovation and Carbon Dividend Act, H.R.763.

  2. Email or call your Senators and Representative, tell them about your support for federal carbon pricing as a critical step in addressing the climate crisis.

  3. Write an article for a newspaper, magazine, or journal. As an example, here’s a 9/15/19 Forbes article from the CEO of SynBioBeta.

We are here to work with you to help you and your business move forward on advocacy. Write to us at info@businessclimateleaders.org.

BCL Talking Climate and Carbon at the Green Sports Alliance Summit this Summer

by Business Climate Leaders

Business Climate Leaders is heading to the annual Green Sports Alliance Summit at Lincoln Financial Field in Philadelphia in June as part of our sports industry outreach.  

GSA summit.jpg

On June 19, BCL’s Director of Engagement Steve Hams, and BCL Sports Sector team co-lead Lew Blaustein, the founder of the GreenSportsBlog, will be on the Sports, Carbon & Climate panel discussing how the sports sector will benefit from carbon pricing proposals under consideration at the federal and state levels.

“We’re honored and excited to be a part of the summit,” Hams said. “We have tremendous respect for the high level of operational sustainability achieved by the Green Sports Alliance and by its members, and for the awareness they have brought to fans and stakeholders regarding the increasing effects of climate change on the sports industry.”

The summit is considered the largest and most influential gathering for the sports community to unite around sustainability. The event brings together hundreds of industry stakeholders to learn and share better practices and the latest innovations in greening operations, advancing the supply chain and engaging fans.

The panel will discuss how the sports world is currently working to combat the carbon emissions crisis and what the sports greening movement can do to accelerate the pace of climate action and effectively engage in the global transition to a clean energy economy. The other panelists are David Antonioli, CEO of sustainability standards company Verra, Aileen McManamon, founder and managing partner of 5T Sports, and Kevin Wilhelm, CEO of Sustainable Business Consulting.

“Our goal will be to offer sports industry leaders opportunities to partner with BCL in advocating for effective legislative solutions to address climate change,” Hams said. “In particular we will explain how national carbon pricing legislation can benefit the sports sector, and how we can bring the super-sized influence of sports to make it a reality.”

Founded in 2010, Green Sports Alliance is an environmentally-focused trade group comprised of nearly 600 member organizations that represent teams, leagues, athletes and venues in 14 countries.  

The Story of Beer, Climate and Advocacy:  Brewers Declare for Carbon Pricing

by Randy Salim, BCL Food & Beverage Sector Leader

Andy Tveekrem is a long-time brewmaster and the co-founder of Market Garden Brewery in Cleveland, Ohio.  In April, Andy was BCL’s guest speaker for a special webinar to talk about the effects of climate change on the brewery industry and why he signed on to support the Energy Innovation and Carbon Dividend Act.

Andy Tveekrem

Andy Tveekrem

Brewmaster Andy shared several stories about the impact of climate events on his industry, including how the recent drought in Europe had not only led to a poor barley harvest--high protein levels that are not ideal for beer--but had also caused the canal and river levels to drop.  These conditions caused a ”double whammy -- a poor quality harvest and the inability to transport it economically.”

Andy also spoke about his trip to the hop harvest in Yakima Valley, Washington in September 2017, when he had witnessed the impact of six major wildfires which had inundated the region with bad air quality.  Andy noted, while the hops fields had been spared during the fires (a serious concern with the increasing number of days registering extreme temperatures), the hazardous air quality was difficult to bear for all in the area, especially hazardous for those working outdoors during the hops harvest.  

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Discussion also turned to the international beer industry as climate change is affecting the beer industry around the world.  Hops are a global commodity. Germany, California’s Yakima Valley region and New Zealand are some of the larger hops producers, with many other markets spreading out global supply.  Having widespread hops resources helps mitigate some of the “whipsaw effects,” so that when harvests are affected in one place, supplies are available elsewhere. But climate change impact has added more price pressure on hop and barley supply across the world, presenting supply chain disruptions.  For example, throughout 2007-2008, drought-induced hops failure in Australia resulted in Asian brewers seeking U.S. hops with “open wallets” and an ensuing market disruption.

Andy noted about these events, “It’s apparent to me that [climate] policies need to happen, and lobbying for change at the national level is one of those things. Most brewers I know are concerned about climate change but getting them to land on one key solution is the challenge.  We can all see that the political winds have shifted and more people are talking about it than ever before, but can we get something done?”

The main policy focus in the industry this year has been to renew the tax cut package for small brewers.  No one wants to “upset the apple cart” too much until that is renewed in perpetuity. This policy has helped grow U.S. breweries from just 80 brewers in 1980 to over 8,000 this year.  “Profitability drives sustainability. Brewers need to be in the black to make investments in eco friendly things.”

As to why he signed on to the Energy Innovation and Carbon Dividend Act, Andy explained, “I want to do something.  This seems like the most logical approach because of the dividend being kicked back to consumers versus it going to the government.”  And the beer industry is clearly subject to climate effects.

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Andy’s solution?  Get more brewers to take action. “Bring up climate and talk to brewers about it.  Brewers are very interactive with the public. If you are visiting your local tap room strike up a conversation. The more people hear climate stories bubbling-up from the ground level, the more they will be inclined to do something about it.  It would be really helpful to have a business case studies outlining the impact on the bottom line of a carbon price--and the benefits to our industry. That would help a lot.”

To join the BCL/CCL BrewTeam email us at brewteam@citizensclimate.org and support the Brewers Climate Declaration!

A New Phase of Advocacy in the Outdoor Industry

by Bill Barron, BCL Outdoor Industry Sector Leader
March 20, 2019

With the introduction of a bipartisan climate solution in Congress we’ve stepped into the next phase of outreach in the Outdoor Industry Sector.

There’s no question that this industry can play a critical role in climate advocacy. The outdoor recreation industry contributes $887 billion annually to the U. S. economy and more than 150 million Americans participate in outdoor activities each year. 

The Energy Innovation and Carbon Dividend Act of 2019 (H.R. 763) has enabled us to turn support for Climate Action, Carbon Fee and Dividend and the Carbon Pricing Principles into endorsements for the legislation. This approach has led to 33 endorsements for the bill by trade associations, ski resorts and businesses as well as from 21 individuals, including Olympic gold medalists and Alex Honnold, the young man who scaled Yosemite’s El Capitan without ropes or harnesses and was featured in National Geographic’s Free Solo documentary.

Alex Honnold takes on El Capitan. From the documentary  Free Solo  ©2018.

Alex Honnold takes on El Capitan. From the documentary Free Solo ©2018.

We track these endorsements and quotes so that they can be used as a resource to secure more support. 

But there are other opportunities to engage beyond an endorsement. One of those is the upcoming National Ski Area Association’s national convention in late April in San Diego. Citizens’ Climate Lobby Executive Director Mark Reynolds will be a panelist in their Climate Change Solutions session.  During the conference, I and my Outdoor Industry Sector co-lead Matt Tucker will staff an information booth provided by the NSAA to field questions and network with those in the industry.

Interested in getting involved? Join us on our monthly sector call on the fourth Monday of every month at 5 p.m. Pacific Time (8 p.m. ET). Zoom in at https://citizensclimate.zoom.us/j/653379712 or by phone: +1 408 638 0968 (US Toll) or +1 646 558 8656 (US Toll) Meeting ID: 653 379 712.

Helping High-Tech Titans Shape Federal Climate Policy

by Business Climate Leaders

The high-tech industry is a powerful driver of economic growth.  Whether a business is in the retail, healthcare, banking or other sector, technology innovations likely help that business run more effectively and reduce costs.  The high-tech industry has the potential to also be a powerful driver for climate solutions.

That’s why members of Business Climate Leaders were excited to meet with more than a dozen titans of the high-tech industry in October in Silicon Valley to explore carbon pricing policies and to  discuss the potential for joint advocacy for carbon pricing legislation.

Many businesses want market-friendly climate action

Business Climate Leaders (BCL) is a Citizens’ Climate Lobby (CCL) action team.  BCL engages large businesses at a sector and national level to get collective endorsements and lobbying support for carbon pricing legislation.  BCL also helps CCL chapters with outreach to local small- and mid-sized businesses.

“Companies worry about climate change. They know it will destabilize the economic environment and disrupt supply chains,” explains Steve Hams, BCL Engagement Director and chapter co-lead for Silicon Valley North.  “Businesses thrive on stability,” he continues. “They want to understand what the future holds so they can plan with confidence.  And a predictable, steadily rising price on carbon is climate policy that fills that need.”

Congress cares about the concerns of businesses

Politicians listen to business leaders because businesses provide jobs, pay tax revenue and contribute to political campaigns.

“Business people are also powerful problem solvers,” Hams notes. “When a business brings a concern to a member of Congress, the legislator knows the company has thought long and hard about the issue being discussed.”

Hams adds, “Legislators realize that high-tech is a leading-edge industry that drives economic growth and job creation.  The concerns of the high-tech industry have significant impact with Congress.

Organizing the convening

With business momentum for climate action growing, Hams surmises that the collective voice of high-tech leaders can have greater impact on Congress than individual company voices.

Hams was able to team with a senior executive of a leading Silicon Valley industry group to co-sponsor the meeting and invite major tech companies to participate.  “The partnership with the industry group was critical.  Most of the invitees belong to their group, so their involvement added significant legitimacy to the event.”

BCL and its co-sponsor were able to leverage existing relationships to secure the participation of a core group of major companies, with one of them agreeing to host the meeting at their facility.  After that, many other companies wanted a seat at the table.

The convening

The BCL team had an inspiring meeting with sustainability and government relations leaders from the 13 participating companies.   

At the October event, each participant shared his or her company’s impressive actions to date regarding sustainability, climate, clean energy and priorities for future action.  The companies saw the transition to a clean energy economy as a great opportunity to innovate.  And, internally, as an opportunity to reduce operational costs and stabilize energy portfolios.

Next, the group had an interactive, in-depth discussion about the legislative landscape and different carbon pricing policies.  They shared insights and raised key questions, particularly about CCL’s Carbon Fee and Dividend (CF&D) solution and how it compares with other carbon fee proposals.

Hams reveals, “After the meeting, one participant told me his CEO already decided to publicly endorse CF&D.  We hope the leadership of this visionary company will encourage other companies to follow suit.”

Lastly, the group explored joint advocacy alternatives and agreed upon next steps to organize collective efforts.  The group identified three key steps required for their companies to participate in collective advocacy:

  • Develop and present a clear and compelling joint advocacy position.

  • Demonstrate internally why advocacy would be good for the business and its reputation.

  • Convin ce company leaders to designate this as an “actionable priority.”

Next steps

Technology innovation helped make America one of the greatest nations on Earth. Together, these high-tech titans can influence federal climate policy and help make America a leader in solving climate change. The group will meet again in April of 2018. 

In the meantime, BCL and its industry group partner will continue to pursue pathways for successful joint advocacy.  And the high-tech participants will hold internal discussions with their respective company’s leaders to build momentum.  Stay tuned for more progress!

 

Take the Hill: The Political Science of Energy Economics

by Bruce Hagen, Director, BCL Clean Energy Business Engagement and GO Team Programs at Citizens’ Climate Lobby

Here on earth, gravity rules. Its invisible hand governs the movement of every mass.  Struggle uphill. Glide downhill.  On the battlefield or the playing field, it’s good to have gravity on your side.

Energy economics is no exception.  Remember the labyrinth game, where you turn the knobs to tilt the board and guide the shiny little ball to the goal?  Energy politics is like that. The economic playing field is politically tilted in favor of fossil fuels.  Direct subsidies, tax breaks, and a free pass to use the sky for waste disposal has enabled oil, coal, and gas to create great economic power for America.  And the fossil fuel industry converted some of their great economic power into political power, to keep a tight grip on the knobs, and the energy playing field tilted in their favor.

This monopoly was okay as long as fossil fuels remained cheaper, and cleaner, and safer than alternatives.  But they haven’t.  Despite advances in scrubbing soot and smog from smokestacks and tailpipes, air pollution still attacks lungs.  Strip mines poison streams.  And now greenhouse gasses threaten the foundations of our economy if not our planet.

Fossil fuels remain popular because the downstream pollution costs aren’t reflected in the price of products that cause greenhouse gas emissions, and people gravitate toward products with lower prices.  But poor Baby Downstream ends up paying for Ol’ Man Upstream’s free lunch.  Meanwhile, on our tilted playing field, the blue-green ball we call Earth races toward the hole.

Low-emissions alternatives struggle against this tilted economic gravity, which makes their comparable products look more expensive. Unable to touch the nobs, clean energy advocates have built little ramps --subsidies, mandates, and moral suasion-- to counter the tilt.  The ramps work where applied: they have helped clean energy prove its capacity to painlessly replace fossil fuels.  But the ramps are inefficient and unstable.  For example, tax credits have “free riders” who take credit for purchases they would have done without the credits. And subsidies are easy targets for legislators looking to cut a budget.  With this unpredictability, investors lose confidence, overcorrect, and plunk!  Another promising technology down the hole.

Most important, these little ramps are not enough. The little ball --our powered planet– still accelerates downward. It’s time to take control of the knobs of power.

We’re  starting with a laser-focus on the fastest and safest way to level the field: put a price on climate pollution with a bipartisan Carbon Fee and Dividend law.  CFD levies a steadily increasing fee on fossil fuel extraction and imports that returns all net revenues to households via monthly per capita dividends.  An econometric study by the prestigious, nonpartisan Regional Economic Modeling, Inc projected that, in twenty years, CFD would cut greenhouse gas emissions to half of 1990 levels, while creating a net 2.6 million increase in jobs.

To enact CFD, we’re recruiting, training and inspiring a non-partisan movement of citizen volunteers to be more powerful than the fossil fuel lobby.  This is Citizens’ Climate Lobby.  CCL’s secret weapon: building productive working relationships with every Member of Congress, their staff, and their community leaders.  Most importantly, we form these relationships based on appreciation and respect, even for those who disagree with us.  This strategy has led to the formation of the House Bipartisan Climate Solutions Caucus, which requires members to join in bipartisan pairs.  Membership is up to 56, and Caucus member votes have already defeated a Republican anti-climate amendment.

Our nonpartisan trend has advanced to the point where several oil companies, including ExxonMobil, Shell, and BP, have announced support for CFD through the Climate Leadership Council, a business-oriented conservative group.  Their hands can help steer toward a healthy climate.

We can take control of Capitol Hill and restore enough nonpartisan democracy to solve humanity’s most profound crisis.  Once we do that, anything will be possible.

Corporations Unite to Support Carbon Tax: How Does It Stack Up?

by Harold Hedelman, Co-founder and Director of Engagement, Business Climate Leaders

BP, Exxon, GM, Johnson & Johnson, Procter & Gamble, PepsiCo, Santander, Schneider Electric, Shell, Total S.A., and Unilever.

What, you ask, has brought these companies together at just this moment? Clearly, they all recognize the need for the US to join the rest of the world in addressing climate change. But the the most likely proximal cause is President Trump’s withdrawal from the Paris Agreement, which has catalyzed a massive groundswell of voices at every level pushing for effective action on climate change. 

And so, on June 20, eleven major corporations joined together as Founding Corporate Members of the Climate Leadership Council to support its carbon tax proposal

The Council’s plan is quite similar to a proposal from the Citizens’ Climate Lobby (CCL). Both plans call for:

  1. A gradually rising and revenue-neutral carbon tax;

  2. Carbon dividend payments to all Americans, funded by 100% of the revenue;

  3. Border adjustments to level the playing field for American businesses.

The CLC plan includes two additional features:

  1. The elimination of regulations that are no longer necessary upon the enactment of a rising carbon tax whose longevity is secured by the popularity of dividends. Much of the EPA’s regulatory authority over carbon dioxide emissions would be phased out, including an outright repeal of the Clean Power Plan.

  2. A n end to federal and state tort liability for emitters.

Although not directly necessary to reduce US GHG emissions, these business-friendly features clearly encourage the support of carbon taxation by fossil fuel companies.

Looking beyond their high level similarities, the following compares fundamental details of the two proposals. CCL's stats appear first:

Initial price per ton CO2e: $15.00 / $40.00

Annual increase per ton: $10.00 / 2% above inflation

Fee after 20 years (2017$): $205.00 / $59.44

Use of revenue: Return to households / Return to households

GHG’s covered: Many, including methane / Only CO2

Border adjustments: Yes / Yes

Impact on existing regulation: None / Rollbacks on GHG regulations

Tort liability immunity: None / Yes

Both proposals embody conservative principles of free markets and limited government. Both offer an equitable, popular and politically viable way forward, paving the way for a much-needed bipartisan climate breakthrough.

Unlike any other country in the world, climate change is highly politicized in the US. It is therefore very encouraging to see major Republican and corporate support for simple, market-based solutions that will encourage significant reductions in US GHG emissions. The leadership shown by these eleven companies sends a signal to other business leaders that they should seriously consider following suit.

Read about Citizens' Climate Lobby and its proposal here.

Authors Harold Hedelman and Sarah Macgregor are volunteers with CCL.

Healthy Climate News: Seven Technologies That Could Scale

by Peter Fiekowsky, physicist, business owner, member of Business Climate Leaders, and head of Citizens' Climate Lobby's 100-Year Plan

Last month I spent a delightful day at the Carbon Dioxide Removal / Negative Emissions Technology workshop at Berkeley, put on by Wil Burns, one of our original members. He had a crowd of 130 people there from all over the country, with presentations on various technologies for carbon dioxide removal (CDR).

The key take-aways were that we have lots of options now for CDR that can scale up to 50 GT / year, at a cost of less than 1% of global GDP.

Can your technology scale up to remove 50 GT CO2 / year?

  1. DAC- Global Thermostat, Inc. (Menlo Park): Yes

  2. DAC-Carbon Engineering, Inc. (Vancouver): Yes

  3. DAC-CDR trees (Ariz. State Univ): Yes

  4. Marine Permaculture Arrays (Brian von Herzen): Yes

  5. Ocean Alkalinization (Santa Cruz): Yes

  6. Ocean Iron Fertilization: Yes

  7. OTEC (Alan Miller): Yes

We spent the morning of the conference looking into BECCS (Bio-Energy and Carbon Capture and Sequestration). This is an area of CDR which is receiving a lot of attention in the last few years. Getting energy from biological sources, such a corn, switchgrass, sugar cane, and even trees has obvious appeal. In fact almost half of the US corn crop is now used for this purpose, growing corn for ethanol used to replace some usage of gasoline.

With all that positive attention, the downside of BECCS is that it cannot scale beyond about 2 GT CO2 / year—just 5% of what we need. In addition, achieving even that CDR potential requires giving up large areas of agricultural area to energy production—potentially at the cost of growing food for the world’s expanding population. The fundamental reason for the limitation is that plants are at best 1/100 as efficient, per acre, at producing energy as are solar panels. And solar panels don’t require water, fertilizer, planting, and harvesting.

Another popular technology, biochar got an excellent mention from Brian von Herzen (one of the Healthy Climate founders). Biochar, like BECCS has great potential in certain situations, especially for reducing pollution by shifting the burning of rice chaff from in the fields, to biochar ovens which are clean, produce energy, and then provide biochar (sort of like charcoal) which is used as a very effective soil enhancer. Biochar doesn’t make it on the list above because its global potential is about 1 GT / year of CO2.

In summary, we have seven excellent candidates for doing CDR at scale. Yet the two CDR technologies now getting the most public attention, BECCS and Biochar, are valuable and attractive, but simply don’t scale, mainly because they are limited to the amount of the earth’s surface area that we’d be willing and capable of committing to that purpose.

We are making great progress—just in the last month!

Our Tendency NOT to Act on Climate Change

by Jim Tolbert, Member, Business Climate Leaders

Originally appeared in LinkedIn

Climate models have uncertainty, and when you link these to economic models, the uncertainty only increases.  Some people have argued that we should wait until we are sure about our future projections before we implement policies to shift away from fossil fuels and carbon dioxide emissions.  This is like driving 80 mph through downtown, while speeding up and arguing that I believe there is uncertainty in my estimate that I will get hurt if my car hits another car, so I think I will wait a bit to touch the brakes until I can be absolutely certain I would get hurt if I didn't slow down - because I don't want to be late for my appointment.

Economist William Nordhaus has constantly contributed sound analysis to the discussion on climate change, challenging the discount rate used in the Stern Review.  And he continues his contribution in a December 2016 Working Paper,  "Projections and Uncertainties about Climate Change in an Era of Minimal Climate Policies."  The reality is that most nations have postponed taking truly transformational policies to shift away from fossil fuels, and now the window for action has decreased and this causes the required policies to be more aggressive.

From Dr. Nordhaus' conclusion, "It is worth emphasizing one further point about the impact of uncertainty on policy.  The future is highly uncertain for virtually all variables, particularly economic variables such as future emissions, damages, and the social cost of carbon.  It might be tempting to conclude that nations should wait until the uncertainties are resolved, or at least until the fog has lifted a little.  The present study finds the opposite result."

The time to act is now.

How Could Trump Spend a $1.2T Climate Dividend?

by Harold Hedelman, Co-Founder and Director of Engagement, Business Climate Leaders

Originally appeared in LinkedIn

Each episode of the 1950s TV series, "The Millionaire," follows the life of an everyday citizen who receives an anonymous $1,000,000 gift.  As kids, we watched and asked each other,"what would you do?"  It was fun speculating how to spend the money.

I'm reminded of this as my colleagues and I ask businesses to engage in the federal carbon pricing debate and explain that in addition to catalyzing innovation and a clean energy economy, an effective price on carbon will generate a LOT of revenue.  Business leaders pay attention to this because they know that if they’re not at the table, they’ll be on the table and while economists agree that a carbon tax is the most economically efficient way to reduce CO2 emissions, there’s little agreement on what to do with the revenue.

If you think a Trump carbon tax is a pipe dream, consider some of his advisors and likely cabinet appointees.  Rex Tillerson first praised a revenue neutral carbon tax years ago[i] and is the front runner for Secretary of State.  Then there are those three Goldman Sachs executives. Goldman Sachs was one of 13 companies that were charter signatories of the Obama Administration’s American Business Act on Climate Pledge.  One of Trump’s economic advisors, Art Laffer, advised Ronald Reagan, and is also pro-carbon tax.  Then there’s Ivanka.  In this context, and with Paul Ryan itching to enact tax reform, the time is ripe for a national carbon tax.

Assume a bill passes in 2017 and takes effect in 2018.  A carbon tax of $10/ton, increasing $10/ton/year would generate 1.2 trillion dollars over the next seven years (see the figure) by the end of a two-term Trump presidency.[ii]  That’s HUUUGE!

The $1.2T "Climate Dividend" would be 32% of the 2015 $3.8T US Federal Budget; it would dwarf the Cold War "Peace Dividend," which Newsweek estimated at $260B [iii].

Before passage, as the legislation winds its way through the sausage-making halls of Congress, the feeding frenzy may be as crazy as the 2016 Presidential campaign.  Everyone will clamor for a share, and coming to agreement will be difficult.  

In the following, I’ve emphasized three keywords to point out that in principle a good carbon tax needs to be effective in reducing emissions, economically efficient, and equitable in including measures to reduce or eliminate hardships caused by the tax.

Efficiency

There are two main ways to price carbon:

  • Put a cap on emissions and create a market for buying and selling permits to create CO2 pollution.

  • A dd a tax to the price of fossil fuels. This is like the familiar gas tax

A tax levied on all fuels is more efficient for at least a couple of reasons.  First, it avoids the inefficiencies of creating and running a market.  Second, it captures more emissions throughout the entire economy. A cap can only effect the price of products created by those large entities who purchase permits to pollute.

Whether a cap or a tax is used to reduce emissions, legislators will struggle to agree on what to do with the revenue. A key concept they will discuss is Revenue Neutrality.  To be neutral, the government can’t use the revenue.  Generally, revenue neutrality is favored by Republicans who don’t want to see government grow, and less favored by Democrats who prefer investing the revenue. There are many flavors of neutrality.  Here’s a vanilla version: Give it all back!

Give It All Back!

In this scenario, all revenue from the carbon tax sketched above is rebated to American households. Such a proposal was studied by Regional Economic Modeling, Inc.  The study, commissioned by Citizens' Climate Lobby, shows that in year 10, a family of four would receive almost $300/month. That’s good because a carbon tax will raise prices and be otherwise regressive.  Estimating that over 50% of households would receive more from the rebate than they would spend due to higher prices, the study shows one way a carbon tax can be Equitable.  Another way to address regressivity—perhaps less comprehensively— is a tax swap.

Do A Tax Swap

A carbon tax might be built into a larger, revenue neutral tax bill that would reduce other taxes, exactly offsetting the carbon tax revenues.  Mentioned most often are personal, payroll, and corporate taxes.

Reduce The Debt

Another possible use of revenue is reducing our national debt.  While it’s not revenue neutral, this appeals to everyone who wants to reduce the debt. 

Sound like Xmas?  Maybe it’s time to write your wish list.

The Wishlist

Other non-neutral uses of carbon tax revenues include:

  • Job training for the discarded workers of globalization and a dying coal industry

  • Investments in communities who have suffered fossil fuel related environmental degradations

  • Climate change adaptation, e.g., helping America’s coastlines adapt to rising sea levels

  • CO2 removal and carbon sequestration

  • Funding c lean energy technology innovation and infrastructure.

But infrastructure deserves more than just one word…

Infrastructure

During their campaigns, Clinton and Trump proposed massive investment in infrastructure.  While Clinton had a proposal to pay for her plan, Trump did not.  A Climate Dividend might be just the ticket.

In fact, a lot of Making America Great Again won’t be cheap.  Think of the Climate Dividend as a way for Trump to address some of the maladies he trumpeted and vowed to fix.  Here’s a homebrew remedy for three of them:

  • 1/3 to households. Remember those angry jobless blue collar workers? Let’s send equalized monthly checks to every household as in the Citizens’ Climate Lobby proposal[iv]. Monthly checks will remind people of who to thank and prevent eventual repeal of the tax, which is what happened to Australia’s carbon tax as the result of backlash against rising costs.

  • 1/3 to infrastructure. This will create blue collar jobs, and— if it includes creating a smart grid— a smoother transition to a clean energy economy.

  • 1/3 to r educe the national debt, corporate, personal, and payroll taxes.

Imagine a Trumpian fireside chat kindling speculations around every hearth.  How would you spend the Climate Dividend?  Business leaders will want tax cuts.  Clean energy advocates will want green infrastructure investment.  Blue collar families will remember that Trump need not use the Climate Dividend to pay for walls in the desert because Mexico will pick up that tab.

Our hypothetical carbon tax would reduce US CO2 emissions to 50% below 1990 levels in 20 years, well beyond our COP21 commitment.  How supremely ironic that Trump—who proclaimed and then disclaimed his belief that climate change was a Chinese hoax— could become a mega-climate hero while using his Climate Dividend to pay for campaign promises!

For a reality show celebrity like The Donald, remaking the Millionaire and casting himself as the benefactor who funds making America Great Again just might appeal to his sense of career continuity and presidential legacy. A carbon tax might be just the beginning…

For more about the carbon tax proposal sketched above and its economic effects, see this summary of the REMI study[v].

If you’d like to work with me and others to encourage Congress to enact a price on carbon, look into Business Climate Leaders[vi] as well as Citizens’ Climate Lobby[vii].

For more in depth discussion on general carbon pricing policy, see the World Resource Institute’s Carbon Pricing Handbook for Policy Makers (April_2015), an excellent survey of carbon pricing policy literature.

[i] https://youtu.be/Jb-9_rcMq7I

[ii] http://citizensclimatelobby.org/remi-report/

[iii] http://www.newsweek.com/peace-dividend-169570

[iv] http://www.citizensclimatelobby.org/

[v] http://businessclimateleaders.org/docs/REMI-Report-4-page-summary.pdf

[vi] http://www.businessclimateleaders.org

[vii] http://www.citizensclimatelobby.org

Coal Miner's Grandson

Bruce Hagen

Director, Clean Energy Business Engagement at Citizens' Climate Lobby-Business Client Leaders

Originally published by Enphase Energy in 2014, where Bruce worked as a Program Manager.

One evening, one hundred years ago, Anton Griglak stepped out of the elevator at West Leisenring #2.  He thanked God for another safe day in the mine.  Then he walked past the row of beehive coke ovens, across State Route 1051, and toward a row of company-built houses.  In one of those houses his family awaited him, and supper.

Anton had left the familiar of his faraway home to build a better life in the New World.  There were good jobs in coal country.  For two million centuries, time and tectonics transformed the steamy swamps of Pennsylvania into fat seams of concentrated sunlight.  Anton and his fellow miners blasted and shoveled that ancient energy into the engine of America.  Coal and oil powered the forces which twice pushed back the tide of global tyranny.  It built the foundations of prosperity that you and I still enjoy.

Anton didn’t know about atmospheric CO2.  He didn’t know that those smoking coke ovens were helping to push CO2 concentrations past 300 PPM on that chilly March night.  No one did.  When I learned about the “greenhouse effect” in college – and began my work supporting renewable energy – CO2 had reached 325.  It was already well past the “safe” level of 350 when my son entered the world.

In 2012 I was hired by Enphase.  CO2 had crossed 400 PPM frontier, breaking a three million year old record.  My son and I had travelled to Washington DC in June; we lobbied congress for carbon fee and dividend legislation on the same broiling day President Obama gave his climate address. Then, in August, I heard about Matt Reuscher, the coal miner turned solar installer… and it all came together.  The son of Grandpa Griglak’s daughter had grown up to be a foe of fossil fuels.  I was a “coal miner’s grandson.”

So, what would Grandpa Griglak think about my climate advocacy, my challenging the industry that provided food and shelter for his family (and, ultimately, me.)  Ingrate?  Hypocrite?  No, I think he’d see that fossil fuels are now things of the past.  They made it possible for renewable energy to power a modern industrial society… possible, and now because of their climate impact, necessary.  Perhaps he would recognize how his emigration to America is like America’s emigration to non-polluting energy. Stay with the familiar and stagnate, suffocate… or journey into a new world of promise and potential.

Matt Reuscher: from coal mine to sunshine

Matt Reuscher: from coal mine to sunshine

Matt Reuscher was a young coal miner in southern Illinois.  His job was killed by climate change – not from regulation, but from the drought that dried up the water needed to process coal.  He too emigrated, to St. Louis, where he got a job as a solar installer.  After reading about Matt’s journey (the full story is here), I reflected on how Matt’s story intersects with my own.  His family migrated from the mine to the rooftop – from coal to sol -- in a matter of months.  For me, that journey took two generations.  And you know what else?  Matt installs Enphase!

The future will belong to the people and the nations that recognize the potential of smart and simple solar energy.  Today, solar already employs nearly 80% more people than coal mining.  Solar jobs doubled from 2009 to 2011, to over 100,000.  As of November 2013, there were 142, 698 solar jobs. By comparison, coal mining jobs peaked at 91,698 in 2011, employed 88,962 in 2012, and are now down to 80,000.  With solar yet accounting for a small fraction of energy production, there is vast potential for growth in solar jobs – skilled work that can support a family in every community across this land.

You and Matt and I ride an unstoppable wave.  Sun energy, in one form or another, has always powered our planet, and always will.  When we create and use simple and safe solar products like the Enphase system, we open the door to all coal miners and their children to join the renewable recovery.

Working Without a Net

Bruce Hagen

DIRECTOR, CLEAN ENERGY BUSINESS ENGAGEMENT AT CITIZENS' CLIMATE LOBBY-BUSINESS CLIENT LEADERS

Originally published by Enphase Energy in 2013, where Bruce worked as a Program Manager.

Twelve years ago, on a bright November afternoon, workers threw the switch on Westridge Knolls Unit #1 in Petaluma, California.  The meter disc, surprised by this abrupt paradigm shift, ceased its lazy westward drift, and settled into a vigorous counter-spin.  For the first time, my home and my neighborhood felt the pulse of power from the sun.

“Watch your meter spin backwards,” the sales pitch appealed to anti-utility as well as environmental sentiments.  But I had worked for a utility in the energy-efficiency effort that helped California prosper while flattening power consumption.  I knew utilities were capable of being on the right side of the green power curve.

Net metering was then, and still is, a large variable in the incentive equation for going solar. And as more homes and businesses hook their arrays to the grid, utilities feel the bite in their business model as well as their system operations.  Mine was the first installation in a 100 home subdivision.  Today we have over a dozen, and solar canvassers are a common weekend sight on my street.  The drop in the bucket is now a splash, and in states like HawaiiCalifornia, and Arizona, it’s becoming a wave.

If the utilities’ challenge with net metering isn’t clear, here’s a “down-to-earth” analogy.  Mr. P-H used to buy all his potatoes from large chain grocer “MegaBites.”  They weren’t especially healthy or tasty, and they came with a big carbon footprint.  Now, Mr. P-H grows his own.  He stores enough yummy organic potatoes to supply his family over the whole year.

If Mr. P-H produces surplus ‘tates at the right price, everyone benefits when MegaBites buys the extras and sells them to his neighbors.  MegaBites becomes a potato broker.  But if too many neighbors do this, MegaBites is challenged to efficiently handle storage and distribution.  If MegaBites' price is regulated below their total cost for this brokering, they charge more to their non-growing customers to make up what they lose to the home-growers.  Or they go broke.  Neither scenario is sustainable, much less fair.

The analogy isn’t perfect.  Electricity is harder to store than potatoes, yet it can be moved quickly over great distances by a centralized control.  Utilities are heavily regulated, but not necessarily in ways that seem fair to the utilities or their customers, including the micro-generators.  Yet, in a fundamental way, spuds and sparks are the same: “cheap” conventional potatoes and power carry a cost that doesn’t show up on anyone’s grocery or utility bill – the impact on personal and global health.  Two-thirds of the electricity in America is fossil-based, generated at incalculable risk to the present and future inhabitants of our earth.  The push toward net-metering and other distributed generation incentives is in part an attempt to account for and balance these costs.  With full accountability, we can more readily invent and embrace the technology for making the leap to light-power.

The question that many of you smart people are working to answer is this:  what institutions and protocols will most quickly move us to this honest energy accounting, and how do we put them in place in time to save our climate?  The return to healthy food and power is not inevitable— there is no safety net protecting us from our collective ignorance.  But I think we are smart and compassionate enough to overcome these challenges… don’t you?

All this writing has made me hungry.  I’m going to microwave some of my Canella Russets, courtesy of Mr. Sol.