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

Caldor Fire Brown Smoke - image, Jeff Sullivan, cc 2.0

Opinion

In mid-October, news broke that the central pillar of President Biden’s transformative climate plan was blocked from the Build Back Better budget reconciliation package. The Clean Energy Pricing Program (CEPP) would have made a substantial dent in the emissions from the electricity sector by rewarding utilities that switched to renewable energy and penalizing those that didn’t. Since the electricity sector is responsible for 25 percent of greenhouse gas emissions, dropping the CEPP is concerning for anyone who cares about solving the climate crisis. 

President Biden set a goal for the US to reduce greenhouse gas emissions by 50 percent by 2030. We must hold him, along with the Democrats, to that promise.

To move towards America’s ambitious emissions reduction goal, Congress is working hard to pass the budget reconciliation package and the bipartisan infrastructure legislation. These include important items: tax incentives for clean energy producers, funding for electric vehicle charging stations, funding to upgrade the nation’s electricity grid, and a price on methane. But it is not enough to hit the 50 percent goal.

Senate Majority Leader Schumer’s office released an analysis explaining the impact of each item. Even with the CEPP, we fall short of the 50 percent goal. Without the CEPP, we stumble. 

To make matters worse, a new United Nations study, reveals the US government is projecting that oil and gas production will increase over the next decade compared to 2019 levels. 

Falling short of the 50 percent emissions reduction goal is not acceptable. Adding a price on carbon would get us to our goal, ensuring that America meets the targets to prevent the worst impacts of global warming. The Senate is now 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 encouraging because a carbon price is “the most cost-effective lever to reduce carbon emissions at the scale and speed that is necessary,” according to economists.

The recent back-to-back climate disasters show that we cannot wait longer to take strong, meaningful action to slow climate change.  This summer, two wildfires crossed the Sierra Nevada summit into Nevada, something previously unheard of. The Dixie wildfire, the second largest in California history, sent wildfire smoke into Nevada for days on end, all the way to the east coast. It also burned nearly 70 percent of Mt. Lassen Volcanic National Park. When the water level in Lake Mead, the US’s largest reservoir, dropped to 35 percent of total capacity, the federal government officially declared a shortage, triggering major water cuts in Arizona and other western states, including Nevada. Record-shattering heat turned deadly in the Pacific Northwest. Unprecedented storms and flooding killed hundreds of people across the U.S. and the world. The message is clear: It’s time for action.

Nevadans’ are already paying the price of climate change. It’s time to fight back by investing in a decarbonized future.

​​We would like Sen. Cortez Masto, Sen. Rosen, and Rep. Amodei to ensure that a robust price on carbon is part of this package of policies. Senator Cortez Masto has a pivotal role on the Senate finance committee, which is currently crafting legislation to put a price on carbon into the Build Back Better budget reconciliation bill. She needs to know that Nevadans want carbon pricing!

Here in northern Nevada, a policy like this would mean reduced threat of wildfire, better air quality, and more stability for the wild open spaces in this place we love like Lake Tahoe and Mt. Rose. These benefits also strengthen our local economy. A new study shows that we could add $700 million to Nevada’s economy by working to achieve our greenhouse gas reduction targets.    

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. This tax is paid by the companies that pull coal, natural gas and oil out of the ground. Resources for the Future calculates that by 2030 this policy will reduce U.S. emissions more than 50 percent 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 doesn’t rely on new regulations, which could be overturned by the next administration or tied up in court for years. Also, it’s quick to set up, leading to meaningful impact with a year. 

Finally, it’s affordable. Some, or all, of the revenue could be paid as a dividend, or “carbon cash back” payment, to Americans. This protects 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 for 85 percent of American households. The poorest households benefit the most.

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. Although the Biden administration has floated a carbon border adjustment,  based on the World Trade Organization’s rules, it is unlikely that would fly without a U.S. price on carbon. If the U.S. does decide to move forward with a carbon price and carbon border adjustment, the policy could keep American businesses competitive. When the US and the EU both price carbon and have a carbon border tax, countries that want to stay competitive in these giant markets will have a strong motivation to follow our lead by pricing carbon. 

It’s clear that a robust price on carbon 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 Sen. Cortez Masto, Sen. Rosen, and Rep. Amodei, asking them to support a price on carbon. Please join us by calling your member of Congress.


Michelle Hamilton is co-group leader for the Reno/Sparks chapter of Citizens’ Climate Lobby. Mark Reynolds is Executive Director of Citizens’ Climate Lobby.


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