For a win on climate, let’s put our best player in the game
In the game of climate action, a price on carbon is one of the strongest players on the team. And by all accounts, 2021 looks like the championship game for climate policy. President Biden has made the issue a central priority, including in his new infrastructure plan, and Congress is going for a win.
This week, representatives in the House introduced a major climate bill to call their strongest player off the bench. It’s a bill called the Energy Innovation and Carbon Dividend Act (H.R. 2307), which would put a steadily rising price or fee on carbon in order to get America to net zero emissions by 2050. The bill would put that carbon fee revenue right into Americans’ pockets as a monthly carbon dividend or “carbon cash back” payment. Led by Rep. Ted Deutch of Florida, the bill has 28 co-sponsors — more than two dozen other members of Congress who recognize the effectiveness of this approach.
This legislation comes on the heels of a wave of carbon pricing endorsements from inside and outside of Congress. In the Senate, Majority Whip Dick Durbin (D-Ill.) introduced his own carbon tax and dividend bill just a few weeks ago. In February, Republican Sen. Mitt Romney voiced his openness to a “carbon tax, carbon dividend” policy. The latest polling shows that Americans of every political stripe like this approach to reducing emissions, with majority support in both very red and very blue districts.
Major business groups, like the U.S. Chamber of Commerce and the Business Roundtable, have also expressed support for a market-based approach to emissions reductions like a carbon price. The oil and gas industry has gone on record that if climate policy is moving forward, their preferred approach is a carbon price that will spur innovation. The just-introduced Energy Innovation and Carbon Dividend Act is the latest example of carbon pricing’s full court press.
Why is this policy approach the strongest player on the team? This particular bill will slash America’s carbon emissions 30 percent in just the first five years. But don’t take my word for it — listen to the experts. The scientists of the Intergovernmental Panel on Climate Change (IPCC) say that “explicit carbon pricing” is “a necessary condition of ambitious climate policies.” The National Academies of Sciences, Engineering and Medicine are also calling on Congress to implement a rising carbon price. Economists like Noah Kaufman, recently named senior economist at the White House Council of Economic Advisers, says “putting a price on carbon dioxide emissions is a no-brainer.”
Giving the carbon fee revenue to Americans as a monthly dividend or “carbon cash back” payment is another strength of this policy. With a regular carbon dividend, most low- and middle-income Americans will come out financially ahead or break even — a crucial feature of any policy this year, as people struggle to recover economically from the pandemic. This also aligns with President Biden’s commitment not to raise taxes on people earning under $400,000 per year. A carbon price like this doesn’t tax people to pay for the transition to a clean-energy economy — instead, it puts money in people’s pockets. Treasury Secretary Janet Yellen is a longtime proponent of the carbon dividend approach, reiterating during her confirmation hearing that she and President Biden are “fully supportive of effective carbon pricing.”
With all of that support from businesses, scientists, economists, and policymakers themselves, it only makes sense to call this player off the bench.
But even the best player can’t win a game alone. A solid team can make sure that player’s weak spots are covered and can add new strengths to the mix. The same is true on climate action: a carbon price is a strong, vital policy, and it plays well with others. By shifting the economic incentives away from fossil fuels and toward cleaner energy, a carbon price will make all of President Biden’s proposed infrastructure investments cleaner. For example, a carbon price will help ensure that investments to increase industrial efficiency and retrofit buildings go toward the cleanest technologies available.
We may not even be able to predict how much carbon pricing will advance all our efforts to reduce emissions. As Sen. Sheldon Whitehouse (D-R.I.) recently said, “If we do robust carbon pricing, it actually performs better than the models suggest, because you can’t predict innovation.” President Biden and members of Congress should include a carbon price alongside their other proposed policies to ensure that America makes the transition to a clean-energy economy as quickly and efficiently as possible.
With the Energy Innovation and Carbon Dividend Act, I’m encouraged to see Congress getting carbon pricing in the game. The championship trophy is a healthy, stable future for ourselves and future generations. Let’s win this thing.
Mark Reynolds is the executive director of Citizens’ Climate Lobby.