By Peter Rolnick, Iowa City; State Coordinator for Citizens’ Climate Lobby
We understand the challenges we face with the changing climate. We understand that we have to act quickly to make sure the world of our children and grandchildren is livable (business as usual, promising as it is on many fronts, will not be fast enough). We understand that this crisis is hitting marginalized communities especially hard, and will continue to do so.
We understand that we need an “all of the above” approach: solar and wind, ethanol and biofuels, tapping in to the wisdom of our farmers to store carbon in the ground, electric vehicles and charging infrastructure, redesign of the electrical grid, technological and manufacturing advances in the production of products like cement and steel.
We know that this transition must be done in a way that actually supports those who will otherwise be, initially, hurt by these changes: workers in the fossil fuel industry, farmers dependent on gas and diesel who don’t have the cash on hand to transition immediately to more sustainable methods, those in the middle and lower income brackets who can’t afford to put solar panels on their houses or buy an electric car, those who are renting who have to pay the utility bills even if the landlord has not adopted sustainable practices.
Lastly, we know that the U.S. can’t address this problem alone; though the U.S. is a major emitter of greenhouse gases, China is the largest contributor, and the EU, India and Russia make major contributions.
What many of us don’t know is that there is one simple first step that can get us moving immediately on the path to being carbon-neutral (that is, making no net contributions to greenhouse gases in the atmosphere), a step that will be more effective than any other single policy or regulation. That one step, if properly designed, can be used as a lever for getting other countries to step up and do their part. That one step, if designed correctly, can actually put extra money into the pockets of middle- and low-income families. How much would this step cost the federal budget? Zero!
That simple first step is carbon pricing. That is, putting a fee on greenhouse gas emissions at the source (the well-head or the port) that rises each year. The increased costs of goods and services will then be passed on to consumers, putting pressure on consumers, industry and investors to buy, manufacture and invest in ways that reduce greenhouse gas emissions.
If all or most of the fees collected are returned to consumers in a monthly dividend check, models show that households with middle and low incomes will actually receive more in dividends than the extra they will have to pay for the increased costs of goods and services due to the fee. And this would still be true if some of the fees were redirected to, for example, help retrain coal miners or assist farmers who are unable to pass their increased costs on to the consumer.
If this carbon price includes a so-called border correction (which means that goods from countries that do not have an equivalent carbon price have added tariffs) we will be pressuring other countries to do their part. The EU already has carbon pricing and plans to put a border correction in place in 2023. If the U.S. doesn’t do this also our industry, much of which is already cleaner than many of our trading partners, will suffer.
Because the carbon price would be charged at the source (economists call this “upstream”) it would put pressure on all sources of greenhouse gas emissions. What better way to move us down the all-of-the-above pathway to carbon neutrality?
A number of carbon pricing bills have been introduced in Congress, and carbon pricing is currently being discussed as part of the budget reconciliation bill. Call or email Senators Ernst and Grassley, Representative Miller-Meeks and President Biden and let them know you want to see legislation pricing carbon with a border correction to keep U.S. industry competitive, and to make sure our children and grandchildren live in world where they can thrive.
And, as Eric Johnson, co-leader of Iowa City Climate Advocates, has pointed out, cost of the Build Back Better Bill without carbon pricing: $3.5 trillion; cost of the Build Back Better Bill with carbon pricing: $3.5 trillion!