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To prevent further catastrophic changes in the world’s climate, greenhouse gas emissions have to be slashed in the decades ahead. How to do that? One of the most sensible options is to put a price on carbon, then refund the proceeds to consumers.
In an era of polarization, the idea is attracting broad political support. A proposal gaining momentum has backing from Republican luminaries (including James Baker and George Shultz), major industries (ExxonMobil and Ford) a former Federal Reserve chair (Janet Yellen) and key leaders in the fight against climate change (former Obama Energy Secretary Ernest Moniz and Christiana Figueres, an architect of the Paris climate accord).
If implemented next year, the plan would tax carbon at the source — such as refineries, mines and wells — at $43 a ton. It would immediately double the price of a ton of coal, tax natural gas at $2.28 per thousand cubic feet and increase gas prices by 38 cents a gallon. A family of four would get a $2,000 rebate to help offset increases in energy costs.
This approach would drive innovation without the burden of regulations, particularly on industrial polluters. Fee credits would also be granted for new ways of storing or reusing carbon. Because carbon polluters could no longer use the atmosphere as a free waste dump, the plan would make green energy alternatives more competitive with fossil fuels.
The tax would increase annually to ensure emission-reductions goals are met. If they’re not, the fee would escalate. To ensure that the United States isn’t the only nation realigning energy production, the proposal would set border fees — tariffs, actually — on imports produced by dirty energy.
The plan recognizes that a carbon tax won’t, by itself, prevent global warming. As a result, a Climate Leadership Council spokesman says, the proposal would not replace vehicle emission standards and appliance efficiency requirements. (This isn’t explicitly stated in the published plan, perhaps a reflection of how difficult it is for this broad-based group to strike a balance.)
Putting a price on carbon is an idea whose time might finally be arriving. Last year, a small group of House Republicans introduced a carbon tax measure that would start at about $40 a ton, with revenue earmarked for improving highways, climate adaptation and energy research.
Even a carbon tax wouldn’t address the need for federal investment in better ways for extracting the carbon accumulating in the atmosphere and lingering for centuries. That could include reforestation, improved carbon-capturing agricultural processes and technology for pulling greenhouse gases directly from the air.
International climate experts say the world must reduce carbon emissions dramatically within the next decade and reach net zero by midcentury. A carbon tax would be a vast improvement on the status quo, one far more likely to achieve political common ground than the most sweeping “Green New Deal” proposals.
If global emissions have finally peaked, it is only the end of the beginning of this climate crisis. The beginning of the end is yet to come.