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

Our nation’s lawmakers are currently working on a package of spending measures and policies aimed at transforming America’s infrastructure and tackling climate change.

During an Earth Day summit with world leaders, President Biden committed the U.S. to reducing greenhouse gas emissions 50 to 52 percent by 2030 compared to 2005 levels. To achieve that goal, Biden has proposed spending hundreds of billions of dollars on electric vehicle charging stations, incentives for consumers to purchase EVs, retrofitting homes and businesses to be more energy efficient, and upgrading the nation’s energy grid to facilitate the transmission of renewable energy throughout the country. The proposal calls for a clean electricity standard mandating that all U.S. electricity be generated with non-fossil fuel sources by 2035.

We would like Reps. Thompson and Keller and Sens. Casey and Toomey to ensure that a robust price on carbon is part of this package of policies. Economists say carbon pricing is “the most cost-effective lever to reduce carbon emissions at the scale and speed that is necessary.”

Here are three key reasons why the U.S. should include carbon pricing in our strategy to address climate change:

First, it puts us on track to net-zero by 2050. According to Resources for the Future, a carbon-fee-and-dividend policy, such as the one prescribed in the Energy Innovation and Carbon Dividend Act (H.R. 2307), would reduce U.S. emissions by 2030 more than 50% below 2005 levels, in line with President Biden’s commitment.

Next, it’s a fast, effective policy across the whole economy. A clean electricity standard would affect power plants, but they only account for 25% of greenhouse gas emissions. An economy-wide price on carbon, however, reaches into every sector — electricity, transportation, industry, commercial/residential real estate, agriculture and land use. It’s also quick to set up, leading to meaningful impact in a matter of months.

Finally, it puts money in your pocket. A carbon tax becomes affordable for ordinary Americans when the money collected from fossil fuel companies is given as a dividend, or “carbon cash back” payment, to every American to spend with no restrictions, while protecting low- and middle-income Americans. Studies show that the monthly carbon cash back payments are enough to cover increased costs of 85% of American households, including almost all of the least wealthy 60% of Americans.

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. American exporters will then be subject to the European carbon tax, placing them at a competitive disadvantage. However, if the U.S. implements its own carbon price and carbon border adjustment, the policy can keep American businesses competitive and motivate more nations to price carbon themselves.

As Congress gets to work on legislation designed to meet America’s commitment to reducing greenhouse gas emissions, it’s clear that a price on carbon is an essential tool that must be included.

This June, concerned citizens from central Pennsylvania will be holding meetings with our congressional offices about this crucial policy. We urge our elected officials to support putting a price on carbon. And we urge you to remind them that this is something that you care about as well.