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Policy Matters

How to break the political logjam on climate change

It starts with leveraging market-based solutions and bipartisan appeal.

When the Trump Administration blocked federal climate action by undercutting the Clean Power Plan, the outlook was bleak. But climate protection has won new allies from an interesting direction: the right.

"Conservation" and “conservative” share the root "conserve," and four key sectors have made the connection with climate change. Religious conservatives cite an obligation of stewardship over unbridled exploitation of God-given resources. Hunters and anglers see disrupted breeding, migration and other threats to wildlife. The military sees national security imperiled by flooded coastal installations and disrupted worldwide food and water supplies. Business faces extreme weather-related damage and costlier insurance. These sectors are bridging partisan gaps to inform lawmakers.

Market-based solution, bipartisan appeal

More businesses are coming to see a carbon tax as the best policy tool for cutting carbon because it’s easier to plan for, harder to game and economically more efficient. Not punitive, this tax captures and quantifies actual, long-term costs (to economists, "externalities") of carbon emissions.

Markets work best when costs are included in the prices sellers will accept. When costs go down, sales go up, and vice-versa. In a classic market failure, firms whose products and services worsen climate change fail to cover these costs. Someone else pays, for example in the form of higher costs for health care, infrastructure repair or flood control. Pricing carbon for its actual costs (economic, social and environmental) is market-based and assigns a cost for each ton of CO2 emitted. Now, the debate is moving from whether a carbon tax is politically realistic into how to deploy the revenues. 

More businesses are coming to see a carbon tax as the best policy tool for cutting carbon because it’s easier to plan for, harder to game and economically more efficient.

Catrina Rorke of R Street Institute said, "For years, the tax reform debate has been stymied by disagreement over how to raise revenue and how much revenue to raise. With tax reform front-and-center, the carbon tax is now, smartly, part of that revenue mix. Congress and the White House need to hear from businesses of all stripes that not only is a carbon tax acceptable, it can be structured to replace existing regulations, promote global trade competitiveness and finance exactly the kind of pro-growth tax reform that can unleash job creation and economic growth across the country."

A 2013 PricewaterhouseCoopers report showed 73 percent of greenhouse gasses are emitted by just 10 percent of the world’s 500 largest firms. All other firms will gain more from addressing climate change than from maintaining the status quo. Many conservatives prefer a carbon tax over power plant rules or fuel economy standards as it lets business adapt, innovate and use market forces to reduce emissions. It also restrains the growth of government.

How business can support a carbon tax

Join groups such as American Sustainable Business Council that work across the aisle, build bridges and update lawmakers’ views on "what business wants." Follow brands that support the idea and urge firms with a "green" stance to stop supporting anti-climate groups such as ALEC and the U.S. Chamber of Commerce.

Sign statements of support for a carbon tax such as Pass a Carbon Tax and pledges such as American Business Act on Climate that commit to reducing carbon footprints and increasing low-carbon investments. Urge governors to support climate change action, including putting a price on carbon, to protect state economies, and influence your local chapter to challenge the national Chamber of Commerce on climate.

Urge federal representatives to move past partisan labels on climate. Bob Inglis, former South Carolina Congressman and now head of RepublicEN, suggested to business owners, "Invite your member of Congress to tour your operations. While they're touring, tell them why it's important to act on climate change and how a price on carbon dioxide would help."

Bi-partisan support builds momentum

The bi-partisan Climate Solutions Caucus shows what’s possible. Started February 2016 by Rep. Carlos Curbelo (R-Fla.) and Rep. Ted Deutch (D-Fla.) in the face of ruinous coastal flooding, this growing group will maintain its even balance of both parties. In February, former secretaries of state and other high-profile Republicans publicly pushed to tax carbon emissions. Curbelo famously has said that when asked what kind of Republican would care about climate change, he’d answer, "A 37-year-old one."

Curbelo has a lot of company. A post-2016 election survey by the Yale Program on Climate Change Communication found that 66 percent of registered voters, including 49 percent of Republicans, support a carbon tax on fossil fuel companies, with the money used to reduce personal taxes. And even facing strident partisans, the planet has a powerful ally: voter indifference. The Environmental Defense Fund’s Tony Kreindler believes climate’s low priority with Republicans lets their representatives safely support progress.

Rob Sisson, executive director of Conserve America, predicted, "As Congress returns from summer recess, I think we’ll hear more and more members talking openly about climate risk and expressing interest in pragmatic, achievable solutions."

Sisson added that ConservAmerica has a proposal that, among other things, "incents accelerated investment in zero-emission energy sources."

66 percent of registered voters, including 49 percent of Republicans, support a carbon tax on fossil fuel companies, with the money used to reduce personal taxes.

Inglis forecasted, "This summer, support for climate change action will be building. There will be more and more evidence of the need to act and more and more conservatives stepping forward to encourage their members of Congress to act.

"Bridge-building is crucial. The left will not be able to price carbon dioxide alone. Like all major environmental legislation in the past, pricing carbon dioxide will require bipartisan cooperation." A great example of that is Earth Day Texas, organized by Trammell Crow in Dallas.

Bipartisan negotiation will figure in how carbon tax revenue is used.  Progressives favor funding clean energy programs, reducing inequality and helping the poor handle increased energy costs. Conservatives favor cutting other taxes in direct proportion to carbon tax revenues raised. These issues must be resolved before carbon tax enactment, but even this is progress.

Climate change action is earning business support the old-fashioned, market-based way: Because business needs it. A solution that works for all stakeholders, including those who depend today on fossil fuels, can be brokered, and business may be just what pushes it.

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