This blog was inspired by Infinite Earth Radio’s new #Carbon podcast series, co-hosted by our Executive Director Michael Green. The first episode focuses on the conservative case for a carbon price. Stay tuned for their monthly podcasts on carbon pricing. Click below to listen.
The Conservative Case for a Carbon Price
By Kate Galbo, Programs Manager
As President Trump seeks to dismantle the EPA, many are left wondering what’s next. In February a group of prominent elder Republicans and business leaders pitched a carbon price to top White House aides, selling their plan as an economic win that could drive job growth and yield emissions reduction. While there wasn’t much public follow up comment to the Climate Leadership Council’s plan, it is becoming increasingly clear that a carbon price is our last hope for U.S. climate progress.
If you’re the conservative free market type who also thinks climate change poses serious economic risks, a carbon price is a rather elegant and appealing solution. Cap-and-trade is a common market-based approach, but a more direct and less bureaucratic way is to put a price on carbon. When polled, economists overwhelmingly support the idea. The idea of reducing greenhouse gas emissions by putting a price on carbon enjoys support from the traditional conservative community because it’s more cost-effective (reaches a given emissions target at a lower cost) than a more crude regulatory approach. A carbon price is a pathway toward deregulation of the energy industry, using little government interference to reduce emissions.
Infinite Earth Radio’s new #Carbon Series recently featured Catrina Rorke, senior fellow and energy policy director for the R Street Institute, in a podcast on the conservative case for a carbon price. The R Street Institute is a public policy think tank engaging in policy research and outreach to promote free markets and limited, effective government. R Street has long advocated for a revenue-neutral carbon price. Catrina noted why she supports a carbon price as an inherently conservative idea:
“It’s certainly a conservative idea to use the lightest touch possible to correct a market failure. So, when you look at a role for government, as a conservative you don’t want government to expand beyond addressing substantive market failures, where the market isn’t addressing problems on its own. And climate change is a really perfect example of this.”
For conservatives who want action on climate, market solutions are preferable because climate change is an economic problem. Climate change is a textbook example of a market failure, where private-sector actors impose costs on other actors without paying appropriate compensation. Carbon emitters are contributing to climate change, which imposes costs on Americans and our economy.
The market-based approach of carbon pricing creates incentives for businesses and households to adopt efficiency and innovation without telling them how and when to do so. Companies and consumers would be given clear market signals in the form of higher fossil fuel prices, unleashing the market to cut emissions. This allows businesses and individuals to decide for themselves the best way to reduce their contribution to climate change. It encourages utilities to switch to cleaner forms of energy, like wind and solar. It encourages businesses and individuals to buy cleaner goods and services and practice efficiency. A regulatory system that tried to achieve all of this would be heavy-handed and likely less effective. A conservative solution to climate change can mitigate the risks of climate change and be pro-growth at the same time.
While carbon pricing checks the conservative boxes, those on the left are favorable towards the policy as well. In such a deeply divided political climate, we need effective bipartisan policy if we are to move forward. Carbon pricing is just the bridge we need to reach a clean energy future.
About the author: Kate Galbo joined CABA in September of 2015 after receiving a degree in Environmental Policy and Analysis from Boston University. Previously, she conducted research for Policy Studies Institute to help bridge the gap between sustainable development research and society. Kate has previously interned for other Massachusetts non-profit organizations. As Programs Manager, Kate focuses on engaging with our member businesses to take targeted policy action, achieve meaningful emissions reductions, and foster a sense of community.