PUTTING A PRICE ON CARBON
WEBINARS. On April 25, 2019, the Price on Carbon Steering Committee (see below) hosted its sixth webinar, Cap and Trade is Alive and Well, featuring Nat Keohane, Vice-President of the Environmental Defense Fund. A summary of Mr. Keohane's presentation and a recording of the webinar are available here.
POSITION. Leagues are often asked to support specific carbon pricing proposals. At the 2018 LWVUS Convention, delegates voted overwhelmingly to support a resolution clarifying the League's position on carbon pricing.
The League of Women Voters stands united with, and in support of, efforts to price carbon emissions, whether cap-and-trade, carbon tax/fee, or other viable pricing mechanisms. The League does not have a position on how the revenue generated is to be used.
We do not espouse any single method of pricing carbon over another. We will evaluate all proposed methods based on their effectiveness to abate emissions and whether the method can be successfully implemented.
About Pricing Carbon
Economists -- and many others, including League members -- agree that putting a price on carbon is the most effective way to reduce GHG emissions. Indeed, delegates to the LWVUS Convention in June 2014 voted overwhelmingly in support of League efforts to put a price on carbon. A carbon price increases the cost of fossil fuels and the products created by them and thus encourages lower-carbon behavior. It also generates funds that can be used for a variety of purposes, including, for example, increased investment in energy efficiency and alternative energy resources.
There are two main market-based strategies for reducing GHG emissions. A cap-and-trade system curbs emissions by limiting the quantity of a pollutant (e.g., carbon dioxide) that can be emitted and then allocating a corresponding number of tradable emissions permits to sources covered by the program. A carbon tax curbs emissions by raising the price of fossil fuels based on their carbon content. The background paper Cap-and-Trade versus Carbon Tax: Two Approaches to Curbing Greenhouse Gas Emissions (2009) describes the main features of the two approaches and discusses the strengths and weaknesses of each.
An excellent resource on carbon pricing is the Price on Carbon website developed by Berkeley, Albany, Emeryville League member Diz Swift. The website has been endorsed by the LWVUS Board.
League Work on Carbon Pricing
The League strongly supports putting a price on carbon but is not advocating one particular system at this time. A carbon tax and a cap-and-trade system are both market-based tools that create incentives to reduce carbon emissions, and the League could support a well-designed system of either type. Placing a significant and increasing price on carbon is critical to achieving the aggressive reduction in U.S. carbon emissions that is needed to limit future global warming.
The League supported the Waxman-Markey cap-and-trade bill (the Climate and Security Act of 2008), for example, which was designed to cut GHG emissions from electric power, transportation, and manufacturing sources. Though it passed in the U.S. House, the legislation was side-tracked in the U.S. Senate by special interests.
League advocacy for a carbon tax gained momentum at the 2014 LWVUS Convention when delegates gave overwhelming support to a resolution that the League "should support a price on carbon emissions that will increase in stages, as part of an overall program to improve energy efficiency and to replace fossil fuels with renewable energy, fast enough to avoid serious damage to the climate system."
Price on Carbon Steering Committee. Building on this strong support for carbon pricing, several League members decided to create an informal Price on Carbon network to help interested League members learn more about the topic and about carbon pricing efforts underway around the country. Members of the Steering Committee for this initiative include Diz Swift (LWV California Climate Change Program Director), Eleanor Revelle (LWVUS Climate Change Task Force Chair), Chad Tolman (LWV Delaware), Launa Zimmaro (LWV Massachusetts Environmental Advocacy & Action Co-Chair), and Gloria Chun Hoo (LWV California Climate Change Task Force member).
The Steering Committee organized a Price on Carbon caucus at the 2016 LWVUS Convention and presented information about the variety of carbon pricing models available, efforts to promote carbon pricing in three very different states, and lessons learned from these efforts.
• Links to the slide show presentation are available here on the Price on Carbon website.
• Also available is a recommended reading list prepared for the caucus by Steering Committee and Climate Change Task Force member Chad Tolman.
At the 2018 LWVUS Convention, Steering Committee members proposed a resolution clarifying the League's position on carbon pricing and hosted a caucus to explain the rationale for proposing the resolution and provided substantive information on how to evaluate carbon pricing proposals.
Webinars. The Steering Committee also hosted a series of webinars featuring highly regarded experts on the topic of carbon pricing.
• February 21, 2017 -- The Case for Carbon Pricing, with Dr. Naomi Oreskes, science historian, geologist, and author of both scholarly and polular books and articles on the history of earth and environmental science. A recording of this webinar, together with slides and handouts, is available here.
• May 23, 2017 -- An Economist's Perspective on Carbon Pricing, with Dr. Adele Morris, Senior Fellow and Policy Director for Climate and Energy Economics at the Brookings Institution. A summary and a recording of the webinar, along with a list of resources, are available here.
• August 28, 2017 — Managing Risk by Pricing Carbon, with Dr. Bob Litterman, founder of Kepos Capital, former partner and head of risk management for Goldman-Sachs, and much awarded leader in risk management. A summary of the webinar, together with a recording, slides, and handouts is available here.
• May 9, 2018 — California Cap-and–Trade, with John Gioia, member of the California Air Resources Board (CARB), and Emily Wimberger, Chief Econommist at CARB. A recording of the webinar along with a copy of the slides used in the presentation and a link to helpful resources on California's cap-and-trade program are available here.
• July 26, 2018 — Promoting Effective Action on Carbon Pricing, with members of the Price on Carbon Steering Committee. A recording of the webinar along with slides and handouts are available here.
• April 25, 2019 — Cap and Trade is Alive and Well, with Nat Keohane, Vice-President, Environmental Defense Fund. A summary and a recording of the webinar are available here.
League members interested in keeping up to date with what Leagues around the country are doing to promote carbon pricing in their state are invited to join the Price on Carbon network by sending an email to climatechange@lwvc.org. Include "LWV Price on Carbon" in the title line.
RESOURCES
- 11 essential questions for designing a price on carbon by Adele C. Morris, The Brookings Institute, explores key design decisions that should be answered in developing an actual carbon pricing policy. (Carbon Pulse, July 2016).
- State-level carbon taxes: Options and opportunities for policymakers by Adele C. Morris, Yoram Bauman, and David Bookbinder addresses issues that will arise in designing a state-level tax. (The Brookings Institute, July 2016)
- Carbon Pricing in a Fiscal Context, by Greg Dotson and Ben Bovarnick discusses how carbon pricing might affect the national economy and compares expected carbon tax revenue with current sources of federal revenue, federal program expenditures, and new policy proposals. (Center for American Progress, June 2016).
Last updated: 2/6/2022