PUTTING A PRICE ON CARBON
NEW. On February 21, the Price on Carbon Steering Committee (see below) hosted a webinar, The Case for Pricing Carbon, featuring internationally renowned science historian Naomi Oreskes. Dr. Oreskes explained the economics of carbon pricing and fielded a range of questions from the webinar audience. A recording of the webinar, together with slides and handouts, is available on the Price on Carbon website here.
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.
The Clean Power Plan encourages states to consider incorporating emissions trading in their compliance plans. EPA has announced its commitment to supporting states with this market-based approach by helping states track emissions, allowances, and credits and by helping to implement multi-state trading systems. The Plan also details how states can make their power plants "trading ready," which would allow them to trade with plants in other states, even if there were no formal interstate agreement. Finally, the Plan also provides that states can impose "fees" (i.e., a carbon tax) on affected power plants, as another tool to meet its emissions-reduction requirements.
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
Building on the strong support for carbon pricing demonstrated by delegates to the 2014 LWVUS Convention, 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 Berkeley, Albany, Emeryville), Eleanor Revelle (LWVUS Climate Change Task Force Chair), Chad Tolman (LWV Delaware), and Launa Zimmaro (LWV Massachusetts).
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.
More recently, the Steering Committee hosted its first webinar, featuring internationally renowned science historian Naomi Oreskes. Additional webinars are planned and will take place roughly quarterly. 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 firstname.lastname@example.org. Include "LWV Price on Carbon" in the title line.
- 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).
- 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: 3/21/2017