Getting to Yes on Climate Change

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In an open letter to Sens. Kerry, Graham, and Lieberman, Dave Roberts notes that putting a price on carbon has obviously run into a lot of resistance. But carbon pricing is essential to any serious effort to reduce carbon emissions. So how do we thread this needle?

There is a way. It begins by changing the way we think about carbon pricing. For at least the next five to ten years, no politically palatable price on carbon is going to serve as a primary driver of change. Anything that can pass simply won’t be high enough and its effects will be too diffuse. The main goal with your bill should be to establish a framework whereby a carbon price is implemented and steadily raised. The initial price can be low — low enough to avoid the kind of political backlash that has poisoned previous efforts — and phase in over time so affected industries have time to prepare. At least in the short term, we should think of carbon pricing as a funding mechanism for clean energy policies. It’s a form of responsible budgeting, nothing more, nothing less.

….In exchange for reducing the role of carbon pricing, you should push to strengthen and expand the clean energy and efficiency provisions in your bill. Without a substantial price on carbon those policies will have to be that much more robust if they are to meet the goal President Obama promised in Copenhagen: 17 percent from 2005 levels by 2020.

Actually, this isn’t really an “exchange.” It’s more like two pieces of a puzzle fitting neatly together.

The price of carbon created by a cap depends on how much carbon emitters are required to cut. If they have to cut a lot, the price is high. If they only have to cut a little, the price is low. And as many, many people have pointed out already, there’s a lot of low-hanging fruit available on the carbon front. This stuff is mostly within the realm of the efficiency and clean energy provisions that Dave talks about, and it has a lot of potential to reduce carbon considerably all on its own. If these provisions are implemented, a carbon cap would most likely require only a small additional carbon reduction, which means that a cap that moved steadily toward a 17% reduction over the next decade would probably produce a pretty modest price for carbon. It’s only in the decade after that, when the cuts become larger, that the declining cap would start to produce a really significant carbon price.

Of course, this all depends on those other provisions having some teeth, but that’s quite doable: the public generally favors efficiency and clean energy standards, so toughening those up would be relatively popular and would help keep the price of carbon modest. If the revenue generated by the cap is used to fund those efficiency and clean energy programs, and if it’s sold as both a climate measure and a national security measure, it could be a pretty popular piece of legislation.

Now, this might all be pie in the sky. If Republicans keep up their united front of objecting to anything and everything that Democrats propose no matter what, it doesn’t really matter what a hypothetical climate bill looks like. But if they don’t, Dave’s suggestion has a lot of merit. Read the whole thing for more details.

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