Brenda Pace

Pace

Editor’s note: This is the final in a series of four columns on climate change and potential legislation that may give readers information they can take action on in the effort to meet carbon emission reduction goals.

The Oregon Department of Water Resource’s recent report, “Groundwater Resource Concerns” described the Deschutes River Basin as a watershed of concern. Water levels in wells are dropping east, north and south of Bend. Some areas can blame the piping of canals or increased development, but as far back as 2008, Marshal Gannett of the U.S. Geological Survey said, “We found, depending on where you are, these things have different influences … Climate was the biggest cause of decline.”

After three articles in this series, it’s time for a summary. First, at 419 parts per million the level of carbon is higher than seen in human history and climbing. Carbon is the cause of increasing heat and the associated weather. Second, the United States has not coalesced around atmospheric carbon through either government expenditures, regulations or a carbon price.

If expenditure legislation can be passed, the most productive measure would be to improve the electrical grid to support the electrification of much of transport and industry. Since local electrical utilities are regulated by state commissions that often mandate low retail prices, they are unable to achieve the task unaided.

A regulation to use low carbon processes in industries such as steel and concrete while in the process of improving our infrastructure would be positive.

A carbon price would cost fossil fuel producers $15 per ton of carbon content initially, thereafter increasing by $10 a year. The logic of a carbon price is clear — when the price of carbon climbs higher, use less and at a certain price, none at all. The revenues are largely returned to households.

Climate scientists have estimated that to avoid the worst effects of climate change, we must achieve net zero carbon emissions by 2050 (International Panel on Climate Change). Net zero means any carbon emitted will be sequestered. Sequestration means carbon is captured in products (like cement), soils, plants and underground. By 2050 then, the atmosphere would be carbon neutral, plateauing and beginning to decline.

Significantly, the aforementioned IPCC projections and virtually all climate models assume a price on carbon because it is the most effective instrument to achieve net zero by 2050, according to scientists and economists.

Scientists and economists, however, are not alone. A multitude of businesses share a preference for carbon pricing including the United States Chamber of Commerce, the Business Roundtable, the American Bankers Association, Financial Services Forum, the American Property Casualty Association, the Commodity Futures Association, and most recently, the American Petroleum Association.

What do these huge associations and their many members see in a carbon price? In their announcements, they describe it as sustaining industry, as predictable and durable (endures for the transition to net zero), countrywide (not scattered jurisdictions), and supporting innovation and free enterprise.

Most importantly, a carbon price creates a level playing field on which business can compete. With the same rules and risks, everyone can invest. For example, business investment can share in the upgrading of the electrical grid, not just taxpayers and ratepayers. With a carbon price, markets and investors can help to finance new technology, innovation and production throughout the economy.

Some believe that establishing a carbon price that encourages the economy to reduce carbon will allow big business to game the system and rig the outcome. Sure, big companies can control their markets short term but not long term. Standard and Poor’s index of 500 of the biggest companies is illustrative in that 400 have been replaced by more successful companies over the last 50 years. Business must adjust as cost and demand changes. Further, the simplicity of charging at the source of production for fossil fuels leaves little room for avoidance or manipulation.

As for jobs, we should note how far green industry has come. Jobs in all kinds of renewables are already equal to 70% of all fossil fuel jobs (2020 U.S. Energy & Employment Report).

Again, a carbon price structure that returns a dividend to households ensures that it is not a drag on consumer spending. An estimate by the Department of the Treasury for 2017 set revenue at $60 billion which would work out to about $400 per household initially and $1,200 or more after four years. This is important since personal expenditures constitute 68% of the American economy (Federal Reserve of St Louis). Such a structure supports both households and employment.

Finally, many local politicians support a carbon price. For example, the Oregon Senate passed Senate Joint Resolution 5 which names the Innovation and Carbon Dividend Act, HR 2307, my personal favorite. Utah’s current and former House members have announced their support and polling shows that a significant majority of the population does too.

So, what to do? Changing your personal carbon footprint is, of course, beneficial, but we need national policy to bend the curve on carbon emissions. Please make a phone call, send an email, schedule a visit to U.S. Sens. Ron Wyden and Jeff Merkley, Rep. Cliff Bentz or send a card to President Joe Biden, Vice President Kamala Harris, EPA Administrator Michael Regan or Energy Secretary Jennifer Granholm . You can join Citizens Climate Lobby with a working chapter right here in Bend.

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Brenda Pace is retired from Pace Research Co., a regional economics consultancy, and the Center for Natural Lands Management, a habitat management nonprofit for endangered species responsible for more than 75,000 acres.

(3) comments

gregb2781

Liberals are always looking for excuses to raise taxes.

MF

Federal taxes are the lowest they’ve been in a hundred years.

gregb2781

Is that a bad thing?

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