BOSTON -- Last month, President Joe Biden released a massive infrastructure spending plan designed to build a cleaner and healthier America. This week, on Earth Day, the president is hosting world leaders for a global climate summit, and is discussing ways in which the U.S. will meet its goals under the Paris climate accords. According to a new report, putting a price on carbon can be key to the success of both. In Carbon Pricing 101: Strategies for putting a price on global warming pollution, U.S. PIRG Education Fund, Environment America Research & Policy Center and Frontier Group recommend that the federal government and U.S. states pursue carbon pricing programs, along with other policies, to cut pollution, as the best way to achieve the emissions reductions necessary to stave off the worst of global warming.
“Global warming threatens our lives, livelihoods and the future of the planet. We should be using every mechanism we have to stop climate change in its tracks,” said Matt Casale, U.S. PIRG Education Fund’s Environment Campaigns director. “To do that, we need to stop putting more greenhouse gases into the air by 2050. Carbon pricing is a proven and effective way to help us meet that goal.”
Carbon is an enormous source of climate pollution. Carbon pricing works by charging polluters for the carbon they release into the environment. There are two main ways to put a price on carbon: Impose a tax directly on harmful emissions, or implement a cap-and-trade program, which limits total emissions and allows polluters to buy and trade permits to pollute.
The details of the two systems vary, but they are both effective at achieving the same goal: reducing climate pollution. And by making polluters pay for their emissions, carbon pricing also has the potential to raise significant money that can be spent on investments that can help the nation achieve a healthier climate, like clean infrastructure.
A $50-per-ton tax on carbon in the U.S. would help drive emissions reductions of about 40 percent, or around 2620 million metric tons of CO2 equivalent by 2030, below 2005 levels. This makes it one of the most significant opportunities to reduce climate pollution. That would be like taking more than 550 million cars off the road -- almost double the number of cars registered in the U.S.
There are already two major cap and trade programs operating in the U.S.:
The bipartisan Regional Greenhouse Gas Initiative in the Northeast and Mid-Atlantic played a pivotal role in achieving overall regional power sector emission declines of over 50 percent between 2005 and 2018.
California’s cap and trade program. In 2018 alone, the program generated $3.3 billion that the state invested in clean transportation, sustainable communities, natural resource management, waste diversion, clean energy and energy efficiency.
“A problem like global warming is going to take a lot of ingenuity to overcome,” said Frontier Group’s David Lippeatt. “We’re going to need to utilize every tool in the toolbox -- and our report shows that carbon pricing could be one of the power tools for this job.”
The threat of global warming is immediate, but the world has more technological and policy opportunities than ever before to address the problem. Carbon pricing won’t solve the entire problem on it’s own, the report explains, it needs to be paired with other policies and investments that cut pollution, but it can be a major piece of the puzzle.
“We all pay to have our trash hauled away, why shouldn’t climate polluters do the same?” said Andrea McGimsey, senior director of Global Warming Solutions for Environment America. “By ensuring that polluters pay for damaging our climate and reinvesting the proceeds into the clean energy transition and programs that benefit the public, the U.S. can take a big step toward making a livable future a reality.”