Placing a price on carbon—a fee that would shift the relative prices of different sources of energy—has been an idea long encouraged by environmentalists and economists. A comprehensive, economy-wide approach could help the U.S. achieve its climate goals, as well as incentivize innovation, pay for infrastructure investments, and take the place of more costly and less effective regulation. While legislators are increasingly proposing new policies centered around a carbon price, enacting a bipartisan price on carbon is difficult in the current atmosphere of hyper partisanship. On June 20, U.S. Sen. Chris Coons (D-Del.) and U.S. Rep. Francis Rooney (R-Fla.) discussed their respective carbon pricing policy proposals as well as their experiences seeking common ground on legislation with moderator Adele Morris, a Brookings senior fellow in Economic Studies and policy director of the Climate and Energy Economics Project.
Obstacles in building enduring bipartisan support
Senator Coons discussed his frustration in seeking bipartisanship in the U.S. Senate and noted that while most of his past legislation has had support from members of both parties, it is likely that what he proposes in this Congress will not have Republican support. “I think it is clear that climate change is real, that humans are driving it, and that we have to take action to address it,” he said. “I serve in the minority in the Senate, in a place where there are still precious few of my Republican colleagues who are willing to say all three of those things publicly.” https://youtu.be/HbKRgqHg2pc Ambassador Rooney has faced similar issues with his Republican colleagues. “Some of the slides I always carry around with me are Brookings slides,” he stated. “These are slides showing the cost of climate over the next 50 years. And the irony, which I try to tell my colleagues in the Republican side of things, is the counties and cities that are going to pay the highest price for inaction are ours, the red ones.” https://youtu.be/R3HU-2U1QQ8
Comparing carbon pricing plans
In examining HR 763, Amb. Rooney’s bill titled the “Energy Innovation and Carbon Dividend Act,” as well as Sen. Coons’ upcoming bill, Morris found considerable common ground. Both bills intend to price carbon and other greenhouse gases economy-wide, an approach that Morris argues has “tremendous breadth across the economy.” Both bills also implement a carbon fee that starts at $15 and increases each year, although the bills do so on different trajectories; they impose this carbon fee upstream in the supply chain of fossil energy; and they have a schedule for emissions targets with environmental benchmarks. https://youtu.be/ZfP9ayqpHc8 Morris shifted the conversation to how the bills differ, specifically in how the revenue generated by a carbon fee would be used. Sen. Coons noted that his proposal plans to take significant pieces of the revenue and invest it in infrastructure, clean energy, and transition effects. “The political reality is that in order to get support for an industry-wide and an economy-wide carbon fee we will likely have to invest proactively in retraining, in the impacts on the local economy … and then in investments by state and local governments in new economic opportunities,” Sen. Coons stated. He did note, however, that while there are many different ways to invest carbon fee revenues, the political fragility of any carbon pricing proposal means that the revenue will likely be a bargaining tool used in negotiations. Amb. Rooney agreed that it’s difficult to figure out how to divide and invest revenue that does not yet exist, and explained that his advocacy for a variety of approaches to revenue investment is based on gathering as much support as possible from all sides of the debate. https://youtu.be/0PPUmWxCn88
On holding energy companies liable
In their carbon pricing proposals, Sen. Coons and Amb. Rooney differed slightly in how they address the liability of energy companies for economic damages related to climate change. Amb. Rooney argued that energy companies that had engaged in good practices should be given some economic protection. He cited oil industry companies BP and Chevron as examples because of their involvement with solar and wind energy. “We are starting to see a dispersion between the responsible energy producers and the irresponsible ones that just want to milk everything they can and sell their company, and a further dispersion vis-à-vis coal.” Sen. Coons stated that while he has not seen any concrete proposals that would relieve potential liability, he would not take accommodation for potentially liable energy companies off the table until the final stages of a conversation.
How the Green New Deal affects policy proposals
When asked how their respective proposals compare with and work in relation to alternative legislation like the Green New Deal (GND), Sen. Coons criticized the GND, stating that “the Green New Deal is to a piece of legislation as sky is to scaffolding, they are quite different things.” He expressed that he does support it, but he argued that the GND is a bold framework without many details and that it needs specific legislation that specify how it would get done. https://youtu.be/FMfyd3jLWf4 Amb. Rooney offered a different perspective on the GND, viewing it as a great marketing opportunity to move Republicans toward the idea of a carbon fee. The full event audio and video are available on the event’s webpage. Sophia Durham made significant contributions to this post.