By Former U.S. Rep. Bob Inglis and Kelsey Grant
“Carbon tax, beloved policy to fix climate change, is dead at 47.”
As early as last summer, an article in The Atlantic declared the so-called political “death” of carbon pricing. With the passage of the Inflation Reduction Act (IRA) last month, many critics feel vindicated in their skepticism of the policy.
The IRA, which cleared Congress with only Democratic votes after a grueling year-long negotiation process, will direct $370 billion in tax credits and other measures toward addressing climate change and help cut U.S. emissions by an additional 7-10% by 2030.
Missing, however, was a price on carbon – the market-based tool, long favored by economic experts, that would assess a fee on carbon emissions to accelerate the development and deployment of clean energy.
This absence has emboldened some commentators to level a broader – and incorrect – critique of the policy. The failure to include a carbon price in the reconciliation bill, they argue, speaks to the political folly of an economy-wide financial penalty on carbon emissions. By contrast, they argue, the recently passed climate bill demonstrates that subsidies and government spending are the true pathway to climate progress.
Never mind that 49 out of the 50 senators involved in reconciliation negotiations, and the White House, were ready to support a carbon price during this congressional session. And that a growing number of Republicans have started expressing support for the idea as well – making it the only climate policy of comparable impact to the IRA that enjoys some level of bipartisan backing.
Never mind that carbon pricing would actually be more effective at reducing emissions than the clean energy tax credits contained within the partisan IRA. And that carbon pricing is likely essential if we are to decarbonize our economy at the scale and speed necessary.
Never mind that just in the last two years, the Business Roundtable, US Chamber of Commerce, and American Petroleum Institute – three of the largest and most powerful lobby groups in the country – have endorsed market-based climate action, including and especially carbon pricing. And that other influential trade associations, including the American Bankers Association, Natural Gas Supply Association, and Electric Power Supply Association, have recently done the same.
Never mind that Fortune 500 companies are increasingly assessing internal carbon prices across their own operations, on the assumption that this kind of policy will inevitably come down the pike. And that a growing number of the nation’s largest financial firms and asset managers are pouring money into the clean energy economy – investments that will align future growth with a carbon price and build greater political will for the policy.
Never mind that more than 85% of global emissions come from outside the United States, something the IRA does not address. And that carbon pricing, when paired with a border carbon adjustment – a similar fee on high-polluting imports – would help compel other countries to do their part to reduce emissions.
Never mind that this idea of a border adjustment – which would give American manufacturers a competitive edge – has attracted strong and growing bipartisan support. And that Europe is poised to soon implement a similar carbon adjustment at its border, creating a political and economic imperative for the U.S. to lead the charge on an emissions pricing strategy of its own.
Never mind that countries around the world already have begun pricing carbon, including Canada, the U.K., South Korea, and the European Union. And that other nations are also marching ahead on carbon pricing systems, including India, Israel,South Africa, among others.
Never mind that the IRA includes a fee on methane, a concrete example of U.S. emissions pricing in action. And that this same approach of pollution pricing is how the U.S. successfully addressed the acid rain challenge on a bipartisan basis in the 1990s, under budget and ahead of schedule.
The trajectory of carbon pricing support is clear and unmistakable. In the last five years, there has been a sea change on this topic in the U.S., with major businesses, trade associations, and environmental experts aligning themselves in support of this policy approach.
This doesn’t mean a national carbon pricing policy is imminent. But, as we plot our next steps on climate policy, it highlights why carbon pricing deserves to be an area of strategic focus.
In laying the groundwork for carbon pricing, the growing support from businesses, the investment community, and lobbying groups inside D.C., while important, won’t ultimately be enough. The legislative process rests, as it should, on a bed of public persuasion.
To set the stage for strong and durable action, there also has to be organizing outside the Beltway — efforts to marshal enough public support, at the state and district levels, to create the conditions for legislative breakthroughs.
As crucial as this organizing is, it has been largely nonexistent in most of the country, especially on a bipartisan basis. This provides a clear opening for future organizing and investment by environmental and philanthropic leaders.
Ultimately, major legislative accomplishments are the result of years of research and advocacy, sustained organizing, and coalition building, leading to the retreat of old opponents and the arrival of new, even unlikely, allies.
Carbon pricing hasn’t seen its moment at the national scale – yet. But the significant, cross-sectoral coalition that has assembled in support of this policy illuminates an emerging pathway to the next legislative breakthrough on climate, and we should take it. Not as our only approach, but as one in a basket of strategies to do all we can on the most important issue of our time.
Former U.S. Rep. Bob Inglis (R-SC4 1993-1999; 2005-2011) is the executive director of republicEn.org, a growing group of conservatives who care about climate change.
Kelsey Grant is the Research and Policy Coordinator for Adamantine Energy, a consulting firm which advises energy companies on developing decarbonization strategies and future-proofing against rising social risk.
“The Invading Sea” is the opinion arm of the Florida Climate Reporting Network, a collaborative of news organizations across the state focusing on the threats posed by the warming climate.