Episode 4: Why doesn't the U.S. have a national price on carbon? [Full Transcript]
The obstacles preventing a national carbon price and an argument for a different approach to climate action
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Casey: Welcome to Pricing Nature from The Yale Center for Business and the Environment and the Yale Carbon Charge. I’m Casey Pickett.
Naomi: I’m Naomi Shimberg.
Jacob: And I’m Jacob Miller.
Casey: Over the last few episodes... We’ve explored the basics of carbon pricing mechanisms, examined the social cost of carbon, and even taken a time-traveling journey through 30 years of global climate negotiations. But there’s an important question we still haven’t really answered… Why don’t we have a national policy to price carbon emissions in the United States?!
Naomi: We asked that question back in Episode 1, Casey, and I said it was because carbon pricing is complicated, hard to implement, and politically charged. All of those things are… definitely still true.
Casey: I remember this, something about John Oliver on a sled pulled by hamsters…
Naomi: Yes that is definitely the image I was hoping would stick with our audience.
Jacob: Well, In any case, Naomi, you were right -- carbon pricing is complicated, hard to implement, and politically charged. And yet 46 countries already use it! There are carbon pricing systems in the EU and China. And there’s even regional carbon pricing within the United States.
Naomi: Ok, but why hasn’t it been implemented on the national level yet? I think our audience is ready to dig into the weeds a little more. It’s time to talk about carbon pricing legislation in Congress -- past, present, and future.
Casey: OK, audience, if you’re not feeling ready… speak now or forever hold your peace.
Jacob: [short pause] Alright well I’m not hearing any objections so… Let’s get into the action. [dramatically] Legislative action.
Casey: That sounds like a political drama where “The Rock” is chairman of the Ways and Means committee or something. IN A WORLD WHERE THE FATE OF THE...WORLD HANGS IN THE BALANCE, ONE MAN TRIES TO CONVINCE...51% OF HIS LEGISLATIVE COLLEAGUES TO SIGN ON TO INTERNALIZING THE EXTERNALITIES OF CARBON POLLUTION.
Naomi: You don’t wanna know how many takes that took...
Jacob: I love “in a world, where the fate of the world…”
Casey: You like that? Huh? Thank you.
Jacob: Today, we’ll start by looking at how close we’ve come to putting a national price on carbon emissions in the past. And then we’ll look to the future, to find out what climate policy might look like in the United States, at least for the next four years.
Casey: Most of this story is about carbon pricing, but toward the end of the show, we’ll consider the other big idea for US climate action, the Green New Deal.
Casey: Act I: A History of Carbon Pricing Legislation in the U.S.
Casey: It’s been over a decade since Congress last seriously considered a national price on carbon emissions. But our story begins even earlier… If you listened to Episode 3 you might remember that in the late 90s, much of the world signed on to the Kyoto Protocol, an international agreement meant to curb global carbon emissions. But, you may also remember that the U.S. was conspicuously absent from this global agreement.
Jacob: Congress had been critical of the Kyoto Protocol, largely because the agreement didn’t restrict the emissions of countries such as China, whose emissions were low, but growing quickly. Because of these concerns, the U.S. Senate passed a resolution to prevent the United States from ratifying the Kyoto Protocol. And for the next ten years or so, the U.S. sat on the sidelines of global climate negotiations.
Naomi: But during that time, debates about climate change in the U.S. were picking up steam…
Al Gore: [CSPAN] “...and I think more and more people agree now that those who deny global warming are just flat out wrong. It is a real threat that we must confront and provide leadership to challenge…
Naomi: That’s former Vice President Al Gore. Probably the most public figure to sound the alarm on climate change at the time. But not everyone was alarmed… folks like U.S. Senator James Inhofe, then Chairman of the Committee on Environment and Public Works, vocally disagreed:
James Inhofe: [CSPAN] “Catastrophic global warming is a hoax… The Kyoto Protocol has no environmental benefits, natural variability, not fossil fuel emissions, is the overwhelming factor influencing climate change.”
Casey: James Inhofe, isn’t he the Senator who brought a snowball onto the Senate floor to prove that global warming was a hoax?
Jacob: Uhhh ya, that’s the one.
Naomi: Okay, so in the early 2000s, there were plenty of speeches and grand statements on climate change. But the climate change debate wasn’t all talk. Some folks were putting real bills on the table to curb carbon emissions. In 2003, a bill was introduced to establish a cap-and-trade system covering 85% of the U.S.’s carbon emissions. It was known as the McCain-Lieberman Climate Stewardship Act of 2003.
Jacob: And Naomi, just so everyone got that -- you said McCain as in John McCain, right? 2008 Republican nominee for president.
Naomi: Yes, the one and the same -- this bill was, to some degree, bipartisan! It was originally sponsored by John McCain, Republican of Arizona, and Joe Lieberman, then a Democrat from Connecticut. And it eventually found eight other co-sponsors -- one Republican and seven Democrats.
Casey: And Naomi, remind us how this bipartisan bill performed in the Senate in 2003?
Naomi: It didn’t pass, but it wasn’t a total bust! It won 43 yeah votes -- 37 from Democrats, and 6 from Republicans. This was actually a lot more support than many carbon pricing proponents expected.
Casey: 37 yea votes from Democrats, and 6 from Republicans. So there’s definitely some bipartisanship here, Senators not totally voting along party lines, but there’s also a clear imbalance, right? A lot more Democrats supported this bill than Republicans.
[contemplatively] So in 2003, we’re seeing a partisan divide forming on carbon pricing policy. You know, for a long time, climate and the environment weren’t the polarizing issues they are today… President Nixon signed the EPA into existence. The first President Bush signed the 1990 amendments to the Clean Air Act.
HW Bush: “And today I’m very proud, on behalf of everyone here, to sign this Clean Air Bill, Clean Air Act of 1990. This landmark legislation will reduce air pollution each year by 56 billion pounds…”
Casey: In that example alone, you’ve got a bill led by a Republican President, and only 10 Senators voted against it. 5 Democrats and 5 Republicans. Now, to be clear, the Clean Air Act amendments of 1990 didn’t explicitly deal with climate change, they were more about the environment in general… But President Bush also passed the Global Change Research Act, which expanded climate change research efforts in the US... and that passed 100-0 in the Senate.
Jacob: Wow Casey you’ve got bipartisanship coming out of your ears.
Casey: How can you even see? I’ve got the headphones on…
Jacob: You know, “see my ears in the show”? Okay. Although, maybe it isn’t fair for us to compare a bill that invested in climate change research, to the McCain-Lieberman bill, which actively regulated, or would actively regulate 85% of US carbon emissions. That’s sort of comparing regulatory apples to oranges. It might make more sense to look at a carbon pricing bill from that same era.
Unfortunately... there aren’t a lot to choose from. In fact, there’s only one bill. Progressive Democratic Congressman Pete Stark proposed the first carbon tax in 1990, in response to the first IPCC Climate Change Assessment Report. But he wasn’t able to get a single cosponsor for his Carbon Tax bill. He reintroduced the bill twice, and still wasn’t able to get any support. But opposition to the bill wasn’t partisan… In fact, the majority of opponents actually came from his own party.
Casey: Okay so in this case, congress is still unified, but they’re unified against a carbon pricing bill.
Jacob: Exactly -- at the time, the opposition to carbon pricing wasn’t really partisan. But neither was support for a global warming research program. Climate just wasn’t a partisan issue yet... It was a different time. We talked to former Congressman Carlos Curbelo, a Republican supporter of Carbon Pricing, about how he thinks the shift towards polarization on the climate came about:
Curbelo: “There are many factors... I think, honestly, a long time ago the environment was a unifying issue between the two parties. There was a lot of cooperation... There's a significant history of Republicans making major contributions to climate and environmental policy.
However, in the mid nineties, when Newt Gingrich became speaker that started breaking down. Gingrich picked a fight with environmental groups and that set off a chain of events that really contributed to the polarization that still exists today. Another event that I point to was when Al Gore kind of became the face of American environmentalism”
Jacob: There are MANY reasons why climate change became a partisan issue. We could do a whole episode on just that topic alone. But for now, let’s talk about what Congressman Curbelo just highlighted. He points to two main factors that led to political polarization on climate. First, Newt Gingrich’s anti-regulatory campaign of the mid-1990s. Gingrich helped craft the Republican legislative agenda for 1994, which promoted deeply conservative ideas that made it extremely difficult to enforce environmental regulations, thus alienating much of the environmentalist world. Second, Curbelo notes that Al Gore was the political face of environmentalism and climate activism, and that was only more polarizing for the issue.
Curbelo: “of course I commend him for his activism and for caring about the issue, but I really wish he would have embarked on that endeavor with a Republican partner because it was at a time still after the 2000 election where there were a lot of raw feelings and emotions. And of course a lot of Republicans, and I'm just talking about everyday citizens, I think just assumed that because Al Gore was behind this cause that they needed to be against it or dismissive of it.”
Casey: Alright, well I’ve got a hard time blaming Al Gore for the partisan response to his work raising the alarm on climate change... But it is interesting to think about how different the world could be if he had set out on his climate education campaign with a Republican colleague.
Jacob: Well, regardless of how it happened, it’s clear by the early 2000s that there is a growing partisan divide on the issue of climate change.
Naomi: And from 2003 onward, after the McCain-Lieberman bill, climate conscious members of congress tried again and again to pass carbon pricing legislation. Typically, these bills had a lot of support among Democrats, and a handful of Republican cosponsors. But even the most bipartisan bills didn’t have enough support to pass. They were all either rejected, or never even made it to a vote.
Casey: And so as I remember it, in the 2000s, this is the status quo for a while… Democrats more wholeheartedly supporting carbon pricing measures, sometimes joined by a handful of Republicans. But these proposals don’t seem to gain much traction, and all the while, Democrats are making more and more concessions. For example, that early proposal for a carbon tax from Pete Stark had set a price of $15/ton in 1995… In 2007, Stark proposed a new carbon tax of $10/ton. Five dollars less. Considering inflation and increased awareness on climate damages… that was a MAJOR step backwards.
We talked to David Roberts about this phenomenon of semi-bipartisan climate politics. To remind our listeners, he’s a former energy and climate journalist at Vox, and host and author of the Volts newsletter and podcast. We’ve been talking to David for a while, and in the spring of 2019, we asked him about this Democratic strategy of compromise and what he calls “building a coalition from the center out.”
David: “You start by talking to the business community and talking to people you think are going to be holdouts, talking to conservatives trying to find a solution that is acceptable to people in the center…”
Naomi: Building a coalition from the center out is a search for legitimacy. The thought was that Democrats needed backing from the business community and moderate Republicans.
David: “The legitimacy of business backing, the legitimacy of having a republican sponsor will allow you to start building a Coalition from the center out and eventually get enough people on board to pass it. ...That was the idea and has been the idea for most of the time Democrats have known about climate change, and it, you know, it failed pretty spectacularly in 2009 and 2010.”
Jacob: 2009 and 2010, that’s the Congress elected with President Obama. And David Roberts is referring to the failure of the American Clean Energy and Security Act, a carbon cap-and-trade bill proposed in early 2009.
Naomi: The bill was led by Congressman Henry Waxman and Senator Ed Markey.
Casey: The Waxman-Markey Bill was the last time a carbon pricing proposal came seriously close to becoming law. About 12 years ago. And the results set the stage for the climate policy debates we’re having today. Naomi, can you remind us what happened?
Naomi: The Waxman-Markey cap-and-trade bill passed in the House in 2009. But then when it went to the Senate...
David: “As Democrats sort of sacrificed and sacrificed on the policy, begging for cooperation and when the sort of political heat turned up, all of its supposed Republican friends headed for the hills.”
Casey: This is reporter David Robert’s view from the outside. Let’s hear from someone on the inside. Nat Keohane heads up climate work for the Environmental Defense Fund, a nonpartisan and nonprofit environmental advocacy group. Nat was deeply involved in policy and strategy on the legislative effort that culminated with the Waxman-Markey bill in Congress. He gave us some insight as to what David Roberts meant by “sacrificed and sacrificed on the policy”:
Nat: “It wasn't so much that it got watered down as that the allocation became much more generous.”
Naomi: Nat Keohane is talking about the allocation of permits to emit carbon under the Waxman-Markey bill. As a bargaining chip with industry, the idea was to give away more of the available permits to help companies transition to the new cap-and-trade environment. Initially, this policy would give away 80% of the allowances for free.
Nat: “I remember in the week before it all fell apart… I remember looking at the final versions ‘cause we were calculating what was the value of the amount that was going back to the utilities and so on… and it was exceedingly generous.”
Naomi: But even with lots of free emissions permits for industry, the bill still failed. As David Roberts said…
David: “All of its supposed Republican friends headed for the hills.”
Nat: “If we just look at what happens on June 26, 2009, which is when the Waxman-Markey bill passed the house, and May of 2010 when it finally died... it became clear that it was not possible to get something into the senate in July. So in August, what happens? All the Senators go home for recess, all the members of Congress go home for recess and... That was when the Tea Party first reared its head.
Casey: The Tea Party movement, a political wave of fiscal conservatism that arose in 2009 and over the next decade grew to have major influence in the Republican Party. Now, why did the Tea Party emerge at this moment?
Naomi: So the Tea Party movement kicked off in February 2009 in opposition to President Obama’s response to the financial crisis, and Obamacare. Then, in the summer of 2009, the movement took aim at the Waxman-Markeybill. Nat Keohane explains how it happened.
Nat: “A lot of the focus of the Tea Party, of course, was on health care. But there was a significant focus funded, we now know, by the Koch brothers and Americans for Prosperity and oil companies and so on...very well funded but there was a concerted effort to insert, to inject anti-climate policy messaging in the Tea Party. And by the way, I don't mean to make it all about the nefarious dark money, although it certainly was a part of that. But any approach, even one that I would argue was a very flexible market-based approach, as in Waxman-Markey, was an easy target for people worried about big government. Right? Because even though it was a flexible approach, this is an economy-wide problem, we’re talking about a big new regulatory program, even if it’s a very flexible one to reduce emissions, and so that was caught up in the Tea Party concerns.”
Casey: On one hand, Waxman-Markey proposed a market-based approach, which could have attracted Republican support. But on the other hand, carbon emissions are an economy-wide problem. And a big new regulatory program covering the entire economy, even a market-based one, didn’t sit well with the Tea Party. Especially when big donors were anti-climate. So after the 2009 Congressional summer recess, what happened?
Nat: So members come back in September, especially Republican members, come back hearing a lot of opposition from their constituents.
Jacob: So he’s saying the Tea Party movement caused a bit of a Republican about-face on this market-mechanism?
Naomi: Yes. But it wasn’t just the Tea Party working against the Waxman-Markey bill.
Casey: Right. Remember, 2008 to 2009 is the height of the U.S. recession, which was destabilizing for the entire country, and the new President became a lightning rod for grievances from the Republican Party.
Nat: It’s important to remember that the Republicans were really starting to solidify in opposition to President Obama. So you had that going on as well. The economy is in, not quite free fall, but people are just waking up to how bad the recession is and is going to be. You had just come off the stimulus package and the bailout before that. So all the concerns about government are magnified. So people come back in the Senate in the fall of 2009 and there's no appetite for moving it forward. In fact, Boxer held an EPW Committee hearing to mark up the bill…
Jacob: That’s California Senator Barbara Boxer who was chair of the Committee on Environment and Public Works at the time. She held a hearing to mark up the bill and...
Nat: And no Republicans showed up. They boycotted the hearing.
Jacob: So this was a bill that passed the House with 8 Republican votes in support, but Senate Republicans won’t even sit through the hearing to mark up the bill.
Casey: In 6 years we go from John McCain spearheading a serious cap-and-trade bill, to an entire Republican boycott. Things are not looking good for the strategy of building a coalition from the center out…
Naomi: The center-out-coalition doesn’t work if the center doesn’t hold...
Naomi: Over the late fall and winter of 2009, after the boycott, there’s a re-think and some new cap-and-trade bills are introduced in the Senate. But then…
Naomi: Deepwater Horizon. In April 2010, One of the most technologically advanced oil rigs in the world explodes, killing 11 people. A wellhead almost a mile below the ocean surface is gushing into the Gulf of Mexico. And it just keeps spilling, for 87 days, spreading an oil slick over thousands of miles of ocean.
Jacob: This was so terrifying, I remember it really clearly. There were all these images of birds and other wildlife just covered in oil.
Casey: So explain to us how an oil spill in the Gulf of Mexico affected a carbon pricing bill in the Senate?
Nat: It blew up the prospect of any sort of deal on offshore drilling.
Naomi: Nat Keohane is referring to the fact that Republican lawmakers had wanted to allow more offshore drilling in U.S. waters. Offshore drilling was a likely bargaining chip to get bipartisan support for a carbon pricing bill.
Nat: People have been thinking well maybe part of this is, you know, if you get Republican votes by thinking about offshore drilling, and you do that in return for an aggressive cap on carbon emissions. And then once Deepwater Horizon blew up that was clearly... that was not in the cards.
Casey: So even though Deepwater Horizon demonstrated the worst potential impacts of the fossil fuel industry, to people’s lives, to the Gulf Coast economy, to fish and birds and human health, it might actually have sunk the climate bill? Instead of increasing the sense of import and urgency around passing it?
Naomi: Highly counterintuitive, but yes. Though Nat Keohane actually points to a range of factors that doomed the Waxman-Markey bill...
Nat: Those are all proximate causes, I think the deeper cause really was that we were in the deepest recession since the Great Depression, and that plus the rise of the Tea Party. If you step back and you go all the way back to 2003, which started with Joe Lieberman and John McCain, the fundamental political theory, the political theory of change, the strategy was, that to pass climate legislation in the Senate we're going to need Republican votes, and that to get Republican votes we're going to need support of business. The environmental community pulled that strategy off to a T, I mean executed that strategy really well.
Casey: Waxman-Markey was able to win the support of some big names in business and labor, such as the United Auto Workers Union, General Electric, even Duke Energy. So this could have worked...
Nat: But by the time we got to 2010 the political landscape had shifted and it was no longer the case that having the support of business got you enough Republican votes to pass legislation in the Senate.
Casey: Nat is saying that even though there was substantial business backing for the Waxman-Markey bill, Republican Senators were not on board. The Republican party had solidified in opposition to President Obama, so a Democratic-led, big regulatory bill was not getting through. And that was the end of the Waxman-Markey bill….
[Casey] So Nat Keohane describes the Waxman-Markey era with more…. personal frustration than David Roberts. He was there, working to pass the bill. But even so, he doesn’t really agree with Roberts that the Center-out strategy is a complete bust.
Naomi: Ya, Nat Keohane thinks a Center-out strategy could work, but as the world changed in 2010, the strategy just wasn’t sufficient to get the bill passed. Yet he still believes the best chance for a durable climate policy in the future will be a bipartisan bill. That it's the only way to withstand the inevitable power shifts in Washington. But then David Roberts...he talks about the Center-out coalition-building strategy as though it was doomed from the start. Let’s get back to David Roberts to hear the case against trying to build a bipartisan coalition.
David: So basically all that work to build that Center-out Coalition did not pay off in the expected political protection or… political momentum… that was hoped for. …Despite that total failure in 2010, that's still… I think, the model in most Democrats’ heads, like if you listen to Frank Pallone…
Naomi: Chairman of the House Energy & Commerce Committee…
David: Or even Pelosi, they are still basically using that language. Let's use common sense… solutions that can bring people together across the aisle and Common Sense bipartisan blah blah blah blah blah… Still sort of the model in Democratic heads... It's a model that has stuck in their heads long after it reflected anything in the world or had any evidence, really, in its favor.
Casey: Did President Obama ever get any political or public credit for trying to build a coalition from the center-out?
David: Yeah. That's the thing is... no. You know everybody who watched for eight years, Obama's whole theory of the case was this kind of center-out thing: we have more in common than we have differences
David: And so, he bent over backwards pursuing cooperation. I mean, people forget this because right wing media was so totally dedicated to demonizing him from the second he took office, that of course no one who gets their news from cable news ever really knew this, but if you were paying attention and watching, you saw him trying and trying and trying and trying, willing to sacrifice incredibly significant things for some cooperation, like he pursued a grand bargain on the budget with John Boehner…
Naomi: Then House minority leader...
David: ...forever just begging. And Boehner, you know, he's one of these guys who’s perfectly happy to make deals. But any time he showed any willingness to, the base comes and freaks him out and he bailed--same thing that happened to John McCain and Lindsey Graham.
Casey: And why does David Roberts think that is?
Naomi: He blames the conservative media. He directly credits Fox News with disabling President Obama’s center-out strategy and the bipartisan political momentum it could’ve generated.
David: (4:59) What’s happened ultimately is that the center of gravity, the center of power in the Republican party has shifted to the media. The media now runs things. The media has more access to and influence over the right-wing base than their politicians do so…
Even if the politicians are supportive of Centrist Solutions, or whatever, they can't bring anybody along with them. Right wing media is the ideological enforcer and they have an independent power and if they sic the base on a politician it's miserable for the politician...
Moderate Republican David Frum from the Bush II era put it this way: He said we used to think Fox worked for the Republican party and we found out that the Republican Party works for Fox.
Casey: So journalist David Roberts says that Republicans are being pulled away from centrist solutions by right-leaning media sources like Fox. He feels that the center-out approach is fundamentally flawed.
Naomi: That’s one take on the situation. We’ve also talked with some legislators on the center-out coalition strategy. Last episode we spoke with the Senator from my home state of Rhode Island, Senator Sheldon Whitehouse. We’ve actually interviewed him twice, and you’ll hear tape from both interviews in this episode. Senator Whitehouse has introduced multiple carbon pricing proposals over the last decade, in an attempt to work across the aisle on climate policy. Here he is again:
Whitehouse: I took a look at what I read Republicans proposing in journals and in think-tank conversations and so forth, and the few Republicans that were willing to think this through to a solution came up with a border-adjustable revenue-neutral price on carbon. So, we took a pretty close look at that and said, you know that actually will work. Why come up with something new if that's where they're pointing us? Let's do that.
Casey: And what does he think is standing in the way of getting a bill through?
Naomi: Simply put...
Whitehouse: The fossil fuel industry. They have set up a massive apparatus of fake science, political muscle, propagandizing. People in the scientific line of work have examined this apparatus and you know it’s dozens and dozens of organizations. They seem to be centrally managed...
Naomi: What about non-fossil fuel companies?
Whitehouse: to their great discredit, the rest of corporate America has sat this one out so far. And when they come to Congress they have zero interest in climate policy or climate legislation.
Naomi: So what effect does that have on Congress?
Whitehouse: A Republican who looks for support from Corporate America looks over at the fossil fuel industry and sees these guys looking like warriors with, you know, maces and armor threatening their political careers. They look over at the other side and they hear nothing but crickets.
Whitehouse: Part of the problem at this point I've got nobody to negotiate with on the Republican side. Every single Republican in the Senate has basically been driven away from having serious conversations about climate change and carbon pricing by all these front groups and the political war apparatus of the fossil fuel industry.
Casey: We should note that, since the taping of this interview with Senator Whitehouse, the American Petroleum Institute, or API, has indicated possible support for a Carbon Tax. The API is the largest oil and gas trade association in the United States, so their support for a Carbon Tax would be influential, if it’s genuine. But many critics say that, given the history of fossil fuel lobbying efforts, this kind of statement could just be a form of greenwashing, or an effort to control the climate policy debate to drive toward an outcome they favor, like a very low price on carbon or a political trade for a major regulatory roll-back.
[Casey] Senator Whitehouse thinks that the fossil fuel industry has applied so much pressure to Republican lawmakers, that he has no one to negotiate with. But let’s pause for a second to ask, how can one industry, even a big industry, wield so much power? There are laws that govern lobbying efforts, shouldn’t that prevent this kind of disproportionate influence?
Whitehouse: It's, there's a combination between the old fashioned lobbying, which is reported, quite public, and has some accountability to it.
And then this kind of off the books, political, dark money, muscle machine. And that’s the thing we really have to get our arms around if we’re going to win this.
Casey: This came up both times we spoke to Senator Whitehouse...
Whitehouse: We've lost a decade since the Citizens United Decision of 2010, which really gave the fossil fuel industry powerful new political arms to fight with.
Naomi: Senator Whitehouse is referring to the now infamous Supreme Court decision that increased the limits of political spending by corporations, non-profits, and unions.
Whitehouse: The Citizens United decision was the one that said if you're a big special interest you can spend unlimited money in politics. And it took them about two seconds to figure out how to spend that money anonymously, so it didn't come in saying Exxon or Koch Brothers, it came in saying, Americans for Peace and Puppies and Prosperity or whatever. The Really Smart People Interested in Climate Think Tank Institute.
Naomi: Under Citizens United, governments can’t limit political spending by corporations and labor unions if that spending is technically independent of any candidate campaigns or parties. Basically, it’s a big loophole.
Casey: What effect does this unlimited ability for special interests to spend money have on issues like climate policy?
Whitehouse: Once you have the power to spend unlimited money, once you’ve got the ability to spend it anonymously, it's incredibly easy just to threaten and promise and push people around and, sweet deal, you don't even have to spend the money if they believe the threat.
Casey: Naomi, what does he make of the fact that so many oil companies—Exxon, BP, Shell—have called for putting a price on carbon, and yet, at least until very recently, the fossil fuel trade organizations have lobbied against it?
Naomi: Right, it’s a good question. Senator Whitehouse sees two potential explanations.
Whitehouse: It's a little hard to tell. The bad news scenario is that these organizations have been lying about climate change and the dangers of their product for so long that all the ordinary corporate sinews of honesty have collapsed and they basically lie at will and they’re just continuing to lie... And the last stage of climate denial is to falsely claim to support a price on carbon while funding all these terrorizing groups that prevent that very thing from happening. ... That’s the bad case, and it’s one that’s very credible given their past behavior.
Casey: That’s the bad news scenario… What about the good news?
Whitehouse: The good news case is that they have set this enormous armada of political warfare in motion. They've made the decision to at least think about changing their policy. They're figuring out how to try to undo the zombie apparatus that they have built and it's a matter of time until the nominal switch that they have announced actually gets implemented. And I think there's probably a little bit of both in the story. But I really can't tell. You need to put a lot of people under oath to figure that out.
Casey: This is so interesting. Especially in light of the recent announcement we mentioned by the American Petroleum Institute--the key fossil fuel industry group--indicating openness to carbon pricing. How should we interpret that? Is it the beginning of the switch Senator Whitehouse mentions? After the decades of work they’ve put into fighting climate legislation, how hopeful should we be that this indicates a real change of heart?
Naomi: Well around the time we interviewed Senator Whitehouse, there were some other shifts in the stance of industry towards carbon pricing… In 2019, an organized effort of more than 75 businesses went to Capitol Hill to demonstrate their support for Carbon Pricing. Big companies, representing more than $2.5 trillion dollars in assets. And a new initiative, known as The CEO Climate Dialogue, has brought together 25 CEOs of Fortune 500 companies like DuPont, Ford, even BP and Shell, all of whom support an economy wide price on carbon.
[tone shift] There are politicians who feel that the political tide is shifting for climate action, and some are even working to manifest that change:
Carlos Curbelo: “...during my time in Congress, I really became an environmentalist and dedicated a plurality of my time and resources while serving to solving for climate change and to trying to depoliticize the issue, and establish a healthy dialogue and cooperation between Republicans and Democrats.”
Jacob: That’s Carlos Curbelo again, who we heard from earlier. He served as a Republican representative for Florida’s southernmost congressional district from 2015 to 2019. He is a founding member of the Climate Solutions Caucus, a bipartisan effort to depoliticize and act on climate change.
Curbelo: “I established together with my colleague from the Palm beach area, Ted Deutsch, a Democrat, the house climate solutions caucus, and that became the first ever internal organization in Congress to address climate change in a bipartisan way. It started off very small and modest. It was just me and Ted for a while. And then, at the end of the 114th Congress in 2016, we had 20 members, 10 on each side, which we were thrilled about. And then in the next Congress, 115th, the group swelled to 45 Republicans, 45 Democrats, went from just being a place to have a dialogue and discussion, to an organized voting block. And we actually defeated anti-climate amendments on the floor of the house for the first time ever under Republican majority.”
Casey: So Jacob, does that mean the case for bipartisan action on carbon pricing is back on the table?
Jacob: Well, Congressman Curbelo certainly believes it is. We’ll hear more from him in episode 6, the Conservative Case for Carbon Pricing. His work in Congress has helped to revive the bipartisan push for carbon pricing legislation.
Casey: That brings us up to the present, recording this in Spring 2021 . Let’s recap the episode so far, before we move to Act 2. In the 90s, partisanship started to take hold of US climate politics, so in the early 2000s, Democrats focused on building coalitions from the political center to try to pass carbon pricing policy. But that center-out strategy struggled in the late 2000s with the Waxman-Markey bill. The combined effects of the Tea Party, Deepwater Horizon, the financial crisis, and Republican unity against President Obama made it impossible to pass carbon pricing legislation in 2009 and 2010. In the decade since, right-leaning media and fossil fuel lobbyists have stifled the passage of climate bills, but there are renewed bipartisan efforts to promote carbon pricing policy.
That brings us to ACT II. Jacob?
Jacob: ACT II: What’s the deal with national carbon pricing policy today?
Casey: Jacob is that a seinfeld joke like, “Hey, what’s the deal with National Carbon Pricing Policy these days?”
Jacob: Casey, you know I would never do something like that.
Casey: A seinfeld fan you are not, of that we are sure.
Jacob: No seinfeld references for you!
Casey: No seinfeld references for you!
Jacob: We talked to Susanne Brooks of EDF, who you heard from in Episode 1, to learn more about this renewal of bipartisanship on carbon pricing policy:
Susanne: The first thing to say is that it's really exciting that there's so many carbon pricing bills that are being put on the table.
Jacob: In the last Congress, which wrapped up in January 2021, there were 11 different carbon pricing bills in play. There’s the Whitehouse bill (that’s our guest, Senator Sheldon Whitehouse from Rhode Island, not the one on Pennsylvania Avenue), the Van Hollen-Beyer bill, the Deutch-Rooney bill, the Coons-Feinstein-Panetta bill, the Rooney-Lipinski bill, the Lipinski-Rooney bill, the Larson bill, the Fitzpatrick-Carbajal bill, the --
Casey: Alright, Jacob, maybe we should hold it there...
Jacob: Did I say the Rooney-Lipinski bill? Cuz there are actually two of those--
Casey: Ya I’m pretty sure you got that one. Actually, is that different from the Lipinski-Rooney bill? Because --
Naomi: Hey just gonna chime in here and shut this down. Thanks.
Jacob: Okay well long story short… there were a ton of proposals on the table last year! And some are likely to make a comeback this year.
Susanne: A lot of these bills are bipartisan as well… We saw the first carbon pricing proposal from a Republican in nearly a decade from Carlos Curbelo and his co-sponsors and since then, you know, we've had other Republicans stepping up and joining Democrats in introducing meaningful carbon pricing policies.
Jacob: Congressman Curbelo introduced the MARKET Choice Act in 2018, a Carbon Tax bill. And Republican Congressmen Francis Rooney and Brian Fitzpatrick each introduced their own bills as well.
Susanne: Some key similarities between these bills… One is that they all cover the vast majority of pollution sources in the country. So all of these bills are covering something like 80 or 85 percent of greenhouse gas pollution in the country. I'll also say that all of them have some kind of provision included to protect low-income households from changes in Energy prices.
Casey: So there are some important similarities -- coverage of pollution, provisions to protect low-income households… What are the key differences in the proposals?
Jacob: For one thing, 10 proposals use the carbon tax approach, often called a fee instead of a tax. And only 1 uses cap-and-trade. That’s Senator Chris Van Hollen’s and Congressman Don Beyer’s bill. Their bill distributes the revenue directly to households so they call it a “cap-and-dividend” bill. But every bill treats revenue distribution slightly differently. Susanne Brooks tells us more.
Susanne: There's a wide range of revenue use, from spending on infrastructure to payroll tax reductions to this idea of an equal lump sum dividend or rebate back to households.
Jacob:Revenue use is one of those policy details that can completely shape the impact of a carbon pricing bill. Certain bills propose sending all the money back to taxpayers, while others include a rollback of federal taxes. Some bills invest in infrastructure and highways… Revenue distribution can address issues of equity and justice and can help make carbon pricing policy even more effective at reducing emissions. In Episodes 5 and 6, we’ll hear from Progressives and Conservatives about how they would design the ideal carbon pricing policy, and what a big role revenue use plays.
Casey: Okay, so there are lots of different options for spending the revenue. How about making the revenue in the first place. How do these bills deal with setting a carbon price?
Jacob: Great question. The carbon prices in these bills range from $15/ton to $52/ton. Check out episode 2 to learn more about their economic underpinnings. It’s also important to note that these prices, once set, evolve over time. Let’s go back to Susanne Brooks.
Susanne: Another sort of key difference is the trajectory of the overall price path. Some of them start with a higher price and rise relatively slowly. Others start with a lower price and rise more quickly.
Casey: Right, let’s remember it’s not just about the price level but about how the price will change over time. You could start low to let the economy adjust, then ramp up. Or, you could argue we don’t have time to wait, and need to start with a relatively high price.
Then my next question is, how do these bills deal with any existing greenhouse gas regulations? I mentioned regulatory roll-backs earlier when talking about the American Petroleum Institute. So do any of these bills roll back existing regulations?
Susanne: One of the key issues that comes up is the interaction between that new policy and existing regulations. And whether those would still be needed in the face of a new carbon pricing regime. So some of the bills, some of them are silent on the sort of interaction between the carbon pricing program and existing policy... others include, you know, include provisions to put a pause on some specific regulations that cover sources of pollution that are also covered by the tax, and importantly, one thing I’ll note is that the bills that put this pause in place, that have been put on the table in this congress -- they all include mechanism to bring those regulations back if the pollution reduction goals in the bill are not being met....
Casey: This idea is all about keeping our eye on the prize. If the policy isn’t working to reduce emissions, we could ramp up the use of standards and other regulations, but if it is working, we could relax some regulations.
[Casey] These policy details can feel dense, but they are important to understand. The details can make or break whether a bill is politically-viable, economically-feasible, and effective at reducing emissions. And perhaps the most important question is whether a policy ensures a just outcome for people most affected by fossil fuel emissions.
Casey: There are a lot of carbon pricing proposals out there right now. It’s honestly hard to keep track of them all! To learn more about the many Carbon Pricing bills in Congress in recent years, check out the supplementary reading on our website.
But now it’s time to take a look towards the future. Even as bipartisan support for carbon pricing has grown, a new movement on climate action has emerged from the political left. This new approach is known simply as “the Green New Deal.” And we’re going to devote the last third of the show to it. So here we go:
Act III: The Green New Deal
[Many reporters saying “Green New Deal” on broadcasts]
Naomi: The Green New Deal is a massive economic mobilization effort focused on clean energy, green jobs, and support for the frontline communities most affected by climate change. We asked Saya Ameli Hajebi to describe the Green New Deal for us. When we interviewed her, Hajebi was one of the leaders of the New England Chapter of the Sunrise Movement, which mobilizes young people around the Green New Deal.
Saya: The truth is we cannot address climate change without addressing the economic and racial disparities that we have in our country right now.
And that's what the green new deal is doing. The green new deal is a program to really invest in the American people, invest in the economy, invest in those low income frontline communities that are going to be hit the hardest by climate change.
Casey: So there are two big ideas on the climate policy table. Idea A) Put a price on carbon. And then you’ve got Idea B) massive investments to transform infrastructure in the United States, and to create high-quality jobs while decarbonizing the economy. Idea A, Carbon pricing, is the favorite of most economists, built to decarbonize the economy at the lowest possible cost and with the least amount of regulation… Even though it’s originally a conservative idea, it has been supported by some progressive legislators in Congress. In recent years though, it’s been met with growing criticism from the left, especially from environmental justice groups. Many progressives are opposed to the concept of carbon pricing, which we’ll learn about at the end of this season. And this opposition is part of what gave rise to the Green New Deal.
Naomi: Let’s return to David Roberts to talk about the origins of today’s Green New Deal resolution. He picks up with young people’s reaction to the failure of the Waxman-Markey bill in the Senate.
David: So a bunch of young people, young activists, saw this. They came of political age during Obama and their whole political life has been total Republican intransigence on this and almost everything else. They've never experienced or witnessed anything else. This whole notion of starting in the center and working with moderate Republicans is like weird storytelling to them. It's like a weird... It's like people telling tales from olden times. They have never seen that and they have no reason to believe that it’s forthcoming. And that’s what they all sort of say, is “our whole life is the Republican party is an obstacle. An unyielding obstacle that it’s pointless to shout at.” It's like a big granite wall you're shouting at it to no effect, and we’re just sick of shouting at it, so we got to do something else.
Naomi: David Roberts says this led many young activists to organize around Bernie Sanders’ 2016 Presidential campaign. After Sanders’ campaign, some activists formed the Justice Dems organization and recruited left-leaning candidates like Alexandria Ocasio-Cortez to run on a Green New Deal platform.
David: So when a bunch of their candidates got elected, this is their approach, this is the thought: We got two years now while Trump is still president and Republicans hold Congress where nothing's going to happen. Nothing's going to pass. So let's use those two years to develop a bold climate policy plan that actually does what the IPCC says needs to be done. I just remind people, however all this turns out, that alone is a remarkable development. That a solution equal to the problem is actually on the table.
Casey: But the Green New Deal resolution is not actually a fully-developed policy proposal, per se. To our listeners, we encourage you to read the full text, linked on our website -- the Green New Deal is a brief and important read. Only about a dozen pages. When the Green New Deal was originally proposed, it left out the concrete policy details. Naomi, why was that?
Naomi: Well, it was intended to be a vision statement. Listen to David Roberts talk about the Green New Deal’s initial strategy:
David: The strategy was, we’ll use these two years to develop a set of policies, a policy blueprint that can do this, but we'll start here at the beginning by introducing a non-binding resolution that says, ‘these are our goals with this policy development process and these are the principles that we're going to abide by as we develop policy.’
Naomi: Now, this approach was initially met with some skepticism from the Democrats in Congress who are champions of carbon pricing, including Senator Whitehouse.
Whitehouse: I mean Green New Deal is not even really a framework yet. It's just kind of an organizing idea. But if somebody tried to write it into a piece of legislation, you know, then you could evaluate it and see how it works. At the moment you can pass a Green New Deal referendum saying we endorse the concept and it doesn't change the trajectory of climate change one iota. What changes the trajectory of climate change is changing the economics of climate change and that's where the carbon price is the, to me, essential component.
Naomi: Okay, so, let’s try to understand why the strategy of the Green New Deal is so distinct from the strategy behind the recent proposals that focus on carbon pricing. Roberts describes the important difference of the Green New Deal’s political strategy:
David: The political strategy is, we're not going to get any Republicans. That’s the thinking. Republican cooperation is off the table. So, if you can't persuade Republicans, how do you create a force necessary to get this through Congress?
Casey: How indeed?
Saya Hajebi: Throughout American history it's been a recurring theme to have social movements rise up and have people really change the role of government and get people rights through standing up and making our voice heard.
We're getting thousands and thousands of young people. And we're taking the matter into our own hands.
Casey: By way of example, we asked Saya Hajebi about how her Sunrise chapter is organizing to fight climate change. She told us about trying to convince Massachusetts Speaker of the House Robert DeLeo to sign a no-fossil-fuel-money pledge.
Saya Hajebi: We had a bunch of songs that we practiced the day before but one of them was like “The light is returning even though this is the darkest hour. No one can hold back, back the dawn” which I mean like blew me away. Right? Just imagine like 25 people in this hallway at the Massachusetts state house... Just singing that and we were being so loud and so energetic and people passing by us whether they were tourists or they were just heading through maybe they were lobbying for something they were looking at us and they're like, wow, do you want to join that?
David: So, the idea is we will build a popular movement behind a comprehensive set of solutions. We will bring all Dems along with us, because it’s going to be their base, their people that are riled up. And we're going to get so much popular support that instead of persuading these purple state and purple district Republicans, we’re just going to scare the crap out of them and force them to come along.
Naomi: Instead of a center-out coalition, this is an outside-in strategy. Get Climate Change policy passed by generating enormous public support.
David: There's not enough insider power to make anything happen, so they're coming from the outside. That's the idea. We're going to bring an exogenous force to shake up the status quo; the force being a bunch of people.
Casey: I think the big question here is whether sit-ins and people in the streets are enough? How do activists plan to translate that force into power?
Naomi: Well to some extent, they already have… The Green New Deal has generated enormous political momentum. Its resolution has over 100 cosponsors in Congress. And it won the support of nearly every major Democratic Presidential candidate in the 2020 race. Even President Biden, who was originally billed as a more centrist candidate, has based most of his climate plan on Green New Deal principles. The podcast “How to Save a Planet” gives an excellent overview of this political shift in their episode “How 2020 Became a Climate Election.”
Casey: So, I take your point. Over the last two years, climate activists--especially young people--brought climate policy to the center of the national political debate in a way we’ve never seen before. They helped Democrats win the White House and gain--razor thin--majorities in Congress. And President Biden is now doing all he can with executive action and appointments. Mark those as real victories. People in the streets works. Now I’m asking, what will it take to get meaningful legislation passed, and what will that legislation look like?
Casey: When we spoke to Senator Whitehouse most recently, before the 2020 election, he described for us his vision for climate policy under a Democratic administration. Senator Whitehouse alludes to the possibility that there may be room for a Green New Deal and a carbon price:
Whitehouse: I think a carbon price is going to be the, you might say the center pole of the tent. There might be a lot of other poles that hold it all up and add value and make it stronger. But I do think that without a carbon price, the idea of being able to pull off, staying at 1.5 degrees just doesn't seem credible….
And around that pole, are a whole variety of other supports that build a clean grid, redo a lot of our inefficient buildings, build out the infrastructure for electric cars, rebuild coastal infrastructure to meet the needs of sea level rise, and all of that packages together into an enormous amount of infrastructure work, that will power up the economy in a whole lot of ways. So you get the win-win of the innovation that comes from having knocked out the big crooked fossil fuel subsidy with a carbon price, and you get all the supports of putting people to work very quickly, doing the stuff that needs to be done now on an accelerated basis to both meet the climate crisis where its coming at us, and to abate the climate crisis by reducing the hazard.”
Casey: To Senator Whitehouse, a carbon price is still the center pole of the climate policy tent. To other politicians, that approach just doesn’t cut it. But for any of these policies to work, whether that means a carbon price or infrastructure investments or renewable energy development, they will need support from a lot of lawmakers. And whether climate solutions come from the political left, right, or center… they need to happen. And quickly.
Over the next two episodes, we’re going to try to answer a really big question: Where does carbon pricing fit in the future of climate policy? Depending on who you ask, you might get very different answers…
Jerry Taylor: [32:12] “...for a lot of Republicans, carbon pricing, simply fixing price signals and using that as the main mechanism by which we drive de-carbonization is something that's reasonably attractive.”
Keya Chatterjee: [6:59] “I think that for most of our members, just to be totally honest, there isn't an equitable way of doing a carbon price. There simply isn't.”
Jacob: Join us next time for “The Conservative Case for Carbon Pricing.” We’ll talk to right-leaning legislators, activists, and policy analysts about where they stand on carbon pricing, and why.
Naomi: And stay tuned for the last episode of the season -- “Carbon Pricing through a Progressive Lens.” We’ll hear from progressives as they make the case for, and against, carbon pricing policy.
Casey: This is Pricing Nature. To get in touch, email us at firstname.lastname@example.org. And don’t forget what the kids are telling us:
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Casey: This episode was written by Jacob Miller, Casey Pickett, and Whitney Mann, with help from Ben Linthicum, Naomi Shimberg, and Maria Jiang. Special thanks to the Carbon Pricing Leadership Coalition, and also to Tom Erb, Lily Svensen, Jen Tom, and Phil Wong. Sound engineering by Jacob Miller. Original music by Katie Sawicki. And a final thanks to Ryan McEvoy, Stuart DeCew and Heather Fitzgerald for making this episode possible.