–Tobacco case law used to defeat carbon price
–Fee and dividend systems need widespread education
By Mathew Carr
Feb. 14-19, 2022
There’s doubt whether the US is able to widely deploy the social cost of carbon price, put in place on Jan. 20, 2021, even if Congress approves the country’s climate-action plan.
Ten “plaintiff states” of Louisiana, Alabama, Florida, Georgia, Kentucky, Mississippi, South Dakota, Texas, West Virginia, and Wyoming successfully sort an order seeking “declaratory and injunctive relief” from the use by “government defendents” of the social cost of carbon, or SCC. See court document for download in notes, and snip below for definition.
Judge James D Cain, a Trump appointee, agreed with the states.
The relief granted is for when government agencies under President Joe Biden use the SCC “when monetizing the value of changes in greenhouse gas emissions resulting from regulations and other relevant agency actions.” That is, when the government seeks to put a price on carbon.
In part, the Republican Party-leaning states argued the Democratic Party-based or overseen “Government Defendants acted beyond any congressional authority by basing regulatory policy upon global considerations.“
[We wouldn’t want to go and save the world now, would we!? sigh]
Controversially, the states invoked case law from 2000, where the Food & Drug Administration was not allowed to regulate tobacco products, to win their argument earlier this month.
The Social Costs — Defined
In the meantime, an interagency task force in the U.S. is nearing a decision later this month on where to set the social cost of carbon. Biden was to implement the metric applied under President Obama, which was $51 per metric ton, Axios reported.
See this section of this paper, which you can download below:
The upper end of the $50–$100/tCO2 range for the target-consistent price level in 2030 estimated by the 2017 High-Level Commission on Carbon Prices, the Stern-Stiglitz Commission (Stern et al., 2017), should now be interpreted as a minimum.
Kaufman et al. (2020) have produced estimates of carbon price pathways using what they call a Near Term to Net-Zero (NT2NZ) approach. Their estimates of the NT2NZ price of carbon are higher, as they reflect the most recent climate target of net zero by 2050. They estimate a price of carbon of $77–$124/tCO2 in 2030.
That is a much higher range than the interim values produced by the Interagency Working Group (IAWG) on the social cost of carbon from $62 by 2030 to $85 in 2050 (assuming an average discount rate of 3 percent)—values far lower than those needed to limit warming to well below 2°C or reach net zero by 2050, let alone today’s stronger ambition to limit warming to a rise of 1.5C, according to the paper.
In the European Union, the price is already at the equivalent of about $101 per ton, so near the middle of the NT2NZ range.
In Europe and other countries, carbon prices can provide a “dividend” to be used by governments to protect the poor.
PEOPLE ARE BEING MISLED
See this from CtizensClimateLobby.org:
A new study published in Nature Climate Change made some waves with its assertion that dividends do not increase the popularity of a carbon price.
The reason — somewhat buried in the paper and associated stories from the Atlantic and David Roberts’ Volts newsletter— is that citizens in countries with carbon fee and rebate systems tend to overestimate their carbon costs.
CarrZee Note: That’s because carbon pricing is being demonized and the cowardly politicians are letting it happen. Middle classes who can afford to go green should face higher costs if they want to stick with dirty energy. That’s how the new system is meant to work. Upper middle class people, especially, will pay more unless they choose cleaner suppliers. So, they should choose green to save cost and speed the energy transition.
The paper (above) notes of carbon fee and dividend in Canada:
“The policy is highly progressive, with 80% of households receiving more in dividends than they pay in carbon taxes … Canadians who learned the true value of their rebates were significantly more likely to perceive themselves as net losers even though most Canadians are net beneficiaries.”
See these talking points to make carbon pricing politically acceptable:
Colorado legislators Edie Hooton and Judy Amabile are working toward joint resolution R22-0283 – Congress Enact Carbon Fee, according to the Loveland Reporter-Herald. As the name implies, this resolution urges the U.S. congress to implement a fee on carbon.
Interestingly, a carbon fee & divdend policy (where carbon revenue is returned to the public) is also inherently conservative. The policy promoted through CF&D:
• Is rooted in conservative values. Values that promote free enterprise using a market-based approach. This is the underlying driver of the conservatives who initially developed the CF&D concept (including, James A. Baker, Henry M. Paulson Jr., George P. Shultz, among others who served Presidents Bush and Reagan).
• Doesn’t burden American industry with more regulations. Businesses prefer a carbon price to other climate solutions because they remain financially stable while they adjust their operations, thanks to a predictable and gradually rising price on carbon. The Business Roundtable, the American Petroleum Institute, the CEO Climate Dialogue, and the U.S. Chamber of Commerce, to name a few, have expressed a preference for carbon pricing.
• Prevents yielding unilateral authority to any government entity. A carbon fee will accelerate creative solutions in a new energy market. It encourages innovation, and as such, it does not pick winners and losers.
• Is endorsed by a coalition of 20 national faith organizations, which includes the United Methodist Church, the Presbyterian Church, and Young Evangelicals for Climate Action.
• Preserves energy independence through technical innovation here in America.
• Can provide job training and transition support to displaced workers.
• Doesn’t fuel government growth because it returns most of the revenue to the American people.
• Provides the potential for millions of new jobs that will transform our economy and put Americans to work. Over 3,500 economists throughout America endorse the CF&D policy.
If you are concerned about climate change and want to see a bipartisan solution, please contact your state and federal congressional representatives, and ask them to support a carbon fee and dividend policy. Regardless of your political affiliation, the time to act is now!
(Adds messaging on fee and dividend; corrects conversion of EU carbon price, adds more from litigation document, case law, context, price seen “doubling”)