NEWSLETTER VOLUME 1 : ISSUE 2: APRIL 2017
Welcome back to the CCA newsletter for our second issue. In these pages you’ll find accounts of our most recent activities, featuring ongoing developments with our Lowcounty sea rise study. And from our newsroom, read reports on a carbon tax proposal from the Climate Leadership Council, on the acceleration of the renewable energy economy, and on congressional Republicans forming alliances in the interest of climate legislation. You can also make the acquaintance of our newest staff member, Director of Operations Jessica Fletcher.
COMMON GROUND ON CARBON REDUCTION
James Baker speaks in Washington, D.C. at the National Press Club to unveil the plan on February 8th, 2017.
The energy sector has been driving domestic economic growth in recent years, and shows little sign of slowing. Along with increased production of fossil fuels comes a responsibility to control CO2 emissions. Time and again, pro-regulation pressure from politicians, citizens, and scientists has come up against pro-growth interests. Fortunately, there is a way to satisfy both groups by implementing a carbon tax, which would reduce CO2 without slowing the economy. The Carbon Dividends Plan (also known as the Baker-Shultz Plan) put forth by the Climate Leadership Council last February aims to do just this. The proposal speaks the language of Republicans and Democrats alike, and consequently has garnered bipartisan support. With this initiative, legislators have an opportunity to significantly grow the economy without expanding the size of government.
A major strength this proposal is its revenue neutrality. Baker-Shultz would tax fossil fuels at whatever point they enter the U.S. market, whether they are produced domestically or abroad (by countries without their own carbon tax). A tax of $40 per metric ton of carbon would create an estimated $200 to $300 billion in annual revenue. To offset potential rises in fuel prices resulting from the carbon tax, citizens would be given annual rebate checks: $500 for individuals, and $2,000 for families of four, for example.
The economy would also be stimulated by higher employment in the renewables sector, which would benefit from fairer competition in the energy market. A case in point is the recent study by Regional Economic Modeling, Inc., which found that by 2025, a revenue-neutral carbon tax in the U.S. could create 2.1 million jobs, increase GDP by $80 billion, and prevent 13,000 premature deaths resulting from poor air quality.
At the February 8th press conference where the plan was announced, former Treasury Secretary Hank Paulson stated: “This is a fundamentally conservative plan—one that showcases the principles of free markets and limited government.” Editorial boards of major publications agree: Barron’s remarked: “The carbon tax could be a highly desirable improvement in the U.S. fiscal system. Unlike most federal taxes, it would be an incentive for economic efficiency.” Bloomberg wrote: “the idea of a carbon tax, long favored by economists as the most straightforward way to address climate change, could gain traction as part of a broad tax overhaul on Capitol Hill.” According to the USA Today, “the Baker plan represents a significant Republican-led effort to address climate change, one that's more than a lot of hot air.”
Health care, immigration, and trade can be a minefield when it comes to policy making. But the Baker-Shultz proposal is unique in its ability to bring the parties and the country together, with broad social benefits and a substantial economic upside. This is a chance to not only capitalize on the core principles of both parties, but to do so in a market-friendly way that tackles the very environmental concerns that world leaders are looking to the United States take leadership on.
Environmental stewardship was once a bedrock principle of the Republican Party. In the 1970s, President Nixon created the Environmental Protection Agency and the National Oceanic and Atmospheric Administration. Since then, a fear of overregulation has driven a wedge between the parties on the issue of the environment. Now, the possibility of cooperation has a lodestar, as Baker-Shultz offers a framework for significant carbon drawdown combined with economic growth.
THE GREEN ECONOMY IS PICKING UP SPEED
Technicians installing panels at a solar park in Germany. (Sean Gallup/GETTY IMAGES)
The renewables economy in the United States has been showing real promise as both a jobs creator and as a spur to economic growth. Jobs in the clean energy sector currently outnumber those in the fossil fuel industry five to one. Nearly one million Americans work in the clean energy sector, and if those who work in the industry indirectly or part time are included, the number jumps to nearly three million. Renewable energy is a more labor-intensive form of energy production than are fossil fuels, and for that reason job growth in the industry is and should remain robust. For example, coal output in the U.S. rose by nearly one third in the past two decades, while employment in the coal industry has fallen by half. Conversely, one out of every 50 new jobs in the U.S. was in the solar industry, which is growing 17 times faster than the U.S. economy as a whole.
The trend is showing no signs of tailing off. In fact, energy efficiency employers are projecting a nine-percent growth rate over the next 12 months, which is the highest estimated for any sector. The fossil fuel sector reported a negative growth rate of about three percent during the same period. When considering that these jobs are also local, cannot be easily exported, and pay wages above the national median, the need for policy that encourages development in the clean energy sector is clear to be seen.
For this reason, CCA is actively involved in an important bi-partisan opportunity to foster a cleaner and more competitive energy sector. The Master Limited Partnership Parity Act (“Parity Act”) was sponsored by Senators Chris Coons (D-DE) and and Jerry Moran (R-KS). It was first introduced in the 113th Congress, and its reintroduction is pending in the 115th. This bill would simply amend the tax code to allow alternative energy sources to acquire the same legal structure that has been afforded to the fossil fuel industry.
These types of policies not only create good-paying, local jobs, but also increase the sustainability of every sector that interacts with the burgeoning clean energy economy. From our homes, cars, and businesses, and the materials used in their production, to the household products we purchase, the positive influence of clean energy can be seen on a very concrete level. The renewables initiatives supported by policies such as the MLP will keep energybills affordable, while ensuring that clean energy continues to cost less than fossil fuels.
President Trump’s pro-carbon Energy Independence Executive Order signed in March has created an extra incentive to invest in clean energy. The reduced emissions controls and support for fossil fuels entailed in the order can be counteracted by green energy's continued growth. Private investment and the increased affordability of alternative energy should usher the sector along to consistent productivity, ensuring we have access to cleaner air, safe water, and high-quality jobs.
 U.S. Department of Energy, Energy Information Administration, Annual Energy Review 2006 (Washington, DC: 2007); U.S. Department of Labor, op. cit. note 4
HOUSE REPUBLICANS MAKE THEIR CLIMATE PITCH
Representative Carlos Curbelo (R-FL) with members of the Climate Solutions Caucus at a news conference in March. (Photo by Hannah Hess/E&E News)
With the change of administrations in Washington earlier this year, the environmental community braced for an assault on decades of federal efforts to regulate hydrocarbons. Expectations were met when on March 28th President Trump signed the Energy Independence Executive Order, whose provisions undo several regulations that limit greenhouse gas emissions, prevent air and water pollution, and require environmental impact assessment. While many of the order’s provisions are likely to be challenged in court, there is little doubt that the climate movement’s momentum at the federal level has been checked for the time being.
Contending with an executive branch led by climate skeptics, and a judicial branch apparently holding a thin majority against climate policy (judging by the Court’s staying of the Clean Power Plan last year), we now look with cautious optimism to Congress for commonsense leadership. With Republicans holding majorities in the House and Senate, little progress would at first appear likely.
On the other hand, a significant number of Republican legislators have recently championed pro-climate legislation as compatible with conservative values. In 2015, a resolution (H. Res 424 (114th)) was introduced by Representative Chris Gibson (R-NY), “[e]xpressing the commitment of the House of Representatives to conservative environmental stewardship.” Elaborating on this pledge, the resolution proposes “working constructively…to create and support economically viable, and broadly supported private and public solutions to study and address the causes and effects of measured changes to our global and regional climates, including mitigation efforts and efforts to balance human activities that have been found to have an impact.” With 16 Republican co-sponsors, the resolution was remarkable for its boldness in countering the party line. The nonpartisan Citizens' Climate Lobby praised how it “represents a major breakthrough among Republicans and offers the hope that Congress can soon work toward enacting a bipartisan solution.”
Reintroduced in the 115th Congress as H. Res 195 by Representative Elise Stefanik (R-NY), the resolution still has 16 Republican co-sponsors, notably including three first-term legislators (Don Bacon (NE), John Faso (NY), Brian Mast (FL)), and three with at least one term served who had not co-sponsored the initial resolution (Mark Amodei (NV), Barbara Comstock (VA), Mia Love (UT)).
Also lending hope to the possibility of bi-partisan support for climate legislation is the Climate Solutions Caucus. Co-chaired by Florida Representatives Carlos Curbelo (R) and Ted Deutch (D), the Caucus, which now stands at 34 members, will maintain an equal number of Democrats and Republicans. Its statement of purpose reads: “The Caucus will serve as an organization to educate members on economically-viable options to reduce climate risk and protect our nation’s economy, security, infrastructure, agriculture, water supply and public safety.”
Such declarations, while encouraging and potentially influential, will remain just that until sufficient numbers of Republicans can be attracted to a green voting bloc that currently lacks crucial votes. Assuming that the House would have at most 197 votes in favor of climate legislation, advocates would still be 21 votes short of the 218 needed for a majority (assuming all vacancies will be filled, and no abstentions), not to mention the Senate. But we shouldn’t underestimate the influence a bi-partisan coalition such as the CSC, and a groundbreaking resolution such as Stefanik’s, could have on fellow congresspersons as acceptance of the facts of climate change continues to grow.
 (176 Democrats (194 less the 18 currently in the Blue Dog Coalition) and 21 Republicans (17 sponsors of the Stefanik Resolution, in addition to four on the CSC who have not yet co-signed with Stefanik))