Businesses put a price on pollutants

With the increased frequency of extreme weather causing disruption in supply and production chains, climate change is the biggest threat to business continuity. So perhaps it should not be surprising to see businesses leading efforts to address the problem.

This Thursday, members from the American Sustainable Business Council (ASBC) will come together to discuss policies that represent their business interests in a sustainable economy. Comprised of over 200,000 member businesses, one of ASBC’s main focus points is climate change and the threat it poses to our future economic stability.

{mosads}While there is no silver bullet for solving this problem, there are several mechanisms that ASBC members are pointing toward for a low-carbon future. In the past, putting a price on pollutants has proved to be one of the more effective ways to decrease emissions. Putting a price on carbon should be viewed the same way. Members within ASBC believe that instituting a price for carbon would create the market mechanisms needed to further push readily available alternatives in energy production and consumption.

In North America, carbon pricing policies already exist in British Columbia and Colorado, in addition to cap-and-trade-based mechanisms in the Northeast and Pacific states. In British Columbia, Canada’s third largest province, the revenue-neutral scheme is supported by a majority of the voters and has resulted in a 4.5 percent per capita drop in fuel consumption. The city of Boulder, Colo., has issued a $7 per ton tax on electricity produced by fossil fuels. This tax has generated over $1.8 million annually and has prompted consumers to switch over to Colorado’s growing wind energy sector. Many hope these efforts will provide an effective model for a federal price on carbon emissions.

Unfortunately, the Obama administration may be forced to put its legislative climate action plans on hold due to the impending Republican-controlled Congress. While the Republican leadership claims no knowledge of the science, the Intergovernmental Panel on Climate Change calls for immediate action. Currently, Republican Sen. James Inhofe of Oklahoma is positioned to take over the Committee on Environment and Public Works. During his last term as the committee’s chair, Inhofe sought to gut the Environmental Protection Agency (EPA) and led a lonely crusade against an “environmental-liberal conspiracy.” With the turnover of the Senate, it seems that climate deniers are about to have their day in the sun, and hope for pricing carbon on a federal level seems all but impossible at this time.

However, there is still hope for business-led action on pricing carbon at the state level. In his June 2013 speech at Georgetown University, President Obama acknowledged both the needs and challenges for mitigating carbon on a federal level, but he highlighted the efforts of states that have already taken steps to meet emissions targets. Massachusetts, Vermont and Oregon are currently leading the conversation about state implementation of a carbon tax. The current form of the Massachusetts bill being proposed by State Sen. Michael Barrett (D) is a revenue-neutral tax. Revenue neutral means that any proceeds of the tax would be paid out in dividends to taxpayers (including businesses) and potentially finance some public works. Vermont aims to build a greener economy by cutting other energy taxes and implementing the tax on carbon at the source. Oregon is taking a more conventional approach by calling for a standard revenue-generating tax in order to supplement the lack of a sales tax in the state.

Massachusetts is looking to be the leader on this issue, with the help of local business leaders who want to speak out. “A carbon tax will help create a new set of economic conditions in which my business can creatively compete. Higher prices on fossil fuels will help my business realize greater savings from the efficient lighting, electric vehicles, and cloud technologies we already use, and will create an incentive for us to look at more ways to reduce our carbon footprint,” says Susan Labandibar of Tech Networks of Boston. Massachusetts business owners are moving forward with their proposal by meeting with economists and legislators at the state capitol later in the month. They believe that pricing carbon would be best for the state, rather than a cap-and-trade scheme which would put carbon on an open market leading to less predictable price volatility.

Meanwhile, here in Washington, businesses convene from across the country, looking at Massachusetts and other states to lead the push for a price on carbon. And while on a federal level, such action will likely be mired in a partisan, political stalemate, the nation’s eyes turn to the individual states to break through the gridlock — with business leading the way.

Green is the program director for the Climate Action Business Association (CABA), a Boston-based coalition of businesses taking targeted action on climate change. As an activist, Michael has played strategic roles in several of the largest national, as well as international campaigns dedicated to fighting climate change. Since 2012, he has served as a representative to the United Nations focusing on international climate science and policy. He also serves as the chairman for the ASBC’s Committee on Energy and Environmental Policy.