Coming out of the 2015 UN Climate Change Conference in Paris, we interviewed Tom Stokes from the Pricing Carbon Initiative about the process of bringing people together—across very different ideologies—in order to develop climate change solutions.
Pricing Carbon Initiative just held its fourth national dialogue of 2015 in Washington D.C. on December 17th. Karuna Center's director, Olivia Dreier, helped plan the program and facilitate key discussions. Karuna Center has partnered with the Pricing Carbon Initiative in holding these national dialogues among stakeholders, now representing eighty diverse organizations, since July 2011, when we helped plan and facilitate the Summit for Environmental Leaders, which led to the Initiative’s formation.
KC: How would you describe what pricing carbon, and the Pricing Carbon Initiative, is all about?
TS: Essentially, the principle of pricing carbon is for responsible parties to pay for the damage they do to the commons, as a way of controlling greenhouse gas—as opposed to a regulatory method. It's a financial incentive to lower one's carbon footprint. It’s also a mechanism that can complement regulatory policies, such as the Obama administration’s Clean Power Plan.
The mission of the Pricing Carbon Initiative is to advance approaches to pricing carbon that are viable, effective, and equitable, and that are commensurate with the challenge of climate disruption.
KC: And when you talk about pricing carbon, would that affect individuals, or corporations?
TS: It would be across the board. For instance some preferred models of a carbon tax, put the fee upstream—at the source, which means that the coal, oil and gas companies pay the fee for the carbon content of the fossil fuel they extract or import. Then the added cost of the coal, oil, or gas gets passed along. So it becomes more costly to generate electricity, drive a car, heat one's home—and that provides incentives for people to consume and pollute less.
To make this politically viable, and economically equitable, there's a lot of discussion about what you do with the revenue: we're talking about many billions of dollars. Revenue treatment can be a very controversial. It’s an example of a divisive issue that we try to approach in such a way that people keep talking, get a better understanding of the different points of views, and feel for where commonality can be achieved.
KC: One thing that Olivia often comes back to about what is so unique about Pricing Carbon Initiative is who's at the table. Can you say who's around the table right now?
TS: It's confidential. We can say what types of people are at the table. They include a wide array of environmentalists, conservative and progressive think tanks, social justice advocates, business interests, assorted consultants, etc. Although government officials are not part of our confidential dialogues, they are sometimes invited to present.
KC: And why is it important that it's confidential?
TS: Because some of these subjects are very sensitive and many of the organizations involved have not taken positions on pricing carbon. Issues such as revenue treatment and “preemptions” (where a carbon fee will replace EPA regulations) can be particularly controversial. The Chatham House Rule of confidentially, allow for a safe place where candid discussions can take place and participants know that they will not have to later defend or justify what they have said.
KC: What were the goals of this most recent meeting, coming on the heels of the Paris summit?
TS: We had three panel discussions: the first was indeed about Paris, and it was the longest one. The second was about what is called price elasticity: What is the correlation between an added price on fuel, and the actual results you are going to get from fewer emissions? How can we be sure that a pricing mechanism will do what we want, and what are the backup measures that we propose to cut emissions if pricing doesn't work? And in the third panel, we explored the political landscape. Our panel’s dialogues were a combination of sharing information, and serious discussions about policy.
And then we had breakout sessions - and this was the part Olivia facilitated - where we broke out into smaller groups and people were able to talk to each other about their responses to the previous panels, and what directions they thought the Pricing Carbon Initiative could take that would help them in their work to contain greenhouse gas emissions. We also had an update on specific projects people are working on that emanated from the dialogues at our retreat a year ago.
Karuna Center really had a very strong presence, helping us to keep a perspective on what our value added is to the overall climate movement, and why we occupy a very unique space in the overall spectrum of climate activism. We have created an atmosphere where people come to us and ask if they can participate.
KC: What do you see as the role of the Pricing Carbon Initiative, in building on the momentum from Paris?
TS: The Paris event, from all reports, was quite an amazing two weeks, in part because it so quickly followed the terrorist events there. There was a lot of concern about security, but in a very remarkable way, official and NGO participants went with the flow—there was a palatable sense of collaboration, cooperation, and encouraging all the different sides to be participatory, whether official delegations or side delegations.
I think the Paris summit was indeed a major achievement: that all 196 official parties agreed to specific goals, consistent with pledges from 166 countries and with a stringent, transparent protocol for monitoring of these goals. Although these goals are not commensurate with the severity of projected climate disruption and they are not enforceable, they are stronger than what most expected and it opens up the door to say, “OK, we've got these goals—how are we going to get there?” And to my thinking, the most effective, equitable, and politically viable way is through a price on carbon. Increasingly, governments, NGOs, international businesses, and others are agreeing with this.
There are new initiatives coming out of Paris to that end. Representatives of developing countries, in particular, like this idea, because countries like India, for example, resist being told that they cannot grow a fuel-based economy. What has a stronger chance is to put a pricing mechanism in place. That way, India gets to keep all the revenue—they're not penalized as a developing economy, they just tax people differently. Also many developing countries have difficulty collecting revenue - it's very hard to get people to report income. But if you pay for what you burn, it's all much more transparent, and it’s simpler and arguably more equitable to charge the oil, coal, and gas companies.
KC: What kinds of policy options are being discussed in the United States, for dealing with the revenue from a carbon tax or fees?
TS: There are two basic approaches: “revenue positive” and “revenue neutral.”
The revenue positive approach uses money collected from carbon taxes or fees for good causes like clean energy, energy efficiency, and helping impacted neighbors and lower income sectors for whom higher energy costs will be a disproportionate hardship.
With the revenue neutral approach, people and businesses are compensated for the added cost. They're paying for their carbon footprint either through tax shifts or dividends. With tax shifts, carbon taxes are offset by decreasing payroll, income, corporate and/or other such taxes. With dividends, everyone with a social security number would get the same amount. But if you're a billionaire with your own private jet, huge houses, and yachts, your added fees could be hundreds of thousands of dollars, but you'd still be getting the same check - say $120 a month - as everybody else. Most households would come out ahead though. Their dividends would be greater than their added fuel costs, especially if they’re careful about their carbon footprint!
KC: What is next for the Pricing Carbon Initiative and your partnership with Karuna Center?
TS: We think hard about where we can be most effective. We will continue with these Washington dialogues, but we're also thinking about expanding our outreach to specific sectors—whether it's business, faith-based groups, millennials, labor, what have you - or geographically. There's quite a lot happening now, for instance, in the Northwest where we're discussing what we might be able to do there as well.