This Earth Day, we interviewed Tom Stokes, founder and coordinator of 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 (PCI) is a broad network fostering dialogue and encouraging viable solutions that price carbon pollution. We have partnered with PCI to hold national dialogues among stakeholders since 2011, when Karuna Center director Olivia Dreier helped plan and facilitate the Summit for Environmental Leaders that led to PCI’s formation.
“It’s more important than ever that more stakeholders talk, from a bipartisan perspective."
Tom: Our network consists primarily of environmental groups, think tanks, and opinion leaders who are at the table, though we have a few more business leaders becoming involved. We had a dialogue fairly soon after the election, and I think there was a general sense of shellshock. The next dialogue was in March, which was really about the proposal that eight prominent Republicans put forward in favor of a carbon tax.
We have just completed a fairly extensive survey of our members, and the feeling is that we need to stay the course—that in the long term, pricing carbon emissions remains the most viable climate change policy solution. We will work until we have a better chance, to get the bipartisan legislation we would like to see in Congress. Even though some people may have to pay attention to more immediate issues, the interest is still there. There is a real feeling that our dialogues are more important than ever.
Karuna Center: As it is now, what kinds of solutions are being discussed in PCI?
Tom: “Fee & dividend” plans, which are also called “tax & dividend,” are on the table, especially as prominent Republicans are supporting this approach. Those who favor a fee & dividend approach feel it is the best hope of getting broad-based popular support. This approach would impose a fee or tax on fossil fuels based on the amount of carbon in that fuel, and then distribute the dividends among U.S. citizens. Their thinking is that once people start getting a dividend, they are of a mind to defend it – and the higher the fee, the higher the dividend.
At the same time, there are also more discussions happening about a tax shift that would involve tax reform. Given the apparent opposition to pricing carbon, within Congress or within the Trump administration, there is that debate—whether to pursue a fee & dividend approach, or a “grand bargain” where you discuss issues of deficit reduction and the tax code. We also discuss a range of other pricing carbon policy options.
“Those who favor a 'fee & dividend' approach feel it is the best hope of getting broad-based popular support. This would impose a fee or tax on fossil fuels, and then distribute the dividends among U.S. citizens... At the same time, there are also more discussions happening about a tax shift that would involve tax reform."
Tom: The whole issue of “preemption”—the idea that a carbon tax would replace or preempt environmental regulations—has always been very, very controversial. This is one of the reasons we have chosen not to be prescriptive in our approach in the Pricing Carbon Initiative, and not to endorse a specific carbon pricing mechanism. It is one of the reasons we are a network and not a coalition. Our feeling is that others are going to promote their own versions of what they think is best, and ultimately Congress is going to decide. We continue to keep that space for dialogue open, where we can continue to discuss the pros and cons of all approaches.
Karuna Center: What do you see as the impact of PCI discussions? What is the role of PCI within the climate justice movement and in developing or influencing policy?
Tom: Particularly with environmental justice issues, with equity issues, dialogues are extremely important. In the state of Washington’s ballot initiative to price carbon last November, there was a huge chasm between the backers of the ballot initiative, and environmental groups seeking to actively oppose that initiative. The ballot initiative was designed to be revenue-neutral, meaning that it would be a tax shift. Revenue-positive proposals, on the other hand, direct carbon fee revenue toward specific needs. It can either be used to offset the impact on lower income people for whom a carbon tax is inherently regressive, or to fund alternatives that reduce emissions. Given the ill will around that ballot initiative, I think it remains especially important for dialogues to continue. Pricing Carbon Initiative is not the only forum for dialogue, but it is an important one.
"Particularly with environmental justice issues, with equity issues, dialogues are extremely important. In the state of Washington’s ballot initiative to price carbon last November, there was a huge chasm between the backers of the ballot initiative, and environmental groups seeking to actively oppose that initiative. Given the ill will around that ballot initiative, I think it remains especially important for dialogues to continue."
Tom: I think that the Karuna Center perspective of the importance of a dialogue over a debate, the importance of listening, the importance of understanding, remains a key point to remember and is why having Karuna’s involvement continues to be significant and important. I think that Karuna Center is really instrumental in keeping us on the dialogical approach. It’s very easy to stray away from there and get involved in discussions in a way that leads to frustrated feelings. The language we use is very important, especially as we think of engaging the broader public. Karuna’s experience has a lot to do with communication and language, and addressing the values that people of different ideologies share.
Karuna Center: Within PCI, what are the major areas of common ground, and the major sticking points?
Tom: All along there has been concern about the pros and cons of preemption: if a carbon tax is significant enough, could it effectively preempt EPA regulations? I think some people feel that it could and should, and others feel there is an important role for regulations—and notwithstanding the more immediate things happening at the EPA, that debate continues. There are those who feel it is very important to defend the authority of the EPA, not only within the Clean Power Plan, but also because of the co-pollutants that go along with greenhouse gas emission. For instance, with more and more natural gas being used, leakage is a considerable concern, as well as fracking. I think the general consensus is there will always be a role for regulation, and the difference is around the degree to which regulation is necessary and feasible.
What has been of most interest lately is not the idea whether there should or should not be preemption, but whether should be a fee & dividend or a revenue-neutral tax shift.
"All along there has been concern about the pros and cons of 'preemption:' if a carbon tax is significant enough, could it effectively preempt EPA regulations? I think some people feel that it could and should, and others feel there is an important role for regulations."
Tom: First of all, behavior is a complicated thing. Businesses respond more directly to price incentives than individuals do. Business is always looking at the bottom line, so a relatively small tax, like 20 bucks a ton or roughly 20 cents on a gallon, would have a significant impact on businesses that consume a lot. But people who drive a car aren’t always thinking about it. One gauge people use is the so-called social cost of carbon, which has been pegged at about 40 dollars on a ton, but that’s an inexact science considering the damage done by greenhouse gases, and it does not include impacts such as the acidification of oceans.
Most people I talk to say that if we’re going to significantly impact behavior, we need to get the carbon tax up to 100 dollars on a ton, or a dollar on a gallon—then people start paying attention, though transportation is less responsive to a tax signal than other forms of energy usage. I think that putting an escalator clause in the carbon tax is extremely important—so if someone is buying a car knowing that the tax may be 30 cents on gallon now, but know that is going up every year, that will be an important factor in the fuel economy they choose.
Karuna Center: How do the current Presidential administration's plans, including drastic cuts to EPA funding, impact the future of PCI's efforts to put a price on carbon, and to reduce greenhouse emissions?
Tom: I think it brings home the fact that it’s more important than ever that more stakeholders talk, from a bipartisan perspective. With a Trump administration, we are sort of all outsiders, so in some ways that frees us not to be worried about hampering any inside efforts by the administration to move climate policy forward. On the flip side of that, there are some people who feel there are more urgent problems than pricing carbon that we have to address. I firmly believe that with a Trump administration our role is more important than ever.
Karuna Center: You've been active on the issue of climate change for a long time. From your point of view, what is the most important thing that the people reading this can do, to be a part of the solution?
Tom: To take some responsibility, and have some acknowledgement that we’re all part of the problem, and we are all part of the solution. I think that even if one is not an activist, one has to be mindful. Mindfulness is incredibly important, to have awareness of climate change and the ecological impact it is having. It is so integrated with larger issues of how we use and share our planet’s resources.
My feeling is not only that people should do what they can to cut down emissions, but that we need to have a feeling of community, that we are all in this together and we need to work together on this.