Carbon pricing was mentioned frequently on last week’s CNN’s climate crisis town hall.
A carbon pricing policy that makes the price of fossil fuels honest should not be confused with the solutions this policy would catapult. On one hand, we have solutions. On the other, we have carbon pricing. A carbon tax creates the conditions needed for investors to divert capital away from dirty energy and scale-up solutions instead. It does this by removing the fundamental barrier standing in the way of solutions — artificially underpriced fossil fuels.
Ignoring this fact perpetuates the status quo. Solutions struggle to scale. Fossil fuel extraction and combustion continue unabated.
“It isn’t that they can’t see the solution. It’s that they can’t see the problem.” — G.K. Chesterton
The over-arching economic problem is well-known: Fossil fuels are underpriced. But we’re so distracted by the various solutions that we ignore the fundamental economic barrier holding them all back. It’s like trying to drive your car with the parking brake engaged.
According to top climate hawks, a consensus of economists and thousands of business leaders, a carbon tax is the most effective policy to spark the transition away from dirty energy. A predictably rising price on fossil fuels creates the conditions needed for market actors to divert capital away from fossil fuels. As consumers’ energy prices rise, demand skyrockets for energy efficiency, conservation, clean energy, low-carbon solutions. Trillions in capital would then catapult the plethora of solutions. But remember, pricing carbon isn’t one of those solutions. It’s the critical catalyst to spark this transformation.
That is why all experts agree, a #PriceOnPollution is the big first step. Currently, a half-dozen carbon pricing bills are pending in Congress. One plan rebates 100% of the fees collected as a “carbon dividend” to American households, the EnergyInnovationAct.org.