Tuesday, February 21, 2017

Republicans Pushing a Carbon Tax

A group of prominent Republics with decades of experience in government has urged the Trump administration engage climate change. This group includes former cabinet Secretaries James Baker, George Shultz and Hank Paulson. The latter is one of the authors of the Risky Business report. This report and others show that the costs of inaction far outweigh the costs of action. The argument put forward by these Republicans is simple, we cannot afford to take the risk of delaying climate action.

The idea that it is in our collective best interest to address climate change is hardly new. Most economists and almost every nation on Earth recognizes the need to actively combat climate change. The US is now alone in its resistance to climate action and according to Baker, Shultz and Paulson, the consequences could prove to be disastrous.

With the nomination of Scott Pruitt to head the Environmental Protection Agency (EPA), Trump has made it clear that his administration seeks to dismantle regulations and abandon climate action. In fact Trump's war against the EPA has already begun. The current US administration incorrectly casts climate action as a partisan issue. As explained by Gina McCarthy the former head of the EPA if the US fails to engage we are simply going to cede those opportunities to other countries like China.

In eschewing climate action Republican lawmakers and those in the Trump administration are cutting themselves off from their roots as an environmentally focused party. Baker, Shultz and Paulson think this administration's denial of climate change is a serious mistake. They offered a solution in the form of a carbon tax with the reasoning that this would enable the US to meet its obligations under the Paris Climate Agreement. As Baker explained, the risks of climate change are too great to ignore.

The business case for renewable energy including declining costs has never been stronger and the engagement of sustainability by the American business community will not be abandoned. Sustainability is also of interest to investors who are concerned about their exposure independent of the policies of the Trump administration. However, sustainability can be slowed just enough to make it very unlikely that we will be able to meet global emissions reductions targets before we surpass tipping points from which we may not be able to recover.

While a Greenbiz poll titled 2017 Green Economy survey of 400 corporations indicates that Trump will not stop sustainability. A total of 60 percent of respondents with revenues exceeding $1 billion said that this administration will not change their sustainability strategy or their investments in renewable energy. Almost half (47 percent) said that rather that under Trump their investments in renewable energy would not grow.

However, 34 percent indicated this administration will slow them down. This slow down effect was particularly pronounced among companies earning less than $1 billion per year. We can extrapolate from these results and infer that the Trump administration will have a chilling effect on sustainability among start-ups and smaller firms.

The business community has a vital role to play and the majority of companies polled suggest they will continue to reduce energy consumption through efficiency initiatives. They will also strive to keep green initiatives on the agenda and continue to engage with stakeholders.

These results are not as encouraging as some might like to believe. The most salient finding buried in the survey is the observation that while Trump won't kill sustainability, his administration can slow it down. This is very bad news at a time when we need leadership to ramp up emissions reduction ambitions.

A slowdown does not seem that bad until you realize that we may be facing an extinction event in the next decade.  Although controversial, at least one scientist has indicated that we could be facing an extinction event within the next ten years due to due to feedback loops that release methane from the Arctic permafrost. If you look at the warming trend in the Arctic this may not be as outlandish as it sounds.

This is not the time to be Pollyanna, we need to take a serious look at the science and realize that climate action is time sensitive. Failure to engage in a timely fashion could spell the end of civilization as we know it. While many may find this news too terrifying to accept, we cannot be silent for fear of causing people to turn away. We need to take stock of the science of climate change and act accordingly. A sober assessment of our predicament reveals that if we are to have a chance reigning in climate change we must act before it is too late. 

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