This year ushered in more devastation, loss and heartbreak than anyone could have ever imagined. As a nation, we are facing unprecedented economic, social justice and public health challenges.
Yet even in this bleak current moment, when hope may seem sparse and many eyes are narrowly focused on November 3, we cannot lose sight of another urgent and looming challenge: climate change. This is especially true as the pandemic underscores just how interconnected our health and our environment really are.
Some may still ask: Why push for a price on carbon now, in this complicated environment? To which we respond: If not now, then when?
Climate change doesn’t recognize global economic downturns, as evidenced by the current wildfires raging across California, or the recent devastation caused by Hurricane Laura. These impacts are pounding our economy so frequently and severely that the Commodity Futures Trading Commission’s report warns it could destabilize the U.S. financial system.
The urgency of climate action is being increasingly recognized and reinforced in the wake of COVID-19. The United Nations recently announced that the number of commitments to reach net zero emissions from businesses and local governments roughly doubled in less than a year, and this year’s Climate Week was marked by encouraging and ambitious commitments across sectors.
And while we certainly recognize the politics of the moment, the science is clear: The need to act on climate and reduce emissions is urgent. The economics are clear as well: The most efficient, effective long-term solution to address climate change is market-based. That’s why leading businesses have clearly spoken out in support of enacting policies in the short term in order to lay a foundation for bolder action in the long term.
Of course, our two organizations — along with all members of the CEO Climate Dialogue — recognize that we need an array of policies to address the many intersecting issues related to climate, jobs, equity and justice. Any carbon pricing policy must protect and alleviate the disproportionate impacts on vulnerable communities.
Fortunately, many of America’s top executives are keeping climate change — and climate policy in particular — top of mind. In the past several weeks alone, business leaders far and wide have made it clear that climate policy should remain a top priority for lawmakers.
First, the Business Roundtable, comprising more than 200 executives from America’s leading companies — together representing more than 15 million employees and more than $7 trillion in annual revenues — released a statement on climate change that includes support for a price on carbon. Much like the CEO Climate Dialogue, of which our two organizations are members, the Business Roundtable’s statement endorses a set of principles to guide the development of U.S. climate policy.
Secondly, the CFTC’s new report — which was authored and approved by representatives from the financial services, energy and agricultural sectors — says that passing a fair, economy-wide price on carbon is “the single most important step to manage climate risk.”
In September, 14 members of the CEO Climate Dialogue — which consists of more than two dozen CEOs from Fortune 500 companies with over $1.4 trillion in combined annual revenue, along with four of the country’s leading environmental nonprofit organizations — held virtual meetings with lawmakers from both sides of the aisle. Our “Zoom in” meetings showed clear support for congressional action on climate change, and for the development of legislation consistent with the CEO Climate Dialogue’s Guiding Principles, which includes carbon pricing.
Furthermore, 11 states — responsible for approximately one-third of U.S. GDP — already have some form of carbon pricing, and this number continues to grow. Eleven different carbon pricing bills have been introduced in this Congress, some with bipartisan sponsorship. The recent majority staff report from the House Select Committee on the Climate Crisis also recommends some form of carbon pricing.
This plethora of private and public sector activity suggests that support for carbon pricing is alive and well.
Moreover, stakeholders are demanding bold leadership from the private sector. Nine out of 10 young people in Generation Z, for example, believe that if a company makes a climate commitment, it should have programs and policies in place to back it up.
Businesses today are expected to embrace stakeholder capitalism as a means to retain their social license to operate. Doing so includes making climate action a business imperative. And by “action,” we don’t just mean voluntary commitments on climate change. We mean using a company’s political leverage to advocate for climate policy, which is the most powerful tool that a company has to fight climate change — and the only way to put us on track to reduce emissions at the pace and scale that the science demands.
Importantly, we also recognize that it may take several years to “get the policy right,” and for industries, sectors and supply chains to transition to climate policy that includes a price on carbon. That’s why it’s imperative that we take action today. Policies such as those identified by the Industrial Innovation Initiative can complement carbon pricing, helping accelerate the transition.
As we and all members of the CEO Climate Dialogue believe, the conversation about how best to develop a comprehensive, bipartisan climate policy should continue at full speed this fall. The dialogue should also center on commonsense approaches that rely on market-based solutions, insofar as they are accompanied by discussions as to how best to ensure equity and social justice.
We wholeheartedly agree with the Business Roundtable that an economy-wide price on carbon is the best way to use the power of the market to achieve carbon reduction goals. We need bipartisan support to get this done. The planet, our economy and our health cannot wait any longer for action.