Carbon Dioxide (CO2) is emitted around the globe. Efforts to stem CO2 have been contentious and significantly unsuccessful. A report by the International Monetary Fund (IMF), dated June 2022, illustrates this point. 2020’s 4.6% drop in global greenhouse gas emissions was a pause in an otherwise powerful upward trend. This drop was due to lockdowns during the pandemic. We saw an increase across all sectors in 2021, to levels higher than pre-pandemic. There are many potential solutions. Placing a price on carbon is one, but no formal global market exists; and no definitive legislative mandate is certain.
One group based here in the US, Citizens Climate Lobby (CCL), a non-partisan, non-profit group, is working to advance a price on carbon. While there are cap and trade systems in place, they believe a tax will be more effective in promoting a strong transition to a cleaner and more robust economy. CCL worked with legislators on Capitol Hill, to develop the Energy Innovation and Carbon Dividend Act (H.R. 2307). The idea is to place a fee on the source of fossil fuel production to encourage a transition to greener energy solutions. That fee would then be paid in equal shares to all Americans.
If the US engages in this strategy, will other nations follow? The carbon border adjustment tax would apply a tax on energy imports. Though not a panacea, the carbon border adjustment tax, as a piece of this legislation, would be a potential equalizing force to speed transition to more climate friendly energy. It could encourage foreign petroleum producers to reduce economic dependence on the fossil fuel-based business model. This legislation has merit though the oversight for compliance and administration is quite daunting. FOLBR will continue to monitor key legislation for our members. If we are to reduce the effect of climate change, we must address greenhouse gas emissions.