- Investigates the causes of economic imbalances.
- Investigates the effect of the global financial system and/or the monetary system in fostering a sustainable economy.
- Investigates causes tending to destroy or impair the free-market system.
- Explores and develops market-based solutions.
In the second half of 2017, the Karuna Center for Peacebuilding will continue to assist the Pricing Carbon Initiative, as it has done in 2011, 2014, 2015, 2016, and in the first half of 2017, in building consensus around policies and bipartisan legislative solutions that price carbon. Together we will continue to design, organize and facilitate dialogues with an expanding network of influential decision makers, support action-oriented initiatives, and develop systems for sharing and disseminating information.
This report, “Part B,” is for the second of two Walker Foundation grants in 2017 to the Karuna Center, which collaborates with and supports the work of the Pricing Carbon Initiative (PCI). The previous report, “Part A,” submitted in September 2017, was on the $10,000 grant for work done in April, May and June. As reported, the funds were used to assist PCI in designing and facilitating the June 2017 quarterly Pricing Carbon Dialogue in Washington DC and to support related work to strengthen PCI’s capacity. The $21,000 grant covered in this report, “Part B,” enabled PCI to continue with the capacity-building, funded PCI’s 3rd and 4th quarterly Dialogues in 2017, and helped support PCI in its efforts to prepare for potential opportunities in 2018. Specifically, this involved:
1) Organizing and implementing the remaining two quarterly 2017 Pricing Carbon Dialogues, on October 3rd and December 6th;
2) Organizing and co-hosting (with the Walker Foundation and the Brookings Institution) a luncheon with business and opinion leaders (following the October 3rd Dialogue);
3) Raising funds from other sources needed to establish a strong presence for the remainder of 2017 and into 2018;
4) Completing PCI’s IRS 501(c)(3) application, which is currently pending; and
5) Making strategic plans for 2018.
Although the recent March 15, 2018 Dialogue was not specifically part of the grant request, the planning process which preceded it was, and since the event falls within the period covered in this report, we include it in the summary of activities below.
The October 3rd Pricing Carbon Dialogue, a morning-long event at Resources for the Future, featured two 80-minute panels: one with representatives from major businesses that support carbon pricing and the other with experts on the social cost of carbon (SCC), who discussed the significance and usefulness of that methodology. The event involved 66 participants, representing a significant portion the 85 diverse organizations in the Pricing Carbon Initiative network.
The business panel explored carbon pricing from the perspective of two major oil companies and one significant retail conglomerate. The oil company representatives explained that they supported this carbon pricing because: 1) it achieves environmental certainty at lowest cost for consumers; 2) it’s conducive to carbon capture, utilization and storage (CCUS); 3) it’s generally conducive to promoting global participation in market price-driven solutions that offer uniform and predictable costs of carbon emissions; and 4) it’s also contusive to minimizing complexity and administrative costs, maximizing transparency, and providing flexibility in adapting to developments in climate science and to the economic impacts of climate change policies. To these ends, one of the oil companies favored cap-and-trade and the other favored a carbon tax. The retail conglomerate representative emphasized corporate responsibility in its planning and marketing, noting that a federal pricing policy would provide an important incentive, and noting that even without that, their fastest growing brands are those driven by social purpose, which are growing 7 to 8% faster than traditional brands
The social cost of carbon (SCC) panel was organized by a subcommittee of PCI that researched such topics as: the consequences of the Trump administration’s evisceration of SCC programs at EPA and other agencies; who is picking up the pieces (RFF is leading in these efforts); projections and methodologies associated with SCC; and SCC’s value and limitations in calculating damages, shaping policies in general, and determining appropriate prices for carbon emissions. One of the committee members wrote a briefing paper for PCI participants on the evolution of SCC methodologies. The three expert panelists elaborated on all these points, emphasizing that 1) the Obama-era Interagency Working Group on the Social Cost of Greenhouse Gases was not designed for a carbon tax mechanism, 2) other approaches are likely to be preferable for arriving at an effective carbon tax rate, 3) when using SCC one needs to think about conceptual and practical considerations, and 4) notwithstanding recent government cutbacks, opportunities exist and need to be explored to improve SCC estimation and use.
The fourth and final 2017 Pricing Carbon Dialogue was as day-long event held on December 6th, at the World Resources Institute, with 65 participants. As we neared the end of the first year of the Trump administration, we looked at the juxtapositions of the bluster, the damage being done, and the rays of hope. With the just-completed climate talks in Bonn as a fresh point of reference, the first panel addressed international and domestic reactions to the President’s intransigence. The presenters on our first panel contrasted the Trump administration’s destructive impact on the Paris Accord with the determination of the rest of the world to implement it and move ahead with other international climate initiatives; and domestically, the panelists contrasted some of the most egregious eviscerations of climate-related programs at EPA, DOE, Interior, CEQ, etc. with some of the most promising state, municipal and citizen-based initiatives now underway. The second panel reexamined the potential for injecting the compatibility of pricing carbon with tax reform into discussions among opinion leaders and into deliberations on the Hill (it’s a theme that the Dialogues regularly circle back to). With the Senate and House tax bills still under consideration, we discussed the ramifications of why pricing carbon emissions as a “pay for” was not being seriously considered and what it might take to change that dynamic. Several panelists and participants suggested that an economic collapse coupled with untenable budget deficits appeared to be a more likely provocation than the ever more daunting climate events.
Finally, the theme for March 15, 2018 Dialogue, held at the United Nations Foundation, was the correlation between pricing mechanisms and transportation policies. With a smaller conference room but an excellent set-up of slide presentations and two call-in presenters, we were limited this time to 47 participants. We considered various pricing mechanisms (including congestion pricing) and revenue treatments (including tax credits, subsidies, and funding for public transportation and infrastructure). In the two panels we discussed analytical components (theory, modeling, etc), results from existing pricing / transportation initiatives in other countries, and national programs and state initiatives that are underway or under consideration in the U.S. The first panel was on congestion pricing – on how and why it has been working so well in Stockholm and on why New York Governor Andrew Cuomo’s proposed “Fix NYC” program could offer similar benefits. Presenters on the second panel looked at how carbon pricing might affect national transportation policy and impact emissions, and they evaluated existing initiatives in California and the Northeast. Major takeaways were that, given that the transportation sector has overtaken the electric power sector as the largest source of GHG’s, and notwithstanding the fact that it is less responsive to pricing signals, pricing carbon needs to be an essential part of the mix when it comes to reducing the footprint of the transportation sector, and it needs to be complimented by other policies.
As always, the Dialogues and related PCI events have helped make a difference by:
1) Engaging more organizations, sectors and constituencies in discussing pricing carbon issues;
2) Furthering an understanding of policy solutions and the political dynamics involved in enacting them;
3) Providing opportunities for networking, meeting other stakeholders, and building new alliances; and
4) Helping organizations and other stakeholders stay abreast of what others in the climate movement are thinking and doing.
Given the politically challenging circumstances we continue to face, the ongoing positive feedback from our participants has been especially appreciated and reassuring.
Finally, a note on the special luncheon that followed our October 3rd morning-long Dialogue: The luncheon, held at the Tabard Inn with 24 key participants from the Dialogue, was co-hosted by PCI, Brookings, and the Walker Foundation, and was fully funded by the Walker Foundation grant. The discussion after the meal was informed by the morning panels (especially the SCC discussion) and by Barrett Walker’s call to action: “As you know, the Walker Foundation and other funders are supporting economic research aimed to quantify damages not currently included in the social cost of carbon… [Dr James Hansen’s findings show that] without a rapid reduction in emissions, followed by extensive reforestation and changes in agricultural and industrial practices sufficient to draw down atmospheric CO2 to 350ppm, the costs of climate impacts will impoverish future generations and result in an increasingly unlivable world… Thus far, carbon tax discussions have focused on tax levels that are deemed to be politically acceptable. To be relevant, the Dialogue should now consider a carbon tax and other steps needed to avoid outcomes described in Hansen’s [recent] paper. Hurricanes Harvey, Irma and Jose add urgency to addressing climate change with sufficient rather than incremental responses.” Although no concrete actions emerged, important ideas were discussed, useful suggestions were made, and vital seeds were planted to help nourish future initiatives. They are being nurtured as we proceed with our agenda for 2018.
(Consistent with the Chatham House Rule, we mention no names of participants in this report, which is available to the public on the Walker Foundation website. Confidential information with particulars about the Dialogues’ agenda and participants is shared with the Foundation principals.)
Participants in the PCI network share a growing belief that correcting the price distortion that excludes the climatic and social costs of fossil fuels from their pricing is more timely and urgent than ever. Market-driven solutions are central to PCI's mission. Their ongoing bi-partisan, multi-stakeholder dialogues continue to build consensus across party lines and with ideologically diverse interest groups.
The scope of this project is national, but given the continuing unfavorable political dynamics in Washington DC, we are diversifying our efforts this year by also creating opportunities for information sharing and exchange on a variety of international, state-based, and legal initiatives that are of increasing importance as likely forerunners of much-needed national pricing carbon solutions.
Since this phase of PCI’s work is focused on sharing confidential information between participants in our network, there can be no dissemination of information to the general public on the results and findings of this project. Information about the Dialogues and related projects is shared only with the designated representatives of the participating organizations. Since the Walker Foundation both supports and participates in the Dialogues, we share this and other confidential information with the Foundation’s principals, but it cannot be posted on this or any publicly accessible website.
That said, PCI is making plans to have the capacity in 2018 for a useful role in generating information for public dissemination, via our website and elsewhere, as we have done in the past.
(Check sent: 9/27/2017)