FCNL believes that carbon pricing should form a key part of the U.S. response to the climate crisis. Putting a price on carbon emissions represents a straightforward and effective way to account for the cost to society wrought by greenhouse gases.
As support for carbon pricing grows, we are reiterating the principles that will guide our advocacy.
A Sufficient Price and Border Adjustment
The most important element of a carbon price is its effect on carbon emissions. The price should be high enough to accelerate the decline of carbon intensive industries and spur investment in low carbon processes.
The price should be paid “upstream”—across oil refineries, natural gas terminals and pipelines, and coal mines. Pared with a price on carbon, a border carbon adjustment will help prevent carbon leakage, ensure a level playing field, and preserve US competitiveness vis-à-vis foreign manufacturers.
The U.S. regulatory regime is a key tool for reducing emissions, so if carbon pricing legislation includes a regulatory moratorium, there should be an environmental integrity mechanism to ensure that the moratorium is lifted if the carbon fee isn’t achieving the desired reduction in emissions.
Any carbon price should increase over time to ensure that the U.S. stays on track for net zero emissions by 2050. If the set price is not sufficiently driving down emissions, then the price should increase.
For example, if the overall goal was an 80 percent emissions reduction by 2050, incremental short-term goals should be set at 2- or 3-year intervals. If these short-term goals are not achieved, the price would increase, until the overall goal is met.
Protect Vulnerable Communities
FCNL believes that the revenue generated by a price on carbon should be directed primarily to the communities who have experienced the negative externalities associated with the burning of fossil fuels. With this in mind, we will look to see how any carbon pricing legislation impacts rural communities, minority communities, and those most at risk from climate impacts.
An effective price on carbon can lead to reduced greenhouse gas emissions and contribute to the creation of a low carbon economy.
A carbon price should promote economic equity and follow the “polluter pays” principle to ensure that the costs are not borne by the most vulnerable, who should be helped, not harmed, by this policy. Not only is this fair, but it will also contribute to greater social cohesion and strengthen the roots of a sustainable economy that can offer opportunity to all Americans.
Enacting a price on carbon would be a major step forward for U.S. climate policy. Achieving this goal requires good-faith negotiations and compromise, qualities that have not always been evident during this highly partisan and divisive era. We are realistic about U.S. politics and recognize the challenge of finding common ground, but we also believe that this moment in history is calling upon America’s political leadership to rise above partisanship and do what is needed to protect people and the planet.
While there are many ways of achieving our desired outcome, we believe that these principles should be addressed in carbon pricing legislation. An effective price on carbon can lead to reduced greenhouse gas emissions and contribute to the creation of a low carbon economy that offers opportunity to every member of society. At FCNL we will always look for ways to support laws consistent with our values and our grounding as people of faith.