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Climate Policy: It's the Economy

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CARBON EMISSIONS
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President Obama has taken more action on climate change than any president before him. It could not be put more clearly: "Climate change is a fact." Regardless, the great national anxiety and confusion -- about where we get our energy, how it is produced and its impact on the environment -- needs to end. Congress should act, but in the face of their polarization and dysfunction, action by presidential order is warranted.

Ham-fisted climate denial is still a profound political reality on the Hill, and profitable for K Street. There is no reason to expect a new or sincere Congressional discussion about economy-wide legislation to manage or limit greenhouse gases any time soon. For that to happen, the Congressional leadership would need to realize that managing carbon is not an ideological "Obama" ploy or hoax as trumpeted nightly by some cable news programs and late night AM radio talk shows.

A national legislative response to climate change in the form of a carbon price would be the beginning of an unprecedented economic opportunity already grasped but unspoken by a significant number of investors and operating companies in the United States. Whether it takes the form of a fee, a tax, or cap and trade scheme doesn't much matter. The president, for his part, is utilizing the power of the executive office to achieve greater energy efficiency, curb carbon pollution, and seek "a smarter tax policy that stops giving $4 billion a year to fossil fuel."

The truth is that most large operating companies with a fossil fuel footprint already manage and price their carbon emissions, many with enough reduction credits to make it profitable to do so. Dozens of the nation's biggest corporations -- including big oil -- plan for future growth while fully expecting to pay a price for carbon pollution to slow down global warming. Airlines, energy companies, the transportation sector, appliance makers, homebuilders, and others, all realize that the success of our economic and energy future lies in part with how we manage and price carbon emissions.

The message from business to Congress is this: Let market forces go to work on carbon pollution. We know carbon limits will come; give us some certainty so we can plan. We are missing out on one of the greatest economic and environmental opportunities to come along in decades. Regulating or taxing carbon emissions is no longer a partisan or ideological issue -- it's a matter of business and investment, and of vital importance. A tax or fee on greenhouse gas emissions can begin to unlock the investment in the clean energy technology and innovation necessary to at least curb some of the most negative impacts of global warming and climate change.

And regardless of where you stand on the Keystone XL Pipeline or natural gas or drilling in the Arctic, both the economy and the environment will change for the better when Congress acts and the market is used to price the potential risks of climate change related to fossil fuel use.

Meanwhile, as outlined by President Obama in the State of the Union address last January, expect the president to exert as much executive power as he can to deal with climate change. His previous increases in automobile fuel efficiency standards are already making a large contribution, and his proposed rules on carbon emissions from power plants will be even more significant. Even without Congress, he can move the country toward what we and the world need to do to correct the market failure that is leading to the most significant environmental danger of our time.