Last month, two democrats, Sens. Sheldon Whitehouse (D-RI) and Brian Schatz (D-HI), unveiled new legislation to address climate change at an event hosted by the American Enterprise Institute. If it becomes a law, the proposed bill will tax fossil fuels, starting at $45 per ton of carbon dioxide and steadily rising each year.
Policymakers are often addressing conflicting goals when tackling climate change. While they see an urgent need for action, they also fear slow economic growth. But, as British Columbia has shown us, climate change action can be synonymous with economic prosperity.
When British Columbia implemented the carbon tax in 2008, it was a risky proposition. Critics said the tax would devastate BC's economy. Seven years later, it is an economic and environmental success. For countries that grapple with the economic realities that come with switching from fossil fuels to renewable resources, this is one option that deserves serious consideration.
Since 2008, BC's fuel consumption has declined 17.4 percent across all fuel types covered by the tax, according to Sustainable Prosperity. During that time, BC's GDP stayed in line with the rest of Canada. The tax levies a fee on carbon-based fuels, and all revenues from the carbon tax fund tax rebates in other areas. In 2012, this tax program gave BC the lowest tax rate in Canada.
World leaders may want to take the clue. According to Time, this year, G-7 world leaders laid out an "ambitious" plan to eliminate the use of fossil fuels worldwide by 2100, but didn't provide specifics on scaling back fuel consumption in their respective countries. In other words, the plan is a whole lot of nothing, wrapped in the pretty ribbon of good intentions.
It's a complex issue, which requires leaders to balance the fate of the planet against economic realities, powerful lobbying groups, and some legislators' skepticism about global warming. Even Germany, who many see as an environmental pioneer, has had to evaluate their ambitious climate change agenda when faced with the prospect of losing 100,000 jobs after the country approved a levy on high-polluting coal plants.
On the flip side of the coin, the carbon-climate crisis is also devastating. In 2010, economic problems caused by climate change were severe, causing $700 billion in losses or one percent of the global GDP, according to DARA International. Combined climate change and carbon economy losses in 2010 totaled $1.2 trillion.
DARA projects severe economic losses in the United States, China and India. In 2030, these three countries will have $2.5 trillion in combined economic costs linked to climate change and the carbon economy.
According to Time, 59 percent of global carbon emissions are created by G-7 countries. More than 10 times the carbon emissions produced by 48 developing countries. But, DARA reports that developing countries will feel the brunt of the economic loss from the carbon-climate crisis, totaling $4 trillion in 2030.
In the meantime, BC's economic performance is slightly outperforming the rest of Canada. In fact, the political debate focuses more on where to spend the tax revenue than whether or not to keep the tax. The carbon tax represents the out-the-box thinking and decisive action required to enact change.
Increased action against climate change means less harm to human health, the environment, and our planet's water resources over the long-term. In the short-term, it requires greater investment in renewable energy. Timid action taken means the planet pays the price in human loss and ecological impacts.
The solution is simple. Reduce fossil fuel use. Countries can shift to renewable energy sources or reduce energy demand by increasing efficiency. However, the plan for reduction and how it will impact socio-economic variables is multifaceted.
According to the McKinsey Global Initiative's Eric Beinhocker and Jeremy Oppenheim, by "adopting the right mix of policies, incentives and new technologies, policymakers in the world's wealthier, developed nations would dramatically restrain the quantity of greenhouse gases emitted into the atmosphere, even as they promote job growth and wealth creation."
In order to successfully assimilate two seemingly competing goals, like reducing carbon emissions and increasing economic growth, countries must increase carbon productivity. A "low-carbon revolution" can help us to maintain the prosperity we desire, while holding on to our planet's environmental health. Improved energy efficiency makes sense from an environmental and economic perspective. It will mean robust investment in advanced technologies and transportation, with an emphasis on sustainable bio-fuels, hybrids, and electric vehicles, Oppenheim and Beinhocker said.
Building the infrastructure of the Internet cost money, but it has created millions of jobs, and increased the world's economic growth. According to Oppenheim and Beinocker, the renewables industry is just beginning, and it already employs more than 2.3 million people worldwide.
Economic growth and environmental health are not opposing viewpoints. They complement one another. I hope policymakers keep this in mind as they work on creating a more sustainable future for us all.