Price fossil fuels to reflect their true cost to the planet

Last Earth Day, President Joe Biden pledged that the U.S. would cut its greenhouse gas emissions in half by 2030, compared with 2005 levels. It was a welcome declaration, albeit only a first step toward what is required to prevent the worst consequences of climate change.

Biden's Build Back Better bill is stalled in Congress. Worse, the war in Ukraine and inflation in the U.S. have made cutting emissions politically less palatable now. The knee-jerk reaction of political leaders to produce more oil and gas to bring down energy prices was perhaps predictable, but it will only aggravate the problem of steadily increasing emissions.

A far better approach to stopping autocrats such as Russian President Vladimir Putin from waging wars financed by fossil fuels would be to accelerate the transition to clean, domestic energy.

Last month, the United Nation's Intergovernmental Panel on Climate Change, or IPCC, issued the latest in a series of dire warnings. The report outlined the steadily worsening impacts of climate change and called for immediate action.

“Any further delay … will miss a brief and rapidly closing window of opportunity to secure a livable and sustainable world for all,” the report said.

Economists and climate experts agree that the quickest and most efficient way to reduce planet-warming emissions is to levy a tax on fossil fuels. In the words of climate scientist James Hansen, “As long as fossil fuels are the cheapest energy, we will just keep burning them.”

Fossil fuels don't have to be the cheapest source of energy; wind and solar already are becoming cheaper in many places. But U.S. government policy toward Big Oil, including various forms of subsidies, has continued to make it hard for renewables to compete.

Pricing fossil fuels to reflect their true cost to the planet and its inhabitants would mean discontinuing subsidies and levying a tax of some sort on coal, oil and natural gas.

A policy known as a carbon fee and dividend, outlined by Hansen in his 2009 book “Storms of My Grandchildren,” would impose a small but steadily rising fee on fossil fuels based on the amount of carbon released when those fuels are burned. (The fee could start as low as $15 per metric ton of carbon dioxide, equivalent to about 14 cents a gallon of gasoline.)

To make sure the burden doesn't fall disproportionately on low-income households, the tax revenue would be rebated in equal shares to all Americans in the form of a monthly check or direct deposit.

Bills calling for such a policy have been proposed in several sessions of Congress. Unfortunately, the political will to drag them over the finish line has not been forthcoming.

Congress has a tiny window of opportunity now to enact a price on carbon emissions through the budget reconciliation process. Although the House version of the Build Back Better bill does not contain a carbon price, the Senate could include one in its version.

Failing that, it will fall to Biden to do what he can through executive orders.

God help us and all of our grandchildren if we squander this opportunity.