December 3, 2014

Time to Wake Up: Fighting Climate Change Can Also Help the Economy

As delivered on the Senate floor

Madam President, I am here for my 81st “Time To Wake Up” speech and to ask this body to wake up to the effects of climate change and to say this: Acting on this issue will accelerate economic growth, spur innovation, and create jobs.

   We have settled any real argument about the leading cause of climate change. It is carbon pollution. Measurements in the atmosphere and oceans reveal dramatic, even unprecedented changes in the climate.

   Our scientists know carbon pollution heats up the climate and acidifies the ocean. That is beyond debate. They know this is already a problem for Americans and the world.

   We had wonderful testimony from a NASA scientist today in the Environment and Public Works Committee who talked about what they actually see when they look down from the satellites.

   They take measurements. They are not hypothesizing. They actually measure these things. The scientists know that continued, unchecked emissions of carbon dioxide will push the climate and the oceans into dangerous unchartered new territory.

   In the face of overwhelming evidence of climate change, some of our Republican colleagues–just a few–are beginning to move beyond denial of basic measurements and basic classroom science and beginning to talk about the costs of action. That is progress. When he was asked recently about climate change, the junior Senator from South Dakota acknowledged

   Across the building, over on the House side, Congressman Paul Ryan of Wisconsin has also been talking about the costs of action. In his most recent campaign for re-election, he said that when it comes to action to reduce carbon emissions, “the benefits don’t outweigh the costs.”

   Let’s talk about that. When we get past the denial, which with a few of our colleagues it seems we have–not all, maybe not even many, but a few–and we talk about balancing costs and benefits, if we look at the whole ledger, there is no doubt about it that the balance favors action.

   Climate change carries enormous costs to our economy and to our way of life;  acting now can accelerate economic growth and create new jobs. The costs of climate change are huge. We even hear this from our own advisers at the Government Accountability Office. In its 2013 High Risk List, our Government Accountability Office said that climate change poses a significant risk to the U.S. Government and to our Nation’s budget. Why? The Federal Government owns and operates infrastructure and property that is vulnerable to the effects of climate change. The Federal Government provides aid and disaster response when State agencies are overwhelmed. The Federal Government is an insurer of property and crops vulnerable to climate disruption. These are major line items in the Federal budget.

   Our Treasury Secretary Jack Lew recently explained:     One example–just one. Last month, in the GAO report on what climate change means for private and Federal insurance for crops and for floods, it warned of increased hurricane-related losses to the Federal program. They estimated between a 14- and 47-percent increase by 2040 and a 50- to 110-percent increase over the next century due to climate change. Remember, when you are doubling a number like that, you are starting with a pretty big baseline.

   Superstorm Sandy wrought $66 billion in damage in 2012. If we are constantly replacing damaged roads and bridges, always adapting farming and fishing practices to suit never-seen-before conditions, and frequently paying out big disaster relief and flood insurance claims, that will hit the Federal pocketbook hard.

   We do not even have to look to the costs of the future to justify reducing carbon pollution today. Increasingly, green energy makes economic sense for utilities, for business, and for consumers. Since 2008, prices for solar photovoltaic have dropped 80 percent–80 percent. Austin Energy in Texas recently signed a power purchase agreement for a 150-megawatt solar plant at 5 cents per kilowatt hour–less expensive than comparable offers for natural gas at 7 cents, coal at 10 cents, or nuclear power at 13 cents. The story is similar for wind power. Since 2009, the cost of wind power has decreased by 64 percent.  At the lowest end of the price range nationally, unsubsidized wind power prices are just below four cents per kilowatt-hour.  This compares favorably to new coal generation, priced between 6 and 7 cents per kilowatt hour at the lowest end.

   The World Resources Institute has just done a brief report called “Seeing is Believing: Status of renewable energy in the United States.” It is headlined “Wind & solar are cheaper than coal & gas in a growing number of markets.” It lists sales in Utah, Colorado, Texas, Georgia, and Minnesota–not States that have a lot in common except that renewables are beginning to outcompete fossil fuels in those States.

   Similarly, the New York Times just last week in its business section highlighted this shift in an article: “Solar and Wind Energy Start to Win on Price vs. Conventional Fuels.”

   I ask unanimous consent that the World Resources Institute report and the New York Times story be printed in the Record at the conclusion of my remarks.

   Green energy jobs–they are out there. They are helping communities.

Indeed, they are helping communities recover from the great recession. Let me use a Rhode Island example–TPI Composites. TPI has a development and manufacturing facility in Warren, RI. It is also one of our leading manufacturers of wind turbine blades. They make them in Iowa. When the Maytag plant closed in Newton IA, leaving as many as 4,000 workers jobless, wind jobs helped the town get back on its feet. In 10 years TPI has manufactured more than 10,000 wind turbine blades.

   In Iowa, MidAmerican Energy pays farmers thousands of dollars each year to site their turbines on their farms. The farmers love it. They can farm right up to about 25 feet around the base of the turbine. There is a little gravel road for the maintenance trucks, but they can farm right up to that. They get paid for having the turbines on their farms. So it is a win-win that has helped Iowa generate more than one-quarter of its electricity from wind.

   They are investing more. They have been reducing emissions and moving the State’s economy forward–step by step reducing emissions and moving the economy forward. More and more companies, in their own planning, are seeing the economic benefits from cleaning up their supply chains and reducing carbon pollution from their operations. They see green investments increasing profits. “Too many people say it’s this or that,” Apple CEO Tim Cook explained earlier this year. “We’ve found that if you set the bar high, then it’s possible to do both.”

   Outside these walls here in Congress, where the deniers rule and polluter money reigns, State and local political leaders also see that reducing carbon pollution and growing the economy go hand in hand. Almost 10 years ago, the Presiding officer’s State and my State and others–bipartisan–nine northeastern Governors came together and formed the Regional Greenhouse Gas Initiative, called RGGI, which caps carbon emissions and sells permits to power plants to emit greenhouse gasses. Since the program started, RGGI States that have cut emissions from the power sector have cut them by 40 percent.

   Here is the blue line. That is the emission chart from 2005 through 2012. Well, if cutting emissions was bad for the economy, you would think that the State GDP would have followed downward in that curve, but, in fact, you see that the regional economy across these States actually grew by 7 percent–grew by 7 percent. Bear in mind, this is 2008, the great recession.

   Here we are now. So you would think that during this period the GDP numbers would have taken a pounding. The underlying numbers are actually better than this once you adjust for the recession.

   Early estimates show that in its first decade, RGGI will have saved New England families and businesses in the participating States nearly $1.3 billion on their electric bills. It will have added $1.6 billion into local economies. Along the way, those RGGI States will have added 16,000 job years. Additional investments are coming online because it is such a successful program. So those benefits also grow. Rhode Island has put over 90 percent of the money generated through the RGGI auctions into energy efficiency improvements, helping residents save money on their utility bills and making small businesses more competitive. 

This success led Tom Wolf, the Governor-elect of Pennsylvania, a coal and natural gas state, to campaign for office successfully on joining RGGI.     RGGI shows that improving the environment boosts the economy. Look north to Canada. British Columbia has a revenue-neutral carbon fee that has reduced the use of polluting fossil fuels by 16 percent. What has happened to the economy? The BC economy has not missed a step. The carbon fee revenue has been used to lower personal and corporate rate income taxes. British Columbia now has the lowest personal tax rate in Canada.  If our Republican colleagues would like to lower our American corporate and individual taxes, then I have a revenue-neutral carbon fee bill that I am happy to discuss with them.

Evidence from Rhode Island to British Columbia shows that action on carbon pollution spurs innovation, creates jobs, and economically boosts families and businesses.

   Today I discussed this larger report, again from the World Resources Institute, which is a group that has, for instance, executives from Alcoa and Caterpillar on its board. This is not some fringe group; it is a very responsible organization with significant corporate and international leadership.

   Here is the lead sentence:

   A growing body of evidence shows that economic growth is not in conflict with efforts to reduce emissions of greenhouse gasses.

   It continues:

   Policies are often necessary to unlock these opportunities, however, because market barriers hamper investment in what are otherwise beneficial activities.

   That is what we are about here. Unlock those opportunities for our economy. On the downside–here is the first chapter heading: “Delaying action will have significant economic impacts.”

   Climate change itself constitutes a significant risk to the nation’s economy.

   The downside is on doing nothing, according to this report. The upside is on changing our policies to seize those opportunities. Why are we here fighting about this? Well, again, to quote the report:

   The persistence of pollution externalities–

   “Pollution externalities” means when the cost of your product–you can ship off to somebody else and make them have to take care of it.

   The persistence of pollution externalities gives an unfair advantage to polluting activities. Externalities occur when a product or activity affects people in ways that are not fully captured in its price, such as the full health effects of air pollution not being factored into the cost of electricity generation. Thus, society rather than the company pays the cost.

   Why are we in this fight? Because there are a lot of companies that folks on the other side are supporting and representing here that have been the winners in that fight. They have had those polluting externalities work in their favor. They have enjoying that unfair advantage. They do not want to give it up. But as the report continues, the well-designed policies can overcome those market barriers and direct investment into beneficial technologies and practices. New policies can enhance the transition to a low-carbon economy while delivering net economic benefits and, in many cases, direct savings for consumers and businesses. So that is pretty good news.

   Equally important, taking action helps to reduce the worst effects of climate change–what is coming at us. Do not just take my word for it. Many conservative economists, writers, and officials see the benefits of market-based climate action. “A tax on carbon,” wrote Hudson Institute economist Irwin Stelzer, “need not swell the government’s coffers–if we pursue a second, long-held conservative objective: Reducing the tax on work.

   He continues:

   It would be a relatively simple matter to arrange a dollar-for-dollar, simultaneous reduction in payroll taxes. ….. Anyone interested in jobs, jobs, jobs should find this an attractive proposition, with growth-minded conservatives leading the applause.

   That is the economics of it unless you are shilling for the folks who have had the unfair advantage and want to keep it, but that is not market based, that is not economics, that is just taking care of special interests.

   A recent joint report from economists at the Brookings Institution and the conservative American Enterprise Institute described human-induced greenhouse gas emissions as a textbook example of a negative externality. The report proposed–guess what–a revenue-neutral carbon fee program as the efficient and elegant approach to managing carbon pollution.

   According to the report’s authors:

   Taxing something we do not want (e.g. greenhouse gas emissions) rather than something we want more of (e.g., productive labor and investment) could help lower the economy-wide cost of the program and may even have economic benefits in addition to its environmental benefits.

   Today, in the Environment and Public Works Committee, I had a conversation with a Heritage Foundation witness in which I read to the witness a very similar quote from the economist Arthur Laffer, Reagan’s economist, saying: A carbon fee–where you tax the product in the ground and relieve taxes on work and effort by people–is a net win for the economy.

   I asked the witness what he thought about that, and he couldn’t dispute it.

In fact, he considers himself to be something of an acolyte of Arthur Laffer’s, so there is actually a lot of economic support for it.

   I will conclude by saying, if the topic is now not going to be denial but it is going to be the cost and benefits of climate action, I am ready to have that conversation all day long. Let’s just make sure it is the whole conversation, not just the half of the conversation that looks at what losing their subsidy means for the big oil companies, the big coal companies, the Koch brothers and the rest of the polluters A lot of my colleagues only look at one side of the ledger: how this affects the fossil fuel lobby.  If we look at the whole ledger, if we look at both sides, when we look at all of the evidence, it tells us one thing; that is, that the costs of climate change are already here. They are showing up in our lives in innumerable ways that carry real economic costs and carry real costs in terms of quality of life and our identity as a country, and in fact they may overwhelm us by century’s end.  Looking at all of the evidence shows us that significant reductions in carbon pollution will actually support jobs and economic growth.

      Finally, a revenue-neutral carbon fee would spur innovative business models and technological development in the United States. If we lose this race to clean up our carbon mess, one of the collateral injuries we will sustain is that we will not have developed a robust clean energy economy and we will find ourselves buying products from the Chinese, the Indians, the Europeans, and others.

   We need to put our industry to the test. They will rise to it. They always have. We can trust them. We can count on them, but giving them a pass does not serve their interests or ours. This will drive market forces to decrease our emissions and grow our economy.

   We have the tools to do something big. It has been proven in British Columbia. It has been proven with RGGI. All of the economists across the economic spectrum seem to agree the time is right to put a national price on carbon.

I yield the floor, and I suggest the absence of a quorum.