Bob Perciasepe’s remarks at the Carbon Pricing and Clean Power Solutions Forum





APRIL 15, 2015

Welcome everybody and thank you for being here. My name is Bob Perciasepe. I’m the president of the Center for Climate and Energy Solutions.

I think many of you know us but for those of you who don’t, we’re an independent, nonpartisan, nonprofit organization. We’re dedicated to bringing diverse interests together to work toward solutions to our climate and energy challenges. Today is good example of how we go about doing that.

I’m so pleased to be able to bring together top climate policy and economics experts from Brookings and Stanford; state environmental directors from Colorado, Rhode Island, and Virginia; and forward-thinking leaders from DTE Energy, Duke Energy, Exelon and Holcim. And we’re looking forward to a really good conversation.

We’re here today to talk about cost-effective and efficient ways to reduce the carbon emissions. These carbon emissions are already affecting our climate. Climate impacts are not something that’s in the future. They’re here and now. They’re in the form of rising sea levels, more frequent and intense heat waves, and more heavy downpours.

Without a doubt carbon dioxide levels in our atmosphere continue to rise, and global temperatures continue to rise. In fact, last year was the warmest year on record for the Earth since we started keeping records over a century ago.

Cities, states, and businesses are increasingly recognizing they have to live with climate impacts — and these impacts have costs. We see cities and states and business all starting to pay attention to this and take action and develop policies and programs.

Most experts will tell you that the most efficient way to deal with carbon emissions is to look at economy-wide and nationwide market mechanisms. Setting a price on carbon also sends a clear signal to the market so that businesses can make the best investment and technology decisions and seize new opportunities.

Just in the last Congress, six proposals were introduced to put a price on carbon, through a tax, or fee, or cap-and-trade programs. They didn’t pass, but the discussions continue. Congressional interest is not zero on these matters. But we also know that congressional action on these matters in the near term is not really a practical path forward. It’s going to take time to build momentum. But that momentum is continuing to grow.

Last fall, when the Climate Summit occurred in New York City, over 1,000 businesses, including some in the energy industry, signed a statement in favor of a price on carbon emissions. Added to that were 73 countries and 22 states, provinces and cities. This was a remarkable statement on the agreement and the consensus that exists at the sub-national level that looking at these approaches is important.

We see ourselves at a time when states are going to be pushing more and more into the forefront. They’re already key leaders. But the EPA proposed Clean Power Plan puts them even more on that seat of leadership.

What is at the core of the EPA Clean Power Plan and what is so vital to its success is the flexibility that it provides. EPA sets a goal and then the states innovate to meet it. As a former state commissioner, I like to say, who can be opposed to state innovation?

States can choose to use more natural gas or more zero-emission energy like nuclear or renewables. They can improve the efficiency of power plants. They can look at energy efficiency more broadly – and reduce the demand. The list is extensive. And states, acting on their own or with others, can use market-based approaches to drive innovation.

Already in this country states are using market mechanisms and pricing techniques to tackle issues on emissions. Ten U.S. states are using carbon trading programs to reduce emissions while minimizing costs. Just this week, Ontario announced it will join Quebec in linking to California’s cap-and-trade program. In this country, these states with carbon pricing policies are home to 25 percent the US population and, more importantly, to more than 25 percent of GDP. States might consider joining one of these existing cap-and-trade programs or starting their own to achieve emissions reductions.

There are a lot of other approaches to this. There’s the idea of a carbon tax, which could be revenue-neutral. We could tax something we don’t want – carbon pollution — while simultaneously reducing taxes on things we do want — like productivity and employment.

There are many steps you can take that are in between going all the way to a cap-and-trade program and doing nothing. There are steps states could take to get market-ready before the Clean Power Plan goals must be met 15 years from now. States can create common definitions, measurement and verification processes – a common currency – that can be traded across borders even without a formal multistate program. We already trade renewable energy credits across state lines in many more places than the 10 states I just mentioned that are doing cap-and-trade programs. The borders of states are porous when it comes to renewable credits and they can easily be porous when it comes to credits and trading and pricing mechanisms.

Ideas need to be put on the table. There is a lot of work that will have to happen over the next year as states start to do their plans and look into what they can learn from both the academic world and businesses that have really good ideas on how to make some of this happen.

I also want us to keep in mind that when laws were passed in the 1970s that have done a tremendous amount to reduce air pollution and water pollution and manage our waste, those laws were built on activities and programs that states were already doing. We need to not forget that. When we have states innovating, when we have states working together with the business community, we find examples for the national government to use to build an even more efficient system at the national level.

We think it’s important to examine these options, and we think the best way to do that is to bring states and business together to share knowledge and experience.

That’s why I’m so excited to have such a great lineup of panelists for today’s event. Two climate policy experts, Adele Morris from the Brookings Institution and Michael Wara of Stanford Law University, will lay the foundation for our conversation by giving us an overview of carbon pricing options and telling us how and why they work. Then we’ll have two panel discussions — with state leaders and business experts — about the challenges and opportunities of implementing those ideas.