Senator Whitehouse praises CCL and discusses carbon pricing and CBAMs

(Senator Sheldon Whitehouse’s speech starts at 2:30)

 

Thank you all so much. I tell you: I love Citizens’ Climate Lobby. You guys are the best. There is no better environmental group and a particular shout out to my Rhode Islanders right here.

One of the things that we can often do in Congress is achieve the best political result that is possible. And there are lots of issues where you can do that. You can’t get everything you want, but you can achieve the best political result that is possible. And that’s considered to be usually a big success. Climate’s a little different, isn’t it? Because Mother Nature has a vote and hers is the stern vote. There was a TV campaign when I was a kid that said, “It’s not nice to mess with Mother Nature.” And that’s been echoed by Pope Francis, who said, you beware, you slap nature: she will slap you back.

And we have been slapping nature with carbon emissions and greenhouse gases for decades. And now we are being slapped back. We’re seeing it in the wildfires. We’re seeing it in the flooding. We’re seeing it in the heat waves. We’re seeing it all around the world. And I want to offer one word to all of you, something to consider. And that is the word zettajoule. Those of you who are scientists will know that the joule is the unit of measurement for energy, for heat energy in particular. So a joule of energy is a quantum of energy. A zettajoule has 21 zeros.

It is a massively, massively big number. It is such a big number that all of the energy created by all of the people in all of the world every year adds up to one-half of a zettajoule and of that half a zettajoule, not all of it is fossil fuel. Fossil fuel is a portion of that. And for the price of that portion of fossil fuel, we put into our oceans every single year, 14 zettajoules of excess heat energy. The oceans are being bombarded with so much extra heat that the only way you could match it mechanically would be to set off three or four Hiroshima-level nuclear devices in the ocean every second. That’s how we’re loading up the oceans with heat. And that’s just one part of the problem that we’re causing. 

So Mother Nature has a vote, and if we don’t pass Mother Nature’s test, it doesn’t matter if we pass whatever political test somebody comes up with. So this is a long way of coming back to where I started, which is thanking you, because no group in the environmental community has been more determined to get the emissions down. To get after things like carbon pricing that will get the emissions down. To understand that this is a problem that yeah, we can win it in Congress, but if we haven’t won it in nature’s equation, we still lose. It’s not enough to do what is politically possible. It is mandatory that we do what nature demands. So thank you. Thank you. Thank you. 

So before I get outta your hair, let me give you a quick summary of where I think we are right now, and the first thing I’ll say is that reconciliation is still alive. 

It turns into a pumpkin on September 30, and because we will be clearing out at some point in August and a lot of people will be pretty desperate to get back to their home states and campaign and make sure we try to hang onto the Senate in November, the time period between when we leave in August and September 30 is not very conducive to getting anything done. So although the legal expiry date for reconciliation is September 30, the practical expiry date is whatever day in August we leave. 

So that’s not a whole lot of time. But it’s our shot and what we can do with that shot right now, and what I think the positive likeliest scenario is, is that we can do a great amount of the Finance Committee clean energy tax credits — not all of them, but a lot of them. And if you look at them, that adds up to a lot of emissions reduction. The other thing that I think we can do is a methane fee and where I think we are, I’ve been watching the methane fee closely, because it’s my bill. Where we are is Chairman Carper of the Environment and Public Works Committee had what would appear to be very successful negotiations. And the result is that I think we have all 50 Democratic senators on for the renegotiated package. And as you know, in politics, there’s a saying, nothing is decided until everything is decided, but there are things along the way that are decided enough that you set them on the shelf and go onto the things that aren’t yet decided. And in my view, the methane program is now on the shelf waiting for the moment to pass. And as you know, that’s big on emissions reduction. The carbon equivalency is extremely, extremely high. And so if we can do that, that’s a big deal. 

And the last piece is either a price on carbon with a carbon border adjustment or a carbon border adjustment with a price on carbon. And if we can do that, that’s a really, really, really big deal. And it goes beyond just solving our emissions problem in the United States. It creates economic conditions that drive other less efficient countries to have to catch up with us if they want to participate in the American marketplace, which is the biggest marketplace in the world. If they want to come play in our pool, they gotta clean up their act or pay. And that really is a very, very powerful signal. You can have pledges all day long about what you’re gonna do by 2050, but when you’re getting your companies tariffed because they’re polluting — now that’s a behavior changer. You gotta do stuff now that matters, and that does. 

I’ll say…two quick things. One: the HFCs. We actually got that done and they’re even worse than methane. So if at the end of the day we’ve got HFCs, we’ve got the bulk of the Finance clean energy tax credits, we’ve got the methane fee and we’ve got a carbon border adjustment/carbon price: that’s not a bad year’s work.

The last piece out there is the so-called CBAM. The CBAM is the EU’s carbon border adjustment mechanism, and it has been very well developed. They just had a hiccup in their first vote on it, but they’re still going and they’re still targeting at having a carbon border adjustment starting in 2023 and ramping up until it’s fully in effect in 2026. So that’s happening soon. And there’s an interesting fact about it that I wanna share with you. And that is that if you look at it as a bilateral trade problem, in which the United States’ companies have to pay tariffs to the EU in order to export into the EU, because we are less efficient than they are, then it looks like we’re losing. But it’s not bilateral: it’s global. It’s multilateral. And when you compare the small tariff that the U.S. would pay with the tariffs that other manufacturing countries would pay, particularly China and India, China is three times less carbon safe than we are — three times more carbon intense; India, four times; Russia, more than four times.

So if you’re a European company and the CBAM goes into effect, and you’re looking at who’s gonna supply your widgets, we may pay a little tariff, but by God, there are gonna be a lot of widget companies that are moving to the United States of America because we are cleaner than other manufacturers. And that will be a bigger economic lift for us than the penalty of the tariffs. We win from the EU CBAM even if we don’t step up with a tariff of our own. And if we step up with a tariff of our own with a carbon border adjustment of our own, now it’s a really big win. And what we really wanna see at the end of the day is the EU, the UK, Canada, the United States, all the major economic actors on the same carbon fee platform, driving the rest of the world to clean up their act, because if you don’t clean up your act, you can’t play in our pool. That’s where we need to be. 

So I’ll close where I began, and that’s thanking all of you, because we would not be in this position if you hadn’t got on the phones, gone door to door, come to Washington, called, emailed and done all the work that you did to put life and energy into carbon pricing and carbon border adjustment; you did that. No group worked harder. And I will tell you, there are a lot of groups who are willing to walk away from that and accept a package that didn’t have that emissions reduction effect, that wasn’t tested to the standard of Mother Nature. 

So please go out, work hard, keep pushing. We are not there yet, but it is within reach. And the reason it is within reach is because of work you have already done. So go out there and do your work with real confidence and joy about what you’ve accomplished already to get us to this point. And now let’s close the damn deal and get it done. 

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