The Most Business-Friendly Plan for Cutting Carbon in Arizona

Guest blog post by Zach Bernstein, Manager of Research and Social Media at American Sustainable Business Council, which advocates for policy change at the federal and state level that supports a more sustainable economy Zach was in Phoenix earlier in April for a Town Hall Discussion on Carbon Pricing.  He can be reached at [email protected].

Page - Centrale thermique de Navajo

Even folks like me who don’t live or work in Arizona know one thing about it: It’s really hot. As the tenth-hottest state in the nation, Arizona is among the states best positioned to embrace solar power. In fact, you've already started. But how can you ensure those gains continue? Business people in particular should be interested in what promises to be the most business-friendly approach: Putting a price on carbon.

It's a simple, straightforward, market-based strategy for reducing greenhouse gas emissions. It avoids the pitfalls of government regulations that pick winners and losers, and instead harnesses the innovation and creative spirit that define the American economy. And it provides a possible transition path for those communities dependent on fossil fuels. But the idea is not well-known yet, especially in business circles. That's why I was in Phoenix recently, to co-host an event with Local First Arizona for Arizona business people to learn about this promising strategy for addressing climate change.

Make no mistake, businesses are worried about climate change. More than half of small business owners nationwide say climate change will likely hurt them in the future, according to polling from our organization, the American Sustainable Business Council.

Solar_array_asuSolar is an example of how climate mitigation and economic growth can go hand in hand, and Arizona has come a great distance already. According to the Solar Energy Industries Association, Arizona ranked sixth in the country in 2015 for installed solar electric capacity. Nearly 400 solar companies operate in Arizona, employing 6,900 people. Best of all, solar helps consumers and businesses save on energy bills – as evidenced by companies like Walmart, Intel, and IKEA, which have invested in solar arrays.

Not everyone is happy about this. For example, some in the business community want legislation that would do away with net metering, which currently lets customers with solar panels sell energy back to the grid and enjoy lower electricity bills. Opponents of net metering are clearly concerned that this practice only benefits those able to afford solar, while transferring the cost to everyone.

But what if it was suddenly in everyone’s economic interest to buy and use cleaner electricity? That’s what putting a statewide price on carbon would do.  It leverages market forces by setting a uniform price for carbon pollution. This provides a clear incentive for market participants to reduce their carbon emissions, but leaves it up to each of them to decide how.

The price can be set low to start, letting emitters adjust more easily. It can then be increased over time to achieve our carbon reduction goals. Meanwhile, the funds raised can be used to invest in various state priorities, deliver tax cuts or rebates, or support communities that depend on fossil fuel production.

We know this can work. The Canadian province of British Columbia instituted a price for carbon in 2008, with positive results for both energy usage and economic activity. And many companies, including the “Big Five” oil companies, already include carbon pricing in their internal budgets. The business community is more prepared than you'd think.

Both of Arizona's senators, John McCain and Jeff Flake, have supported carbon pricing in the past. Hopefully, they will do so again – because while the sun may keep shining regardless, Arizona's future looks brightest when we harness it.