RESEARCH TRIANGLE PARK – Tech giant IBM is calling for implementation of a tax on carbon emissions, saying that climate change “warrants meaningful action on a global basis.”
Wayne Balta, vice president for Corporate Environmental Affairs at IBM and a member of the National Academy of Engineering, spelled out the case for Big Blue’s position in a blog post.
“The Earth’s climate is warmer now than it was before the onset of the modern industrial era, and the increased temperature presents significant adverse risks which cannot be ignored. Greenhouse gases like carbon dioxide fuel this warming,” he wrote.
“Some may debate how this happened, but that doesn’t change the need to address it. Although our collective use of fossil fuels for energy has enabled remarkable economic development, the use of fossil fuels has also resulted in substantial emissions of carbon dioxide, and the cost of these emissions has not been reflected in the price of energy. As a matter of policy, this should change.”
Source: World Bank Group
In October, the International Monetary Fund embraced the idea of a carbon tax. And a recent article in Forbes claimed a carbon tax wouldn’t kill the economy.
The World Bank defines such a tax this way: “A carbon tax directly sets a price on carbon by defining a tax rate on greenhouse gas emissions or – more commonly – on the carbon content of fossil fuels.” In a recent report, the World Bank reported a wide variety of carbon taxes are already in place around
IBM also tweeted that more is required from companies to meet climate challenges beyond the purchase of carbon offsets.
“When it comes to #ClimateChange, purchasing renewable certificates or offsets is not enough,” IBM’s Policy Lab wrote in a tweet. “Responsible companies should also make transparent commitments regarding their consumption of renewable energy.”
The “four pillars”
IBM, which employs thousands of people across North Carolina and recently acquired Raleigh-based Red Hat, says it supports a plan announced in September by the Climate Leadership Council, which includes a variety of corporate members and non-governmental organizations. The plan includes four “pillars:”
- A gradually rising carbon fee
- Carbon dividends for all Americans
- Significant regulatory simplification
- Border carbon adjustment
Big Blue “supports putting a price on carbon,” Balta wrote.
“Specifically, we are today endorsing the plan outlined by the Climate Leadership Council that would put a tax on carbon dioxide emissions, with the proceeds of that tax — a ‘carbon dividend’ — to be returned to citizens.”
Balta says tha IBM is “convinced this represents the most realistic and appropriate opportunity to get a majority of people to agree on a public policy towards carbon emissions that is mindful of both the environment and the economy. This plan would place an economy-wide $40/ton fee on carbon dioxide emissions, increasing by 5% above inflation every year, putting in place strong economic incentives for energy companies to reduce carbon emissions and for energy consumers to reduce their own energy consumption.”
According to the World Bank in a report issued in June, a $40 tax would help meet climate goals.
“About 20 percent of global greenhouse gas emissions are covered by regional, national and subnational carbon pricing initiatives and, of these, less than 5 percent are currently priced at a level consistent with achieving the temperature goals of the Paris Agreement (estimated to be between US$40–80/tCO2 by 2020 and US$50–100/tCO2 by 2030),” the World Bank said.
The dividends
The Climate Leadership Council’s plan says Americans would receive payments on a quarterly basis and adds that it believes the dividend would more than offset any increases in energy costs.
“All net proceeds from the carbon fee will be returned to the American people on an equal and quarterly basis. A family of four will receive approximately $2,000 in carbon dividend payments in the first year,” the group says.
“This amount will grow as the carbon fee increases, creating a positive feedback loop: the more the climate is protected, the greater the dividend payments to all Americans. According to the U.S. Department of the Treasury, the vast majority of American families will receive more in carbon dividends than they pay in increased energy costs. The popularity of dividends will help ensure the longevity of a bipartisan grand bargain based on these pillars.”
IBM’s carbon footprint
Balta says that IBM is not a newcomer to the commitment to reduce carbon emissions.
“IBM has reduced the carbon dioxide emissions associated with our consumption of energy by 32% since 2005,” he wrote. “We are on track to achieve our goal of a 40% reduction by 2025, a rate consistent with what scientists say is needed to limit warming to between 1.5 and 2.0 degrees Celsius.”
