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The world needs to reduce carbon levels, and one way is through a carbon tax, a strategy the U.S. has been debating for decades.   

With urgent calls to lower greenhouse gas emissions globally, putting a price on carbon was one of the major points of discussion among world leaders at the COP26 conference in Glasgow earlier this month. Consensus on a global carbon price is growing, according to Lord Greg Barker, executive chairman at EN+ and co-chair of the Carbon Pricing Leadership Coalition. 

“We need countries to come together to agree on international standards in order to make that big shift to the low carbon economy,” Barker told CNBC in an interview from COP26 last week. ”It would be much better for the world if there was a common carbon price.” 

As of now, Barker says there are 69 countries with a carbon price ranging from $1 to $139 per metric ton. The U.S. is not one of them.  

Barker told CNBC most economists agree that carbon pricing is the most effective tool there is to transition to a low carbon economy. Carbon pricing shifts the liability for the consequences of climate change to the polluters who are responsible, according to the World Bank.

The Biden administration has outlined $555 billion in spending to confront climate change, though the plan does not address carbon pricing. The bill does include a proposed methane fee incentivizing oil and gas companies to reduce their methane emissions. 

A policy to apply a carbon tax was considered as a “plan B” during negotiations over the current climate package, according to the New York Times, after Biden’s clean electricity program was cut from the spending bill last month.

If the U.S. administration can’t get behind the rest of the world on carbon pricing, there are other ways to follow through with the initiative, says Barker, such as regulations, taxes, and emissions trading. 

The U.S. has considered carbon import fees and emissions trading that would apply to carbon-intensive products imported to the country. “But carbon import fees only make sense if you have some kind of domestic U.S. carbon policy,” says Richard Newell, president of Resources for the Future, a nonpartisan energy and environment research organization.   

He thinks a price on carbon ultimately is achievable as part of U.S. policy as the world grapples with the seriousness of climate change and turns more to financial incentives to reach a low-carbon ecosystem that supports the entire economy.

The Biden administration has a government-wide plan addressing how climate change could affect all sectors of the U.S. economy. The plan was part of a larger agenda to eliminate greenhouse gas emissions in half by 2030 and transition to a net-zero emissions economy.  

“There is also going to be a desire to raise revenue to deal with climate change, and for other public purposes, and carbon pricing does all those things,” Newell said. He added that while an economy-wide carbon fee would be the best solution, the administration could start by applying carbon fees to individual sectors. 

As the U.S. decarbonizes areas like the power sector and automotive sector, Newell says pressure on government regulation will intensify. “There will be an increasing recognition that to really decarbonize the economy, across all sectors, there is going to be a need for some comprehensive policies,” he said.

“There has been a significant shift across the country in terms of the seriousness with which people and legislators are confronting climate change,” Newell said. ”And that will continue to build beyond the focus on particular sectors.”  

The debate over a carbon pricing mechanism right now takes place at a time of rising concerns about inflation and prices at the gas pump that have led to discussions about whether the government should tap the Strategic Petroleum Reserve. The methane fee sparked a debate with some worrying that raising the price of methane would increase electric and heating costs for individual consumers.  

Fears of rising prices for low-income households and increasing costs for businesses will need to be considered. 

“If politicians are smart and anticipate that they need to compensate, say families that might see their bills go up as a result of a carbon price, you can drive [carbon pricing] through,” Barker said.  

In a plan put together by the Climate Leadership Council, a climate advocacy group co-founded by former Secretary of State James Baker, who served in the Bush and Reagan administrations, the idea isn’t to fund government efforts to fight climate. The Climate Leadership Council’s plan outlines that revenue collected from a carbon fee is “to be returned to American households,” said Carlton Carroll, Climate Leadership Council spokesperson.  

“Nothing would do more to accelerate innovation and invest all citizens in a clean energy future than an economy-wide carbon fee, with corresponding dividends for the American people,” Carroll said. 

The group’s carbon dividends plan cites four major benefits to consumers, including an increase in household disposable income nationwide.  

Increasing carbon pricing could be done by taxing greenhouse-gas intensive goods and services, like gasoline, or by taxing carbon emitters individually. The Climate Leadership Council is among groups advocating for pricing carbon-intensive goods as part of a U.S. climate plan, “because it will go further, faster than any other single climate policy intervention,” says Carroll, “while also driving innovation throughout the economy and making families better off financially.” 

Historically, there has been some bipartisan support for a carbon tax. The first carbon pricing proposal was introduced in 1990, and there have been several other propositions since. Though none have passed, Newell said the most recent carbon pricing proposal in Biden’s social safety and climate plan piqued the interest of Congress far more than anticipated. 

The carbon tax proposed as part of the Build Back Better plan would impose a $20 fee per metric ton of carbon.

“I would say there was a surprisingly strong interest in a carbon fee as part of the ongoing budget reconciliation process,” Newell said. 

But Mindy Lubber, CEO of sustainability investment organization Ceres, told CNBC earlier this year that while a carbon tax is one way to prevent the U.S. from being locked into a fossil fuels economy and spur the development of new energy and transportation systems, it has proven controversial in the past, and is a complicated policy tool, making it harder for all sides to reach agreement on, especially in a Senate where the votes are so tight.

A carbon tax could be closer than some people think, says Flannery Winchester, spokeswoman for the progressive Citizens Climate Lobby. ”It has gone from a hopeful idea to one that is on the verge of becoming a reality,” she said.  

The White House and 49 senators were on board with a carbon tax, but not the key vote from West Virginia Democratic Senator Joe Manchin. 

“But there is clearly a lot more consensus than there’s ever been that this policy is effective for meeting America’s climate goals,” Winchester said. 

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Economists, experts call for governments to ditch hydrogen, go fully electric

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Economists, experts call for governments to ditch hydrogen, go fully electric

In a joint statement, French and German economists have called on governments to adopt “a common approach” to decarbonize European trucking fleets – and they’re calling for a focus on fully electric trucks, not hydrogen.

France and Germany are the two largest economies in the EU, and they share similar challenges when it comes to freight decarbonization. The two countries also share a border, and the traffic between the two nations generates major cross-border flows that create common externalities between the two countries.

At the same time, the EU’s transport sector has struggled to reduce emissions at the same rate as other industries – and road freight in particular is a major contributor to harmful carbon emissions issue due to that industry’s heavy reliance on diesel-powered trucks.

And for once, it seems like rail isn’t a viable option:

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While rail remains competitive mainly for heavy, homogeneous goods over long distances. Most freight in Europe is indeed transported over distances of less than 200 km and involves consignment weights of up to 30 tonnes (GCEE, 2024) In most such cases, transportation by rail instead of truck is not possible or not competitive. Moreover, taking into account the goods currently transported in intermodal transport units over distances of more than 300 km, the modal shift potential from road to rail would be only 6% in Germany and less than 2% in France.

FRANCO-GERMAN COUNCIL OF ECONOMIC EXPERTS (FGCEE)

That leaves trucks – and, while numerous government incentives currently exist to promote the parallel development of both hydrogen and battery electric vehicle infrastructures, the study is clear in picking a winner.

“Policies should focus on battery-electric trucks (BET) as these represent the most mature and market-ready technology for road freight transport,” reads the the FGCEE statement. “Hence, to ramp-up usage of BET public funding should be used to accelerate the roll-out of fast-charging networks along major corridors and in private depots.”

The appeal was signed by the co-chair of the advisory body on the German side is the chairwoman of the German Council of Economic Experts, Monika Schnitzer. Camille Landais co-chairs the French side. On the German side, the appeal was signed by four of the five experts; Nuremberg-based energy economist Veronika Grimm (who also sits on the National Hydrogen Council, which is committed to promoting H2 trucks and filling stations) did not sign.

You can read an English version of the CAE FGCEE joint statement here.

Electrek’s Take

Hydrogen-sceptical truck maker MAN to produce limited series of 200 vehicles with H2 combustion engines
MAN hydrogen semi; via MAN Trucks.

MAN Trucks’ CEO famously said that it was “impossible” for hydrogen to compete with BEVs, and even committed to building 200 hydrogen-powered semi truck to prove out that hypothesis.

He’s not alone. MAN’s board member for research and development, Frederik Zohm, said that the company is the one saying hydrogen still has years to go. “(MAN) continues to research fuel cell technology based on battery electrics,” he said, in a statement quoted by Hydrogen Insight, before another board member added that, “we (MAN) expect that, in the future, we will be able to best serve the vast majority of our customers’ transport applications with battery-electric trucks.”

With companies like Volvo and Renault and now Mercedes racking up millions of miles on their respective battery electric semi truck fleets, it’s no longer even close. EV is the way.

SOURCE | IMAGES: CAE FGCEE; via Electrive.

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Quick Charge | the terrifying Trump tariffs are finally upon us!

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Quick Charge | the terrifying Trump tariffs are finally upon us!

On today’s tariff-tastic episode of Quick Charge, we’ve got tariffs! Big ones, small ones, crazy ones, and fake ones – but whether or not you agree with the Trump tariffs coming into effect tomorrow, one thing is absolutely certain: they are going to change the price you pay for your next car … and that price won’t be going down!

Everyone’s got questions about what these tariffs are going to mean for their next car buying experience, but this is a bigger question, since nearly every industry in the US uses cars and trucks to move their people and products – and when their costs go up, so do yours.

Prefer listening to your podcasts? Audio-only versions of Quick Charge are now available on Apple PodcastsSpotifyTuneIn, and our RSS feed for Overcast and other podcast players.

New episodes of Quick Charge are recorded, usually, Monday through Thursday (and sometimes Sunday). We’ll be posting bonus audio content from time to time as well, so be sure to follow and subscribe so you don’t miss a minute of Electrek’s high-voltage daily news.

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Got news? Let us know!
Drop us a line at tips@electrek.co. You can also rate us on Apple Podcasts and Spotify, or recommend us in Overcast to help more people discover the show.

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SunZia Wind’s massive 2.4 GW project hits a big milestone

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SunZia Wind’s massive 2.4 GW project hits a big milestone

GE Vernova has produced over half the turbines needed for SunZia Wind, which will be the largest wind farm in the Western Hemisphere when it comes online in 2026.

GE Vernova has manufactured enough turbines at its Pensacola, Florida, factory to supply over 1.2 gigawatts (GW) of the turbines needed for the $5 billion, 2.4 GW SunZia Wind, a project milestone. The wind farm will be sited in Lincoln, Torrance, and San Miguel counties in New Mexico.

At a ribbon-cutting event for Pensacola’s new customer experience center, GE Vernova CEO Scott Strazik noted that since 2023, the company has invested around $70 million in the Pensacola factory.

The Pensacola investments are part of the announcement GE Vernova made in January that it will invest nearly $600 million in its US factories and facilities over the next two years to help meet the surging electricity demands globally. GE Vernova says it’s expecting its investments to create more than 1,500 new US jobs.

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Vic Abate, CEO of GE Vernova Wind, said, “Our dedicated employees in Pensacola are working to address increasing energy demands for the US. The workhorse turbines manufactured at this world-class factory are engineered for reliability and scalability, ensuring our customers can meet growing energy demand.”

SunZia Wind and Transmission will create US history’s largest clean energy infrastructure project.

Read more: The largest clean energy project in US history closes $11B, starts full construction


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