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CEO DATELINE – Business Roundtable outlines ‘market-based’ climate change solutions

Sept. 16, 2020
By Walt Williams

Business Roundtable has released what it says are “market-based” solutions to the problem of climate change, although the group stopped short of any outright endorsements of specific policies.

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The nine-page document released Wednesday acknowledges the scientific consensus that the climate is changing and that humans are the main driver of that change. However, while many environmentalists and some Democrats have proposed new regulations to lower greenhouse gas emissions, BRT’s approach favors market incentives and warns against measures that harm U.S. competitiveness.

“Representing more than 200 CEOs from America’s leading companies, the new Business Roundtable position on climate change reflects our belief that a national market-based emissions reduction policy is critical to reducing greenhouse gas emissions to levels designed to avoid the worst effects and mitigate the impacts of climate change,” said Doug McMillon, CEO of Walmart and BRT chairman.

One potential market-based solution cited by BRT would be putting a price on carbon emissions, which would encourage businesses to lower their emissions to reduce cost. This is similar to the idea of a carbon tax that has been floated frequently in the past, but the association declined to endorse any specific policy that would establish that price.

The association was also somewhat vague in other recommendations. For instance, the group warned against policies that would harm U.S. competitiveness by causing industries to move to countries with less regulation but didn’t cite any examples. It also urged increased global engagement to address climate change but didn’t say whether the U.S. should rejoin the Paris Agreement to lower greenhouse gas emissions.

BRT did warn against potential duplicative state and federal climate policies. States such as California have passed more stringent regulations than the federal government.

“More often than not, a market-based mechanism is more cost-effective and efficient than regulations for reducing emissions,” BRT said. “Increased regulatory uncertainty can also limit long-term decision making and discourage investment.”

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