Tuesday, April 07, 2020

Davos elite want to plant 1 trillion tress to help the planet, but many still fight a carbon tax

Jan 25. 2020
Photo Credit:  World Economic Forum / Mattias Nutt
Photo Credit: World Economic Forum / Mattias Nutt
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By The Washington Post · Heather Long 

DAVOS, Switzerland - Leaders of the world's most powerful companies sent one clear message this week as they gathered in this ski chalet town for the World Economic Forum: They care about the environment -- to a point.

With the Australian bushfires raging and teenage activist Greta Thunberg proclaiming "our house is still on fire," business leaders were eager to talk about how they are eliminating plastic water bottles at their headquarters, installing solar panels on their homes and corporate buildings and planting a lot of trees.

Nearly everyone attending the Davos events committed to join the new "1 trillion tree" initiative to plant an abundance of trees by 2030. Even President Trump signed on despite his insistence that "prophets of doom" about climate change are wrong.

But conversations grew tense when someone brought up putting a price on carbon.

"If you want to put a tax on people, go ahead and put a carbon tax. That is a tax on hard-working people," said U.S. Treasury Secretary Steven Mnuchin on a panel Friday. He argued a tax was unnecessary, because technology would almost certainly bring down clean energy costs.

Economists across the political spectrum overwhelmingly say the best way to tackle climate change is to enact a carbon tax or "cap and trade" system, where there's a limit on carbon emissions and companies that go past the limit must purchase credits.

But at the World Economic Forum, the idea is still a somewhat dicey subject, at least among CEOs and government leaders from certain parts of the world.

"I was in a few discussions where we talked about the price of carbon. That's definitely something there is no agreement on," said Douglas Peterson, chief executive of financial firm S&P Global, in an interview on the sidelines of the forum.

Few chief executives are brave enough to publicly say they are against a carbon tax. They are fearful of the 17-year-old Thunberg and her allies calling them out on Twitter or in speeches.

At Davos, the heads of large companies gather behind closed doors for an International Business Council meeting. Brian Moynihan, head of Bank of America, put forward a framework companies could use to assess their carbon footprint and environmental risk, according to two attendees who spoke on the condition of anonymity. There was no formal vote on it, but one attendee estimated at least a third of the room looked annoyed and unconvinced.

The hesitancy among some corporate leaders to do a real assessment of carbon risk is indicative of how far there is to go to see wide-scale mitigation, advocates say. Environmental activists blasted Davos attendees for paying lip service to caring about environment but not actually doing much.

Banks and pension funds that attend Davos are "collectively financially exposed to fossil fuel companies to the tune of $1.4 trillion," Greenpeace reported.

"We got the feeling WEF [the World Economic Forum] was locked in a bubble of positivity," said Loukina Tille, an 18-year-old climate activist in Switzerland, as she protested outside the conference center in Davos on Friday with Thunberg and others.

Mnuchin's dismissal of a carbon tax did not sit well with European leaders. Numerous European officials from Britain's Prince Charles to European Commission President Ursula von der Leyen took to the Davos stage to endorse putting a price on carbon.

"Do we want to go down in history as the people who did nothing to bring the world back from the brink?" Prince Charles said.

The European Union has committed to becoming carbon neutral by 2050 and already has a cap and trade system in place.

Von der Leyen threatened to impose a border tax -- similar to Trump's tariffs -- on goods coming into Europe that don't come from a country with a price on carbon. The tax "would hit importers from countries that do not respect international climate goals," she said.

Canada started a tax of $20 per ton of carbon dioxide last year that is gradually set to rise. Other countries are moving even more aggressively. Finland is aiming to be carbon neutral by 2035.

"It would be very effective if we had a global carbon price," Finnish Prime Minister Sanna Marin said in an interview with The Washington Post. "We don't have the luxury of time. We need to act now. That's a fact."

Some companies like Microsoft and Verizon are already planning ahead, based on a price of carbon they have calculated internally. A number of chief executives told The Washington Post that they think it's inevitable there will be a carbon tax or cap and trade system in most major markets, if not globally, in the coming years.

An incentive price is needed "to move behavior," said Verizon chief executive Hans Vestberg, a native of Sweden, in an interview. Verizon has committed to becoming carbon neutral by 2035.

Axel Weber, the chairman of UBS bank, put it this way: "Whatever that price is, it will increase over time" and he encouraged companies to start planning for it.

 

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