It’s not likely the United States will continue to be a reliable champion for addressing climate change in the coming years. President-elect Donald Trump’s actions thus far do not bode well, particularly his appointment of Scott Pruitt, a principal architect to dismantle federal climate mitigation policies, to the helm of the Environmental Protection Agency. As it stands, a generation of federally funded climate science intelligence and public policy advancement is at serious risk.

Deborah Gordon
Gordon was director of Carnegie’s Energy and Climate Program, where her research focuses on oil and climate change issues in North America and globally.
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It’s was no surprise, then, when Vice President Joe Biden recently urged Canadian Prime Minister Justin Trudeau and German Chancellor Angela Merkel to “step up to the world stage and lead in facing challenges.” Biden nailed it: The world needs Canada and Germany now more than ever, and climate change is perhaps the foremost challenge. It’s a threat so serious and widespread that it requires solid partnerships, thoughtful leaders, clear rules of the road, and real innovation.

But Trudeau and Merkel can’t do it alone. They’ll need California’s help too.

With an economy that rivals many other nations, California functions as a laboratory of democracy and has been a climate leader for decades. Together, this international triumvirate of climate cohorts can collaborate to change the world energy order and safeguard the global climate. Any policies they develop and any innovations they engender are more likely to be transformational if these governments act together rather than in isolation.

The most important step to address climate change is to put a smart price on carbon. Without a monetary value placed on total greenhouse gas (GHG) emissions, the market will not be able to act efficiently or resiliently. A smart tax that accounts for all emissions through the long and involved energy supply chain — through producers, generators, transporters, refiners, and end users — must be comprehensive and consistent so as not to distort markets. The broader based the tax, the less steep it needs to be for maximum effectiveness.

Canada, Germany, and California are each already involved with assigning a price to GHG emissions. Canadian ministers just released the Pan Canadian Framework on Clean Growth and Climate Change, which establishes a benchmark for pricing carbon — be it a carbon tax, carbon levy, performance-based emissions system, or cap-and-trade system — applied to a broad set of emission sources throughout Canada by 2018.

Germany, along with Canada, California, and other national and subnational governments, is a key member of the Carbon Pricing Leadership Coalition, a voluntary partnership formed to advance the long-term objective of a carbon price applied throughout the global economy.

California enacted an emissions trading system in 2013, formally linking to Quebec’s system in 2014. And, this past summer, the California State Senate passed a resolution for a revenue-neutral carbon tax that would refund revenues to the low- and middle-income Americans.

It will take a price on carbon to spur technological breakthroughs, especially in the energy sector. Of all the potential clean energy alternatives, hydrogen has long been thought of as the endgame. If produced carefully, this is by far the cleanest of all energy sources. Germany has long been chasing hydrogen with some success along the way. In 2017, it will put the first hydrogen-powered train into service, replacing dirtier diesel fuel. Germany has also invested nationally in hydrogen cars, refueling stations, and just last year opened a plant that uses wind power to generate hydrogen from water.

California, too, has actively supported a bevy of hydrogen development efforts, including using excess renewables from solar panels and wind farms to make hydrogen from water. Germany and Canada already have such systems in place. For Canada’s part, hydrogen could play a critical role in the future development of oil sands in a climate-responsible manner. Since extra-heavy oils are all naturally deficient in hydrogen, and the needed addition of zero-GHG hydrogen derived from renewable resources instead of hydrogen derived from fossil fuels could significantly reduce the GHG footprint of these oils, creating a firm bridge between the oil sector and non-fossil-fuel energy production and storage.

California and Germany are economic global engines that cannot fully fuel themselves. Canada is an energy resource powerhouse. The need to safely procure and sustainably supply energy in a warming world can be advanced by putting a price on carbon, which will in turn whet appetites for durable innovation. Together these three leaders could be the combination to unlock our energy future.

If anyone is taking notes, intelligence from the outgoing administration teaches us that Canada, Germany, and California could help bolster a global clean energy economy. And that’s something we may sorely need in the years ahead.

This article was originally published in the Pacific Standard.