Hugh Welsh, head of DSM North America, sees opportunity in the U.S. Chamber of Commerce’s recent backing of market-based policies to combat climate change to advance support for carbon pricing on Capitol Hill.
Welsh favors a carbon tax that would reinvest the revenue in infrastructure projects more resilient to effects of climate change.
“I think that if it’s going to happen at any time, now would be the time,” Welsh told the Washington Examiner in an interview. He added if lawmakers tied a carbon pricing measure to a broader infrastructure bill, in which both President Biden and lawmakers on both sides of the aisle have expressed interest, it could be more “palatable for everybody.”
Welsh suggested the Chamber’s recent change in stance to back market-based policies to curb emissions could make more Republican lawmakers comfortable with publicly supporting a price on carbon.
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Welsh runs the North American arm of Dutch-based Royal DSM, which manufactures nutrition products and specialty materials.
The company has pledged to reach net-zero emissions by 2050, and it is moving rapidly to renewable energy. More than 50% of DSM’s U.S. operations run on renewable power, including solar farms the company has built out itself, and Welsh expects that to reach 100% likely in the next two years.
Welsh is also a vocal member of the CEO Climate Dialogue, a group of 22 leaders of companies that include oil giants, chemical companies, and utilities advocating for Congress to enact market-based climate policy urgently.
More businesses have tentatively joined in those calls. In September, the Business Roundtable, which comprises the CEOs of leading U.S. companies, lent support to a carbon price, though it didn’t endorse a particular policy such as a carbon tax or a cap-and-trade system.
Even the Chamber, which Welsh has been pushing internally for years to take a more active stance on policies to curb emissions, has recently expressed support for a “market-based approach to accelerate greenhouse gas emissions reductions across the U.S. economy.”
On Capitol Hill, however, a carbon tax still appears politically impossible. Despite big business support for carbon pricing, Republicans largely aren’t on board, at least publicly.
Welsh, though, said he has had positive conversations with Republican Sen. Mitt Romney, who recently expressed tentative support for a carbon price, as well as Sen. Lisa Murkowski and other members of the bipartisan Senate Climate Solutions Caucus.
“If it can be designed in a way that doesn’t disadvantage American business,” such as with a border adjustment fee for carbon-intensive imports, “they would be for it,” Welsh said.
“I’ve also had conversations with many Republican members of the House who would support such a position and do so publicly if they weren’t afraid of the U.S. Chamber organizing a primary against them in their district,” he added, though he didn’t name names.
Welsh described the Chamber’s statement last month backing market-based policies to curb emissions and supporting the U.S. re-entry to the Paris climate deal as a “180-degree flip.”
Welsh, along with leaders from other Chamber members such as Pfizer, Citibank, and Bank of America, established an internal working group more than two years ago to press the business lobby to switch its stance on climate change.
The Chamber responded, initially hiring an executive-level official to handle environment and sustainability issues and then standing up a Climate Task Force around a year ago.
To Welsh, though, the statement last month represents real progress. He noted the Chamber had sent a questionnaire to members in late 2020 specifically asking about climate policy issues.
What the Chamber likely heard from its big members in the insurance, finance, technology, and other industries is climate change is a huge risk to business, Welsh said.
“We need the Chamber to recognize that this is a real operational and financial risk to us [and] that we need the support of government to mitigate that risk,” Welsh added.
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Welsh said he is waiting to see whether the business lobby’s actions will match its words, including whether it will back specific carbon pricing legislation, lobby Republican lawmakers to support such measures, and actively engage with the Biden administration’s climate initiatives.
Welsh is also watching the courtrooms to see if the Chamber continues to file friend of the court briefs that appear opposed to efforts to curb emissions.
“There will be certainly plenty of areas of indication as to whether or not the Chamber is engaging in greenwashing or whether or not this is a sincere and substantive change in position,” Welsh said.
