Illinois is on the road to climate action, but, it's a long trip

After five years of turbulent efforts, Illinois finally achieved its next big step in climate action. First forming as the Illinois Clean Jobs Coalition, multiple environmental groups then had to prevail over utility company scandals, changes in political leadership, threats by organized labor and challenges from environmental justice groups. Finally, in mid-September 2021, Gov. Pritzker signed the Climate and Equitable Jobs Act (CEJA) into law. This was a hard fought, major feat that deserves our admiration and appreciation.

The legislation sets Illinois as a national climate leader and makes it the first state in the Midwest to commit to net-zero carbon emissions in its electricity sector. The goals of the legislation are laudable - raising renewables share of the supply to 40 percent by 2030, 50 percent by 2040, ultimately becoming carbon-free by 2050. It achieves this while ensuring the associated jobs are fairly distributed with a focus on disadvantaged communities.

While CEJA sets the right destination for climate policy for the state, there may be potholes and twists on the road to get there. All of the obstacles from the past can give rise to additional challenges in the future.

Potholes on the road can arise from keeping public opinion onboard. The policy is based on setting renewable portfolio standards for the electricity generation. The funding of the transition is accomplished through a variety of subsidies, rate increases, changes to utility rate calculations and across-the-board utility fees. In some cases, subsidies to polluters were needed in order to remove the political obstacles they posed. While CEJA includes programs to help low- and middle-income households, it may not do it widely enough, or, visibly enough.

The twists in the road may arise from what other states do. Energy policy directly affects the visible cost of energy to consumers and businesses. Non-market-based policies based on renewable portfolio standards can often lead to ineffective cost decisions that needlessly raise the cost of energy. This opens the door for non-climate focused states choosing to compete for Illinois' businesses with lower energy costs.

Four things are needed for Illinois to stay on course: 1) reduce the opportunity for energy-intensive industry to move out of state, 2) ensure equity in energy costs by making the right people pay; polluters should pay and not be paid, 3) add incentives to reduce emissions from transportation and industry, 4) provide visibility and transparency to the mandated fees of the transition.

All four of the items can be achieved through one policy action, establishing a national carbon fee and distributing at least a portion of the fee back to households as a dividend or "carbon cashback" payment. Recently multiple groups of economists across the Midwest, including Illinois, have called for such a market-based approach as a fundamental federal climate policy. Such a policy should be viewed not as undermining CEJA, but, putting a strong policy buttress around it.

So, as we pause to celebrate the accomplishment of CEJA, we should also program our climate policy GPS to ensure we reach our destination by including a national carbon fee and dividend in the upcoming budget reconciliation act currently being developed in the U.S. Congress.

• Mike Zanillo, of Kildeer, is a graduate of the University of Chicago with a degree in economics and a retired information technology executive who volunteers with lobbying Congress on climate issues.