“Three and a half years ago, an open letter that more than 3,600 economists eventually signed declared that “climate change is a serious problem calling for immediate national action.” The signatories included 15 former chairs of the Council of Economic Advisers, more than half of whom served under Republican presidents — a display of bipartisanship that contrasts sharply with the lock-step opposition of Republicans in Congress to the national action we’re finally taking in the form of the Inflation Reduction Act (which, despite its name, is mainly a climate bill) that President Biden is expected to sign today.
While we’re getting action, however, that action isn’t taking the form called for in the letter. That huge array of economists agreed that climate change mitigation should take the form of a carbon tax — a fee levied on businesses and individuals who emit greenhouse gases. This, the letter argued, was the remedy recommended by “sound economic principles.” But the I.R.A. doesn’t include a carbon tax, nor does it introduce a system of tradable emissions permits, which would provide similar incentives.
Instead, the act relies almost entirely on subsidies intended to promote clean energy, offering tax credits for renewable energy, aid to keep nuclear plants operating, incentives to buy electric vehicles and make homes more energy efficient and more.
So what happened to the carbon tax idea? Biden administration officials are well aware of the Econ 101 case for emission taxes. Indeed, Janet Yellen, the Treasury secretary, and Cecilia Rouse, the current C.E.A. chair, were among the letter’s signatories. I also understand that logic — in fact, the introductory economics textbook I wrote with Robin Wells makes that argument in some detail. But a few months after the letter was released I made the case in a Twitter thread against being a “carbon tax purist,” arguing that an exclusive focus on carbon taxes was “dubious economics and bad political economy.” “
David Lindsay: Yes, and, the problem is still an existential crisis. We don’t have much time to change our polluting ways. Here are two comments I approved:
We’ve been seeing numerous impacts catching many scientists by surprise with how soon they are occurring. In 2014 two independent teams of scientists reported that the West Antarctic Ice Sheet is likely irreversibly retreating. 3.3 meters of sea level rise equivalent of ice there is being destabilized by a warming ocean. The paleoclimate record indicates that increasing global temperature by just 1.5-2 °C above preindustrial temperature commits the system to an eventual 6-9 meters of sea level rise, a large fraction of which could arrive within the next 100 years. Corals may not survive this century of warming and acidifying oceans, and droughts and floods linked to global warming—and conflict linked to those droughts—have already caused four countries to face famine. Because of the decades to millennial long lag between a climate forcing and our feeling the full effect, due to the thermal inertia of the ocean and response time of the ice sheets, the effects we are feeling now are largely just the beginning of the result of emissions from the 20th century. And emissions have been increasing steadily for decades. We are also seeing numerous amplifying feedbacks: loss of albedo (heat reflectivity) from ice melt, permafrost melt, methane release and massive wildfires; the Earth is starting to wrest any possible further human control of the climate away. We’re about out of time on this, if not already, and leaders are still acting as if this is not a planetary emergency.
@Herbert Here is James Hansen to explain a carbon fee. From a 2012 TED Talk. “Now the tragedy about climate change is that we can solve it with a simple, honest approach of a gradually rising carbon fee collected from fossil fuel companies and distributed 100 percent electronically every month to all legal residents on a per capita basis, with the government not keeping one dime. Most people would get more in the monthly dividend than they’d pay in increased prices. This fee and dividend would stimulate the economy and innovations, creating millions of jobs. It is the principal requirement for moving us rapidly to a clean energy future. Several top economists are coauthors on this proposition. Jim DiPeso of Republicans for Environmental Protection describes it thusly: “Transparent. Market-based. Does not enlarge government. Leaves energy decisions to individual choices. Sounds like a conservative climate plan.” But instead of placing a rising fee on carbon emissions to make fossil fuels pay their true cost to society, our governments are forcing the public to subsidize fossil fuels by 400 to 500 billion dollars per year worldwide, thus encouraging extraction of every fossil fuel — mountaintop removal, longwall mining, fracking, tar sands, tar shale, deep ocean Arctic drilling.” https://www.ted.com/talks/james_hansen_why_i_must_speak_out_about_climate_change/transcript?language=en