Top Economists Back New Carbon Tax Plan, But It Still Wouldn't Be Enough

Even with the new plan, more drastic steps would need to be taken to cut carbon emissions in time.
The Eagle Creek wildfire burns near the Beacon Rock Golf Course in North Bonneville, Washington, Sept. 4. A proposed carbon t
The Eagle Creek wildfire burns near the Beacon Rock Golf Course in North Bonneville, Washington, Sept. 4. A proposed carbon tax might help avoid the worst effects of climate change, but the current administration has shown no desire to cut CO2 emissions.

Top economists, including Alan Greenspan, have signed a statement expressing their support for a new tax on greenhouse gas emissions that would combat climate change while giving back revenue to taxpaying Americans. But lawmakers would need to act fast to pass it, and even then, more drastic steps would still need to be taken to combat the growing threat.

In a letter published by The Wall Street Journal on Wednesday, 45 economists said a carbon tax “offers the most cost-effective lever to reduce carbon emissions at the scale and speed that is necessary” to fight climate change.

The new tax would affect the price of goods or services that emit carbon, like fossil fuels. Economists said energy bills and gasoline prices would rise at first, but they called on the government to return that tax revenue directly to American citizens. 

“The majority of American families, including the most vulnerable, will benefit financially by receiving more in ‘carbon dividends’ than they pay in increased energy prices,” the letter said.

Both Republicans and Democrats on the Council of Economic Advisers signed the letter, including Greenspan, Paul Volcker, Ben Bernanke, Janet Yellen and more than two dozen other economists who have received the Nobel Memorial Prize in Economic Sciences.

Despite the overwhelming support for the plan, it’s unlikely to be a top priority in the current White House administration, where the issue of climate change has been set aside.

“There is no appetite on our side to do” a carbon tax, Matthew Rooney, the head of the economic growth initiative at the George W. Bush Institute in Texas, told The Washington Post. “Maybe if Mar-a-Lago gets washed away, that will change.”

And scientists say that a carbon tax alone would not be enough to cut emissions by 45 percent in 12 years, a necessary reduction that humanity needs to hit if we value the continuation of our species and want to avoid the cataclysmic effects of a 2 degree Celsius rise in temperatures from preindustrial levels. 

Still, the new plan would be a start that would slow climate change and also see money go back in the pockets of U.S. taxpayers. 

“This is one of the few ideas of economic policy that commands broad, bipartisan support,” former Harvard University President and U.S. Treasury Secretary Larry Summers told Bloomberg. “Nowadays on economic policy, we don’t see much of that.”