The latest report by the Intergovernmental Panel on Climate Change warns that deep cuts in carbon dioxide emissions are needed to reduce the risk of even more severe impacts from global warming in the coming decades. These impacts include sea level rise, extreme weather and the ravaging of the world’s coral reefs. This IPCC report concludes that putting a high price on CO2 emissions is critical to any climate plan.
One policy that should be considered is a revenue-neutral carbon fee and dividend program. This involves putting a steadily rising fee on oil, coal and natural gas and returning all of the money to the American people in a monthly dividend check. A study by Regional Economic Models, Inc. concludes that the stimulus from the dividend would actually lead to economic growth.
A border tariff adjustment on imports from countries that don’t price carbon similarly would protect American businesses and encourage other nations to adopt their own carbon pricing systems to gain access to valuable U.S. markets.
Yale professor William Nordhaus was recently awarded the 2018 Nobel Prize in Economics for his work on climate change. In his book, “The Climate Casino: Risk, Uncertainty and Economics for a Warming World,” Nordhaus writes that to attain the level of emissions reductions needed to slow climate change, “the incentives must be for everyone, millions of firms and billions of people spending trillions of dollars” in a low-carbon economy. Nordhaus states that “the most effective incentive is a high price for carbon.”
To find out more about carbon fee and dividend, go here. And remember to call your members of Congress and urge them to work together on climate solutions.
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