Category: — — Econ_CarbonTax_CapNTrade_MN

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.

Indonesia is proposing a carbon tax of about $5 per ton of emissions in a bid to raise state revenues and meet climate goals. That’s less than a tenth of the current price of carbon permits in the European Union’s Emissions Trading System. And yet it has faced criticism from industry that it will slow down economic growth.

Drought, heat extremes, wildfires, power outages, smoke — in the past four years these have become part of our normal experience in the Napa Valley and in all winegrowing regions in the western United States.

JPMorgan Chase today released comprehensive steps it is taking in its efforts to align its financing activities with the climate goals of the Paris Agreement. As part of its Paris-aligned financing commitment announced last fall, the firm has published 2030 carbon intensity targets for the Oil & Gas, Electric Power and Auto Manufacturing sectors. JPMorgan Chase also released its new Carbon Compass^SM methodology that describes how the firm set its targets and how it will monitor progress over time.

Washington state lawmakers have passed a sweeping set of environmental regulations meant to cut net greenhouse gas emissions to zero by 2050 while pumping billions of dollars into the state coffers and addressing environmental racism. Next, they'll have to make it all work.

Many corporations, organizations, and governments have made net zero commitments, and most are leaning on voluntary carbon offsetting to achieve these climate goals. But how can we be sure that such carbon offsets demonstrate a real change in the atmosphere? And how can we approach offsetting in a way that gives rise to an actual net zero society?

The burden of climate change will fall disproportionately on the world’s poor: economic damage from increased temperatures will be worse in the Global South, and within any given country climate disruptions affect poorer people more. Yet climate action also has the potential to worsen poverty by increasing prices for basic necessities such as food and energy.

Environmental justice concerns have been at the forefront in discussions of U.S. environmental policy. They have been central, in particular, to discussions of proposals for a nationwide carbon tax to address climate change. While economists tend to favor a carbon tax as the most cost-effective way to promote reductions in emissions of greenhouse gases, progressives and EJ groups often oppose this option on the grounds that it is regressive — that it would disproportionately burden low-income households.

The Biden administration has set the social cost of carbon at $51 per ton — 7 times higher than the price set by the prior administration. What does that mean? Economists talk about “untaxed externalities” a lot. That bit of jargon allows them to discuss the failures of the vaunted free market system promoted by reactionaries and Ayn Rand fanatics without actually criticizing them.

Transitioning to a low carbon economy is in progress. It is not political. According to the Yale Program on Climate Change Communication, a majority of Americans of both parties are in favor.