In her recent op-ed piece in this newspaper (“Stop Oil Trains with Carbon Fees”), Elisabeth Robbins made the telling point that “98 percent of economists across the political spectrum support a carbon tax …”
A quick search of the Internet shows that leading economists, as well as the nonpartisan Congressional Budget Office, have concluded that a carbon tax will be far more effective than other options in reducing greenhouse gas emissions and avoiding harm to the U.S. economy due to climate-related events.
For example, Greg Mankiw, economic advisor to George W. Bush and Mitt Romney, has said “a proposed carbon fee — or carbon tax, if you prefer — is more effective and less invasive than the regulatory approach that the federal government has traditionally pursued.”
And according to George Shultz, former secretary of state: “We have to have a system where all forms of energy bear their full costs … and to me the most appealing way is a revenue-neutral carbon tax.”
The price stability of a carbon tax enables businesses to make reliable long-term projections about their expenses, resulting in better planning.
Each year CDP, formerly known as the Carbon Disclosure Project, administers a questionnaire to public companies on behalf of its signatories and makes the disclosure results public in annual reports. CDP signatories are banks, investors, wealth advisers, pension funds and other entities in the financial services sector.
According to findings from CDP’s annual disclosure process in 2013, many major publicly traded companies operating or based in the United States, from Exxon Mobil and ConAgra and Wells Fargo Bank and PG&E, have “integrated an “internal carbon price” as a core element in their ongoing business strategies.”
According to CDP’s most recent white paper: “Preparedness includes use of an internal carbon price, based on the business assumption that addressing climate change will be both a business cost and possible business opportunity, regardless of the regulatory environment.”
A revenue-neutral carbon tax and dividend harnesses the power of the free market to put a price on fossil fuel carbon and stimulate technological innovation.
That’s something all of us, regardless of our political leanings, should be able to agree on.