CCL's Economics Policy Network: A Resource For Understanding Ongoing Policy Debates

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By Jonathan Marshall, CCL CA Marin County, Founding Member of the Economics Policy Network

Over the past several years, a growing number of critics in the climate activist community have challenged the consensus among policy experts in favor of using market-based taxes on fossil fuels to induce households, businesses, and other institutions to reduce their carbon footprint. To help volunteers stay current with economic information and accessible talking points for their conversations, the Economics Policy Network Action Team provides a variety of helpful white papers that we encourage CCL members (and their friends!) to check out. For example, I responded to one recent critical essay in a forum post  that highlighted the political viability of the important economy-wide solution of carbon fee and dividend.

Many critics may accept the theoretical merits of imposing a “carbon tax” or “carbon fee” on greenhouse gas pollution but argue that it will never become politically viable. They incorrectly conclude from the current inadequacy of most carbon-pricing programs around the world that better ones cannot be implemented; they apply insights from political science selectively; they omit difficulties inherent in implementing regulations and industrial policy at the required speed and scale; and they often conflate flawed cap-and-trade schemes with superior carbon-fee-and-dividend policies, which attract widespread support in surveys of U.S. voters. Climate activists should also reject their unsupported assumption that advocacy of fee-and-dividend policies will detract from, rather than strengthen, complementary regulatory and subsidy policies to curb greenhouse gas emissions.

In general, carbon-pricing advocates agree with critics on several key points:

  1. Most experts have long advocated raising the cost of greenhouse gas pollution as an effective way to curb harmful emissions rapidly and at relatively low cost.
  2. However, carbon pricing has not yet been implemented widely or robustly enough to make a major dent in global greenhouse gas emissions.
  3. Implementing tougher carbon pricing, like all major climate policies, is a major political challenge, given opposition from well-heeled industry lobbies and the strong distaste of most voters for higher energy and consumer costs.
  4. Carbon pricing is not a “silver bullet.” Well-targeted regulations, subsidies, and public investments can enhance the effectiveness and reach of carbon taxes.

However, proponents of carbon taxes part company with some harsher critics in key respects:

  1. Points 2 and 3 above do not logically support a conclusion that well-designed carbon fees are politically infeasible. History is replete with examples of committed movements overcoming political challenges and achieving major change—for example, the vote for women, civil rights laws, and same-sex marriage. Grassroots organizations like CCL exist to empower voters and their elected representatives to make big political changes.
  2. Many critics make the obvious point that voters dislike higher taxes but fail to seriously address proposals to combine carbon fees with “dividends” that would highlight the benefits by making such programs economically just and financially attractive for most low- and middle-income households.
  3. Critics do not support their crucial implicit assumption that climate politics is a zero-sum game, i.e., that support for carbon pricing must come at the expense of other measures. On the contrary, carbon taxes or fees would supercharge the effectiveness of many other climate policies—accelerating the transition to cleaner energy, transportation, and industrial production, and promoting technical innovation.

For more information we encourage any interested CCL volunteer to explore and join the Economics Policy Network here and review recent pieces we've posted to support CCL's broader network:

Posted by Brett Cease on Mar 8, 2021 9:26 PM America/Los_Angeles

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