Understanding Economic Support For Carbon Fee & Dividend Policies

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Description
The economic case for a revenue-neutral carbon tax, such as the Energy Innovation Act has never been stronger. This training evaluates the climate and health benefits of the Energy Innovation Act and compares them to the policy costs to outline why there is such widespread support from economists for such policies. 
Breadcrumb
/topics/carbon-fee-and-dividend
TOC and Guide Section
 
Economists Statement

More than 3,500 economists, including many of the most preeminent, have endorsed addressing climate change with a gradually rising price on carbon in which all funds are returned to households.  Second, the economic cost of not addressing climate change has never been more apparent to the US populace, raising the urgency for policy that will reduce these expensive damages.  However, as the peer-reviewed economic literature starts modeling HR 763 specifically, we will incorporate those findings into how we evidence that a RNCT is "Good for the Economy".

Specifically, economists assert a carbon fee corrects a market failure that leads to poor (suboptimal) resource allocation.  Just as a cigarette tax yields less smoking and less expenditures for treating the related diseases (e.g., lung cancer and emphysema), a carbon tax yields less fossil fuel emissions and less expenditure on related health issues and the cleanup and recovery from climate damages caused by wildfires, floods, hurricanes, sea level rise, etc.

Peer Reviewed Literature

That a revenue neutral carbon tax such as the Energy Innovation Act (HR 763) improves the economy and society is generally evidenced through cost/benefit analysis.  The peer-reviewed literature indicates that the policy benefits of improved health and reduced climate damages are roughly four to ten times the costs of the policy which stem from a shift towards slightly higher cost energy sources.

According to the peer-reviewed economic literature, what happens to GDP under a revenue neutral carbon tax?  As with a cigarette tax, the impact is minimal, but largely depends on what is done with the revenue raised.  Generally, model estimates will show a slight decline, but these estimates do not include the climate, health, or other benefits of the policy.  Models are being developed that include these benefits and will show much more positive results.  See the "Resources" tab for additional information and studies.

Length
Press play to start the video (35m 09s)
https://vimeo.com/showcase/6073902
Video Outline
To skip ahead to a specific section go to the time indicated in parenthesis.

Introduction and Agenda
(from beginning)

Economists Statement on Carbon Dividends
(3:53)

Health Co-Benefits
(11:54)

Climate Benefits
(15:47)

Policy Costs vs. Benefits
(24:19)

Instructor(s)
Jerry Hinkle
Downloads

Download PowerPoint or Google Slides presentation.

Download the video.
Audio length
Press play to start the audio (35m 09s)
Audio embed code
Audio Outline

To skip ahead to a specific section go to the time indicated in parenthesis.

Introduction and Agenda
(from beginning)

Economists Statement on Carbon Dividends
(3:53)

Health Co-Benefits
(11:54)

Climate Benefits
(15:47)

Policy Costs vs. Benefits
(24:19)

Instructor(s)
Jerry Hinkle
Go Deeper
Questions? Contact Jerry Hinkle at jerry@citizensclimate.org
Discussion Topic
Pose your questions with economic dimensions for CCL's Economics Policy Network Action Team.
To Print
Instructions for printing this page on Community.
Category
Training
Topics
Climate Policy
Format
Audio / Video, Presentation
File Type
Google Slides, PowerPoint (.pptx)