President Trump’s decison to pull out of the Paris Climate Accords marked a depressing change of attitude in the rising young generation: a loss of hope. Climate change is arguably the most important issue to students, but the news is increasingly morbid. It does not appear reform is coming any time soon. Every “damning new climate change report” inspires less outrage and more helplessness.
A beacon of hope has been the new wave of progressives riding into Congress championing the Green New Deal. Calling for a groundbreaking investment in clean energy jobs and infrastructure, it has raised the profile of climate change politics in the national conversation and will undoubtedly take a large presence in the upcoming Democratic Presidential primaries. However, the plan does not tackle the root of global warming, which is economics. A tax on carbon is the only proper solution to this problem.
A carbon price taxes the emissions of greenhouse gases. Fossil fuels and America’s other largest industries face no economic disincentives for polluting. It is time to recognize metric tons of carbon dioxide as what they are: pollution.
Corporations seldom act based on altruism; they operate on their bottom line. If polluters have to pay for exactly what they cost the public, they are incentivized to use less carbon in production. The American economy has easily brushed off environmental regulations in the past, such as the clean air and water acts and fuel emission standards. A carbon tax would send a powerful market signal for investments in green innovations. When consumers buy less carbon-intensive products, businesses will adapt production to meet demand. If the government stops subsidizing fossil fuels, they can start subsidizing electric cars and renewable energy.
The tax’s economic consequences make it politically toxic. The price of goods and services would noticeably increase in the short-term. However, in the long-term, the government’s National Climate Assessment estimated that America’s GDP could shrink by ten percent as a result of damage to productivity, agriculture and infrastructure. Should we be paying from our pocketbooks now, or with our homes, jobs and lives later?
The worst side effect of carbon pricing would be a tough burden on low-income Americans and workers in regions that rely on carbon-intensive energy, especially coal. Fortunately, there are ways to mitigate this regressive hit.
The Congressional Budget Office and Joint Committee on Taxation have estimated that with a tax of $25 per metric ton on most emissions of greenhouse gases, federal revenues would increase by $977 billion between 2017 and 2026. According to a briefing from the Tax Policy Center, the surge of revenue could pay for compensation to fossil fuel workers and reductions in Social Security contributions from low-income households.
A recently adopted revenue-neutral carbon pricing plan in Canada delivers refunds to households of a sum greater than they would pay in increased taxes: $135 for adults, $40 for children. The province of British Columbia, which individually implemented carbon pricing in 2008, has reported GDP growth of 17 percent and net emissions drop of 4.7 percent over ten years.
The landmark 2018 U.N. Climate Change Report says that carbon pricing is the number one strategy for preventing global temperature increases beyond the 1.5 and 2-degree mark, where the worst environmental consequences will begin. There will be a time where today’s young people are tomorrow’s members of Congress and we act with an understanding of this dire situation. But this can’t wait. The only way America can do its part in preventing a global catastrophe is widely implementing a carbon tax and transitioning to clean energy infrastructure.