Former Federal Reserve Chairs and Nobel Economists Solidify Support for a Price on Carbon
January 16, 2016 | USA | Climate Leadership Council
Yesterday evening, the Climate Leadership Council, a CPLC Partner, announced that “27 Nobel laureates, all 4 former Fed Chairs, and 15 former Chairs of the Council of Economic Advisers unite behind carbon dividends as the bipartisan climate solution.”
The announcement was covered by the Wall Street Journal, Axios, Financial Times and the Washington Post.
Here is the full “Economists’ Statement on Carbon Dividends” from the CLC’s website:
Global climate change is a serious problem calling for immediate national action. Guided by sound economic principles, we are united in the following policy recommendations.
I. A carbon tax offers the most cost-effective lever to reduce carbon emissions at the scale and speed that is necessary. By correcting a well-known market failure, a carbon tax will send a powerful price signal that harnesses the invisible hand of the marketplace to steer economic actors towards a low-carbon future.
II. A carbon tax should increase every year until emissions reductions goals are met and be revenue neutral to avoid debates over the size of government. A consistently rising carbon price will encourage technological innovation and large-scale infrastructure development. It will also accelerate the diffusion of carbon-efficient goods and services.
III. A sufficiently robust and gradually rising carbon tax will replace the need for various carbon regulations that are less efficient. Substituting a price signal for cumbersome regulations will promote economic growth and provide the regulatory certainty companies need for long- term investment in clean-energy alternatives.
IV. To prevent carbon leakage and to protect U.S. competitiveness, a border carbon adjustment system should be established. This system would enhance the competitiveness of American firms that are more energy-efficient than their global competitors. It would also create an incentive for other nations to adopt similar carbon pricing.
V. To maximize the fairness and political viability of a rising carbon tax, all the revenue should be returned directly to U.S. citizens through equal lump-sum rebates. The majority of American families, including the most vulnerable, will benefit financially by receiving more in “carbon dividends” than they pay in increased energy prices.
ORIGINAL CO-SIGNATORIES
George Akerlof
Nobel Laureate Economist
Robert Aumann
Nobel Laureate Economist
Martin Baily
Former Chair, CEA
Ben Bernanke
Former Chair, Federal Reserve
Former Chair, CEA
Michael Boskin
Former Chair, CEA
Angus Deaton
Nobel Laureate Economist
Peter Diamond
Nobel Laureate Economist
Robert Engle
Nobel Laureate Economist
Eugene Fama
Nobel Laureate Economist
Martin Feldstein
Former Chair, CEA
Jason Furman
Former Chair, CEA
Austan Goolsbee
Former Chair, CEA
Alan Greenspan
Former Chair, Federal Reserve
Former Chair, CEA
Lars Peter Hansen
Nobel Laureate Economist
Oliver Hart
Nobel Laureate Economist
Bengt Holmström
Nobel Laureate Economist
Glenn Hubbard
Former Chair, CEA
Daniel Kahneman
Nobel Laureate Economist
Alan Krueger
Former Chair, CEA
Finn Kydland
Nobel Laureate Economist
Edward Lazear
Former Chair, CEA
Robert Lucas
Nobel Laureate Economist
N. Gregory Mankiw
Former Chair, CEA
Eric Maskin
Nobel Laureate Economist
Daniel McFadden
Nobel Laureate Economist
Robert Merton
Nobel Laureate Economist
Roger Myerson
Nobel Laureate Economist
Edmund Phelps
Nobel Laureate Economist
Christina Romer
Former Chair, CEA
Harvey Rosen
Former Chair, CEA
Alvin Roth
Nobel Laureate Economist
Thomas Sargent
Nobel Laureate Economist
Myron Scholes
Nobel Laureate Economist
Amartya Sen
Nobel Laureate Economist
William Sharpe
Nobel Laureate Economist
Robert Shiller
Nobel Laureate Economist
George Shultz
Former Treasury Secretary
Christopher Sims
Nobel Laureate Economist
Robert Solow
Nobel Laureate Economist
Michael Spence
Nobel Laureate Economist
Lawrence Summers
Former Treasury Secretary
Richard Thaler
Nobel Laureate Economist
Laura Tyson
Former Chair, CEA
Paul Volcker
Former Chair, Federal Reserve
Janet Yellen
Former Chair, Federal Reserve
Former Chair, CEA
