This page, featuring Scientists and Economists, is one of half-a-dozen compiling expressions of support for carbon taxes (or more targeted taxes, e.g., on gasoline) by notable individuals and organizations. Use Navigation Bar at top of page to access other pages.
Scientists
James Hansen, Director, NASA Goddard Institute for Space Studies (click here for link to view Dr. Hansen’s presentation at the Carbon Tax Center’s Dec. 9, 2008 Capitol Hill briefing):
“An effective fossil energy policy should include a tax on carbon emissions… Fuel taxes should encourage conservation, but with rebates to taxpayers so that the government revenue from the tax does not increase. The taxpayer can use his rebate to fill his gas-guzzler if he likes, but most people will eventually reduce their use of fuel in order to save money, and will spend the rebate on something else. With slow and continual increases of fuel cost, energy consumption will decline. The economy will not be harmed. Indeed, it will be improved.” (New York Review of Books, July 13, 2006, The Threat to the Planet)
“Carbon tax on coal, oil and gas is simple, applied at the first point of sale or port of entry. The entire tax must be returned to the public, an equal amount to each adult, a half-share for children. This dividend can be deposited monthly in an individual’s bank account.
“Carbon tax with 100 percent dividend is non-regressive. On the contrary, you can bet that low and middle income people will find ways to limit their carbon tax and come out ahead. Profligate energy users will have to pay for their excesses.
“Demand for low-carbon high-efficiency products will spur innovation, making our products more competitive on international markets. Carbon emissions will plummet as energy efficiency and renewable energies grow rapidly. Black soot, mercury and other fossil fuel emissions will decline. A brighter, cleaner future, with energy independence, is possible.
“Washington likes to spend our tax money line-by-line. Swarms of high-priced lobbyists in alligator shoes help Congress decide where to spend, and in turn the lobbyists’ clients provide “campaign” money.”
(Remarks to a Congressional briefing in Wasington, DC, June 23, 2008. More text plus link to entire speech, here.)
Stephen Chu, director, Univ. of California Lawrence Berkeley Laboratory, Energy Secretary-Designate: “Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.” (Times Tough for Energy Overhaul, Wall Street Journal, Dec. 12, 2008. The Journal noted that “Mr. Chu has called for gradually ramping up gasoline taxes over 15 years to coax consumers into buying more-efficient cars and living in neighborhoods closer to work.”)
William Moomaw, Professor of International Environmental Policy and Director of the Center for International Environment and Resource Policy, Tufts University: “As a first step, we should dismantle the web of policies that overwhelmingly favors fossil-fuel production and use and actively discriminates against new technologies and practices that would reduce harmful emissions… The second step is to institute federal, state, and local policies that reverse the disincentives created by the existing policy structure and force users to pay the costs of extracting, transporting, and burning fossil fuels. The most straightforward and effective policy changes would include a carbon tax.” (Article co-authored with Judy Mayzer in Jan/Feb 2007 “Can We Stop Global Warming?” issue of Boston Review; Moomaw, holder of a PhD in Physical Chemistry from M.I.T., has been a lead author on four major IPCC reports.)
Steven Running, University of Montana Professor of Ecology: “The first thing we need to do – and it’s highly unpopular – we really need to put a carbon tax that represents the impact carbon emissions have on the world. We need to have five-dollar-a-gallon gas. I’m probably going to be hung in Helena for saying that, but it’s true.” Remarks at an Audubon Society seminar, “Climate Change: What the Future May Hold for Montana’s Plant and Animal Communities,” in Helena, MT, Feb. 27, 2006 (reported by the Helena Independent Record).
Economists
Paul Volcker, former chairman of the U.S. Federal Reserve: Click here.
Arthur Laffer, Guru of supply-side economics, in a Dec. 28, 2008 op-ed in The New York Times (co-authored with U.S. Representative Bob Inglis (R-SC): We need to impose a tax on the thing we want less of (carbon dioxide) and reduce taxes on the things we want more of (income and jobs). A carbon tax would attach the national security and environmental costs to carbon-based fuels like oil, causing the market to recognize the price of these negative externalities. [B]oth Democrats and Republicans could support a carbon tax offset by a payroll or income tax cut. (Click here for more pertinent excerpts from the Inglis-Laffer op-ed.)
Gilbert Metcalf, Professor of Economics at Tuft University and a research associate at the National Bureau of Economic Research is a prominent and effective advocate of revenue-neutral carbon taxes. In August of 2007, the World Resources Institute and the Brookings Institution jointly published a policy brief by Professor Metcalf, outlining a national carbon tax paired with a reduction in the payroll tax. The brief, available here, assesses the impact of a tax of $15 per metric ton of carbon dioxide (equivalent to approximately $60 per ton of carbon) which is used to rebate the federal payroll tax on the first $3,660 of earnings per worker. This tax swap is both revenue-neutral and distributionally neutral. To see a February 6, 2008 video of Professor Metcalf discussing his plan for a revenue-neutral carbon tax, click here.
Lawrence Summers, Charles W. Eliot university professor (and former president), Harvard University (and Former Treasury Secretary): “[T]he U.S. must engage in an energy efficiency program that takes effect without delay and has meaningful bite. As long as developing countries can point to the U.S. as a free rider there will not be serious dialogue about what they are willing to do. I prefer carbon and/or gasoline tax measures to permit systems or heavy regulatory approaches because the latter are more likely to be economically inefficient and to be regressive.” (Financial Times, Practical Steps to Climate Control, May 28, 2007)
Columbia University Economics Professor, Nobel laureate (and former chair of The President’s Council of Economic Advisers and Chief Economist of the World Bank) Joseph Stiglitz: “Not paying the cost of damage to the environment is a subsidy, just as not paying the full costs of workers would be… American firms are being subsidized—and massively so. There is a simple remedy: other countries should prohibit the importation of American goods produced using energy intensive technologies, or, at the very least, impose a high tax on them, to offset the subsidy that those goods currently are receiving.” (A New Agenda for Global Warming, Economists’ Voice, July 2006)
“Economic efficiency requires that those who generate emissions pay the cost, and the simplest way of forcing them to do so is through a carbon tax. There could be an international agreement that every country would impose a carbon tax at an agreed rate (reflecting the global social cost). Indeed, it makes far more sense to tax bad things, like pollution, than to tax good things like work and savings. Such a tax would increase global efficiency.
“Of course, polluting industries like the cap-and-trade system. While it provides them an incentive not to pollute, emission allowances offset much of what they would have to pay under a tax system. Some firms can even make money off the deal. Moreover, Europe has grown used to the concept of cap-and-trade, and many are loathe to try an alternative. Yet, no one has proposed an acceptable set of principles for assigning emission rights. (Showdown in Bali, Project Syndicate, Dec. 2007)
Robert Reich, Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley, former Secretary of Labor and co-founder of The American Prospect : “What’s needed is a carbon tax — a tax on all fossil-based fuels that reflects their true social, political, and environmental costs. That should remain the goal, but as a practical matter it’s not going to happen any time soon. Republicans won’t enact a tax hike for any purpose. And right now congressional Democrats don’t have the intestinal fortitude, or the votes, to enact it on their own.” (American Prospect Online Edition, Inherit the Windfall Feb. 7, 2007)
Economist Jeffrey Sachs, director of the Earth Institute at Columbia University: “The changeover to a sustainable energy system will take decades and will require carbon taxes and emission permits to create market-based incentives for companies and individuals to switch to new kinds of electrical power plants, new kinds of automobiles and ‘green buildings.’” (Miami Herald, We Must Reverse Global Warming, Feb. 23, 2007)
“The world’s producers and consumers currently regard the air as a free dumping ground for carbon dioxide and other climate-changing greenhouse gases. We need to correct market forces—for example, by taxing carbon emissions that are offset by tax reductions elsewhere—in order to create the right incentives.” (Time Magazine, March 24, 2008)
Edwin L. Glaeser, Professor of Economics at Harvard Univesity and director of the Rappaport Institute for Greater Boston:“Smart environmentalism has three key elements. First, policies should be targeted toward the biggest environmental threat: global warming. Second, our resources and political capital are limited. This means we must weigh the benefits of each intervention against its costs. Third, we must anticipate unintended consequences, where being green in one place leads to decidedly non green outcomes someplace else. “These simple rules provide a policy road map for environmentalism. The fight against climate change requires us to reduce greenhouse gas emissions. The most effective way to reduce emissions is to charge people for the social costs of their actions with a carbon tax. A significant carbon tax would be painful — gas will cost more at the pump — but it is never easy to change behavior, and change behavior we must.” (Boston Globe, A Roadmap for Environmentalism, May 21, 2007)
Paul Portney, Dean, Eller College of Management, Univ. of Arizona (and president, Resources for the Future, 1995-2005): “[W]e’re nuts not to have instituted gradually increasing controls on CO2 and other greenhouse gases. The worst-case scenario, especially for future generations, is too scary not to be taking some preventative measures now. A carbon tax is obviously the best way to deal with this problem. It would raise revenues the government will badly need to pay for Social Security and Medicare as old fogies like me begin to retire, as well as create incentives for energy conservation, emissions reductions, and clean technology innovation.” (What Are the Biggest Environmental Challenges Facing the United States?, RFF Weekly Policy Commentary, Sept. 10, 2007)
Herman E. Daly, professor in the School of Public Policy at the University of Maryland, foremost U.S. ecological economist, author of Ecological Economics, Steady-State Economics, Valuing The Earth, among other works:
Is it hard to come up with a reasonable [climate] policy? Not really — a stiff severance tax on carbon, levied at the well head, mine mouth, or port of entry, would go a long way by both reducing carbon use and giving an incentive for developing alternative carbon-free technologies. Yes, but how do we know what is the optimal tax rate, and wouldn’t it be regressive, etc.? … [T]ax the resource throughput (that to which value is added) and stop taxing value added. Tax bads (depletion and pollution), not goods (income). Does anyone imagine that we tax income at the optimal rate? Better first to tax the right thing and later worry about the “optimal” rate of taxation, compensation for regressivity, etc. People don’t like to see the value added by their own efforts taxed away, even though we accept it as necessary up to a point. But most people don’t mind seeing resource rents, value that no one added, taxed away. And the most important public good served by the carbon tax would be climate stability, brought about by the consequent reduction in use of carbon fuels and the incentive to invent less carbon-intensive energy sources. And much of the revenue from the carbon severance tax could be rebated to the public by abolishing other taxes, especially regressive ones. Climate Change: From ‘Know How’ to ‘Do Now’, Grist, Aug. 14, 2007.
A majority of economists polled by the Wall Street Journal during Feb. 2-7, 2007: The government should encourage development of alternatives to fossil fuels, economists said in a WSJ.com survey. But most say the best way to do that isn’t in President Bush’s energy proposals: a new tax on fossil fuels. Forty of 47 economists who answered the question said the government should help champion alternative fuels. “Economists generally are in favor of free-market solutions, but there are times when you need to intervene,” said David Wyss at Standard & Poor’s Corp. “We’re already in the danger zone” because of the outlook for oil supplies and concerns about climate change, he said. A majority of the economists said a tax on fossil fuels would be the most economically sound way to encourage alternatives. A tax would raise the price of fossil fuels and make alternatives, which today often are more costly to produce, more competitive in the consumer market. “A tax puts pressure on the market, rather than forcing an artificial solution on it,” said Mr. Wyss. (WSJ, Is It Time for a New Tax on Energy?, Feb. 8, 2007; the foregoing text is lifted directly from the article.)
Harvard economist Gregory Mankiw: Perhaps the most widely published advocate for higher fuel taxes in the economics profession is Gregory Mankiw, Harvard professor and chair of the President’s Council of Economic Advisers, 2003-2005.
Mankiw powerfully makes the case for a carbon tax in an op-ed, One Answer to Global Warming, in the Sept. 16, 2006 NY Times Sunday Business Section (see our blog for excerpts and discussion). His 2006 Wall Street Journal op-ed pieces (Jan. 3 and Oct. 20) are among the many lively pieces available on Mankiw’s pro-fuel-tax blog, The Pigou Club Manifesto. (Economist Arthur Pigou, 1877-1959, developed the concept of economic externalities along with corrective “Pigovian” taxes.) On the last day of 2006 Mankiw reiterated his 2006 New Year’s Resolutions from his Jan. 3, 2006 WSJ piece, including:
I will tell the American people that a higher tax on gasoline is better at encouraging conservation than are heavy-handed CAFE regulations. It would not only encourage people to buy more fuel-efficient cars, but it would encourage them to drive less, such as by living closer to where they work. I will tell people that tolls are a good way to reduce traffic congestion — and with new technologies they are getting easier to collect. I will advocate a carbon tax as the best way to control global warming.
In a Sept. 16, 2006 post to his blog, Rogoff Joins the Pigou Club, Mankiw listed some three dozen other economists and pundits “who have publicly advocated higher Pigovian taxes, such as gasoline taxes or carbon taxes. The list includes, in addition to several individuals mentioned here, such notables from economics, finance and journalism as Alan Greenspan, Gary Becker, William Nordhaus, Richard Posner, Anthony Lake, Martin Feldstein, Gregg Easterbrook and Lawrence Summers. (Links are included.)
In a June 1, 2008 NY Times column, The Problem With the Corporate Tax, Mankiw wrote:
I have a back-up plan for [Sen. McCain]: increase the gasoline tax. With Americans consuming about 140 billion gallons of gasoline a year, a gas-tax increase of about 40 cents a gallon could fund a corporate rate cut, fostering economic growth and reducing a variety of
driving-related problems. Indeed, if we increased the tax on gasoline to the level that many experts consider optimal, we could raise enough revenue to eliminate the corporate income tax. And the price at the pump would still be far lower in the United States than in
much of Europe.
Edward Snyder, dean of the University of Chicago’s Graduate School of Business, told Reuters in late January, “The political consensus [favoring climate action] is coming together but we’re still a ways away from good policy. We need to recognize that carbon is a ‘bad,’ tax it, and let the market work.” However, as Reuters noted, “While President Bush devoted a large portion of his State of the Union address to energy, he did not utter the two magic words that Snyder wanted to hear — carbon tax.” (U.S. Consumers, Companies Feeling Green, Reuters, Jan. 28)
Tyler Cowen, economics professor at George Mason University (Cowen’s “Economic Idea #4 that voters need to hear”): Phase out all forms of capital income taxation, including the corporate income tax, and replace them with a carbon tax, including a gasoline tax. “Savings and investment boost economic growth, but when it comes to energy, global warming threatens as a major problem and our dependence on Middle Eastern oil damages our foreign policy.” Cowen directs the Mercatus Center, “which studies how societies become and stay prosperous. He is also coauthor of the popular blog Marginal Revolution.” This text appeared in U.S. News & World Report, Oct. 18, 2006, in an article, Economic Ideas for Republicans, by James Pethokoukis.
