A Much Needed American Carbon Tax

I support a $50/ton carbon tax. It will be beneficial for our nation’s economy, as well as the future of our planet. In the past, critics have presented this policy as a choice between our economy and the environment. “Do we really want to destroy our economy for the possibility of some far-off event?” they ask. However, this question has a false pretense. Studies from top scientists and top economists arrive at the same conclusion - The benefits of a carefully implemented carbon tax far outweigh the costs. Here are a few evidence-based reasons why supporting a local carbon tax is critical to our future. It is one of the most effective ways to decrease CO2 emissions and mitigate climate change. “Under the $50/ton scenario, emissions fall 39 to 46 percent below 2005 levels by 2025, putting the U.S. ahead of its pledged Paris goal of 26 to 28 percent by 2025.” ¹ According to a report from the International Monetary Fund, a carbon tax is the single most powerful method to fight climate change.² As mentioned previously, a $50/ton carbon tax would not have a significant negative effect on the economy. The Baker Institute for Public Policy at Rice University calculated that the macroeconomic effect is quite small - “Well under 1 percent of GDP in either direction.” While some of the individual price increases may seem concerning without proper context, the projected price increase would be well within the margin of fluctuation that occurs naturally every few decades, according to the IMF.³ But is a $50/ton carbon tax too extreme? The science says no. Admittedly, $50 may not be enough to create the response we need in the long run but it is a fine place to start. The United Nations currently recommends a carbon tax of between $135 and $5,500 per ton.⁴ Another finding from an IMF report projects that a $75/ton carbon tax will correspond to a 2-degree Celsius rise in the earth’s temperature.⁵ Even this will create a sea-level rise of more than half a foot in over 70 percent of the earth’s coastline, leading to flooding and erosion.⁶ Shifting back to the economic aspect of the policy, according to the Federal Reserve, the lack of a carbon tax could lead to a widespread economic crisis due to damage caused by increasingly erratic weather patterns. In fact, extreme weather is already forcing many farm and utility companies to declare bankruptcy due to the damage.⁷ Finally, many countries around the world have already successfully enacted a carbon tax. This includes economic leaders like Japan, South Korea, Britain, Canada, and the EU.⁸ None of these countries have suffered an economic collapse as a result. For instance, as of 2019, Japan’s unemployment rate was just 2.29%.⁹ These forward-thinking countries understand that it is time to pass serious legislation that will give our children a brighter future. SOURCES 1. Roberts, David. “The 5 Most Important Questions about Carbon Taxes, Answered.” Vox , Vox, 20 July 2018 2. Roberts, David. “The 5 Most Important Questions about Carbon Taxes, Answered.” Vox , Vox, 20 July 2018 3. Newburger, Emma. “A Carbon Tax Is 'Single Most Powerful' Way to Combat Climate Change, IMF Says.” CNBC , CNBC, 10 Oct. 2019 4. Amadeo, Kimberly. “How a Carbon Tax Can Solve Climate Change.” The Balance , 27 Oct. 2020 5. Newburger, Emma. “A Carbon Tax Is 'Single Most Powerful' Way to Combat Climate Change, IMF Says.” CNBC , CNBC, 10 Oct. 2019 6. Buis, Alan. “A Degree of Concern: Why Global Temperatures Matter – Climate Change: Vital Signs of the Planet.” NASA , NASA, 12 Oct. 2020 7. Plumer, Brad, and Nadja Popovich. “These Countries Have Prices on Carbon. Are They Working?” The New York Times , The New York Times, 2 Apr. 2019 8. Plumer, Brad, and Nadja Popovich. “These Countries Have Prices on Carbon. Are They Working?” The New York Times , The New York Times, 2 Apr. 2019 9. “Japan Unemployment Rate 1991-2021.” MacroTrends