Expect to hear more about carbon dividends in the next few years. The latest IPCC report and the increased frequency and intensity of extreme weather events this year in particular, is perhaps finally focusing minds across party lines on ways to make carbon taxes politically acceptable.
Scientists and economists have long advocated carbon taxes as the most effective way to remove carbon from the world economy. While left of centre Europeans like me want increased funding for public services, history shows it’s an uphill task selling the tax increases needed to pay for them, even when voters say they want better schools, hospitals or more police on the street. Taxing carbon may be vital but people rarely vote for new taxes. With climate change the real cost is in the future, and it’s too easy for voters and politicians to think short term and let future generations pay, with the cost of inaction rising all the time.
In different forms, the carbon dividend has long been popular with environmentalists, and the dividend is now gaining traction with Republicans and Libertarians. This appeal across the ideological spectrum means a dividend may be the only way to get carbon taxes implemented – and perhaps more importantly, keep them in place through successive changes of government. Continue reading…
