Economists' Statement on Carbon Dividends

The Economists’ Statement on Carbon Dividends is a joint statement signed by over 3,500 U.S. economists promoting a carbon dividends framework for U.S. climate policy. The statement was organized by the Climate Leadership Council and originally published on January 16, 2019 in The Wall Street Journal with signatures from 45 Nobel Prize winning economists, former chairs of the Federal Reserve, former chairs of the CEA, and former secretaries of the Treasury Department.[1][2][3]

Since its original publication, the statement has been signed by over 3,500 U.S. economists and has been recognized as the largest statement in the history of the economics profession.[4][5][6]

Summary

The statement recognizes an immediate need for climate action and offers five policy recommendations:[1]

  1. A carbon tax is the most cost-effective method of reducing carbon emissions at the necessary scale and speed.
  2. The carbon tax should be revenue neutral and designed to increase every year until emissions reductions goals are met.
  3. A sufficiently robust carbon tax can replace carbon regulations that are less efficient.
  4. A border carbon adjustment system will prevent carbon leakage and enhance the competitiveness of American firms that are more energy-efficient that their foreign competitors.
  5. The carbon tax's revenue should be distributed to U.S. citizens in equal lump-sum payments.

Reception

The statement was praised for the spectrum of economic thought and political opinion represented by its signatories. Former Harvard University President and U.S. Treasury Secretary Larry Summers called the statement’s proposal “one of the few ideas of economic policy that commands broad, bipartisan support.”[3] The Chicago Booth Review noted that it was “perhaps the closest that the economics profession has ever come to a consensus.”[7] Former chair of the Federal Reserve and the CEA Janet Yellen praised the statement for its broader political implications, saying it “represents a major tipping point in U.S. climate policy.”[8]

Original Signatories

The original 45 signers of the statement were:[1]

  1. George Akerlof
  2. Robert Aumann
  3. Martin Baily
  4. Ben Bernanke
  5. Michael Boskin
  6. Angus Deaton
  7. Peter Diamond
  8. Robert Engle
  9. Eugene Fama
  10. Martin Feldstein
  11. Jason Furman
  12. Austan Goolsbee
  13. Alan Greenspan
  14. Lars Hansen
  15. Oliver Hart
  16. Bengt Holmström
  17. Glenn Hubbard
  18. Daniel Kahneman
  19. Alan Krueger
  20. Finn Kydland
  21. Edward Lazear
  22. Robert Lucas
  23. N. Gregory Mankiw
  24. Eric Maskin
  25. Daniel McFadden
  26. Robert Merton
  27. Roger Myerson
  28. Edmund Phelps
  29. Christina Romer
  30. Harvey Rosen
  31. Alvin Roth
  32. Thomas Sargent
  33. Myron Scholes
  34. Amartya Sen
  35. William Sharpe
  36. Robert Shiller
  37. George Shultz
  38. Christopher Sims
  39. Robert Solow
  40. Michael Spence
  41. Lawrence Summers
  42. Richard Thaler
  43. Laura Tyson
  44. Paul Volcker
  45. Janet Yellen

References
  1. "Economists' Statement on Carbon Dividends". The Wall Street Journal. January 16, 2019.
  2. Brooks, Tony (February 18, 2019). "Prominent UChicago Economists Sign Letter Supporting Carbon Tax". The Chicago Maroon.
  3. Dlouhy, Jennifer (January 16, 2019). "From Greenspan to Yellen, Economic Brain Trust Backs Carbon Tax". Bloomberg.
  4. "All Signatories". Economists' Statement on Carbon Dividends.
  5. Mufson, Steven (February 13, 2020). "The fastest way to cut carbon emissions is a 'fee' and a dividend, top leaders say". The Washington Post.
  6. Hook, Leslie (February 17, 2019). "Surge in US economists' support for carbon tax to tackle emissions". Financial Times.
  7. Maiello, Michael; Gural, Natasha (February 4, 2019). "The Tax that Could Save the World". Chicago Booth Review.
  8. Siegel, Josh (January 16, 2019). "Top economists of both parties endorse carbon tax and dividend to fight climate change". Washington Examiner.
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