ECONOMISTS’ STATEMENT ON CARBON DIVIDENDS

The Largest Public Statement of Economists in History

SIGNATORIES INCLUDE

3589 U.S. Economists 4 Former Chairs of the Federal Reserve (All) 27 Nobel Laureate Economists 15 Former Chairs of the Council of Economic Advisers

As appeared in

ECONOMISTS’ STATEMENT ON CARBON DIVIDENDS

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

As published in the Wall Street Journal on January 17, 2019

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



All Signatories

Institutional affiliation listed for identification purposes only