Former Fed Leaders, Economists Rally Around Carbon Tax

The Wall Street Journal
January 16, 2019
By Tim Puko

WASHINGTON—An all-star roster of former Federal Reserve leaders and White House economic advisers are signing on to a new statement in support of a carbon tax on businesses that sends the revenue to U.S. citizens.

Former Fed chair Alan Greenspan and former Council of Economic Advisers chief Austan Goolsbee are among dozens of economists now backing a set of principles pushed by a group called the Climate Leadership Council. They join other peers including former Fed chairs Ben Bernanke and Janet Yellen who have already backed the group.

In all, 45 economists signed the new statement, which is being published on the opinion page of Thursday’s Wall Street Journal.

The plan advocates replacing many environmental regulations with a simplified tax on businesses that release carbon into the atmosphere, an incentive for them to use cleaner energy. While economists have long supported carbon taxes as a climate-change solution, the new statement shows broad support for a political sweetener: sharing the proceeds with American consumers.

The proposal would tax businesses such as oil and coal companies responsible for the carbon dioxide that burns off into the atmosphere. The council proposes an initial levy of $40 per ton of emissions, and the economists say it should increase every year until the country meets its goals of emissions reductions.