An idea that's flawed but worth considering from adjunct professor of earth and environmental sciences at Columbia University's Earth Institute, James Hansen.
In this piece, Hansen suggests imposing a carbon tax with a 100% dividend for the public. "The entire tax must be returned to the public, an equal amount to each adult, a half-share for children. This dividend can be deposited monthly in an individual's bank account. A carbon tax with a 100% dividend is non-regressive. On the contrary, you can bet that low and middle income people will find ways to limit their carbon tax and come out ahead. Profligate energy users will have to pay for their excesses. Demand for low-carbon high-efficiency products will spur innovation, making our products more competitive on international markets. Carbon emissions will plummet as energy efficiency and renewable energies grow rapidly."
Not a bad idea but how do you ensure people will spend the money on renewable energy goods and services? That's impossible without government subsidies for that sector, and incentives to steer the public in that direction. More to the point, how do you ensure that people won't go and spend the money on energy wasting cars and other products? Hansen argues they are unlikely to do so because the carbon tax will drive up the price of these goods, but the reality is that some people will still buy them because they can afford to.
Still, it's ideas like these that make you realize that fighting climate change can't be done with just a tax, or cap and trade scheme. You need a raft of initiatives at work here.
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