Second thoughts on the “Economists’ Statement on Carbon Dividends”

About that statement signed by 3,300+ economists advocating for an American carbon dividend program, “the largest public declaration in the history of economics”:

Putting a price on carbon is, as the number of signatories suggests, a fairly obvious and uncontroversial proposal that has been economic consensus for decades. In fact, a 1997 “Economists’ statement on climate change” had a comparable 2,500 signatories though it also espoused a cap-and-trade scheme on top of the carbon tax. The rebate part proposed here is a surprising inclusion, but hardly revolutionary. Getting this many signatories was always going to be fairly easy and justifiable.

However, it appears that what was originally a fairly uncontroversial opinion piece published in the Wall Street Journal on behalf of the American economics academy has been co-opted by the Climate Leadership Council. There appear to be two homepages for the proposal: econstatement.org where assenting economists were directed and the CLC homepage, which claims ownership of the editorial and to have organized the proposal. Who are the CLC? This is from their website:

The Climate Leadership Council is an international policy institute founded in collaboration with a who’s who of business, opinion and environmental leaders to promote a carbon dividends framework as the most cost-effective, equitable and politically-viable climate solution.

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The “who’s who of business” refers to these guys on the right. Hmm. Their prior work page is a pretty long list of editorials published in the most prominent American publications describing this same carbon dividend plan as a “Republican” or “conservative” plan against climate change. According to the FT, the CLC organized this “bipartisan effort that has united senior economists from both parties.”

I find that odd. Nowhere on econstatement.org, where potential signatories were directed, does it mention the CLC, which is self-described as partisan. And nothing about a carbon dividend plan is particularly partisan unless you misrepresent this economic consensus as evidence the academy espouses a carbon dividend plan as a substitute for a Green New Deal-type stimulus program:

But Ms Yellen told the Financial Times the Green New Deal was costly, whereas the carbon tax, which would plough proceeds back to the public in dividend payments, would be the “most efficient way” to reduce emissions… Ms Yellen said a carbon tax and dividend would be more “feasible” and “sensible” than the Green New Deal in its current form. “This is a plan that harnesses markets, it is much more efficient and less costly than methods proposed by the proponents of the Green New Deal,” she said.

…Marty Feldstein, a prominent Republican economist and former chief economic adviser to Ronald Reagan, said that economists agreed that carbon emissions were a serious problem. “Our current method of trying to control carbon emissions by complex regulations is a bad idea, we think it is better to use a price mechanism to do it,” said Mr Feldstein, also one of the signatories. 

…Ms Yellen is an adviser at the Climate Leadership Council, which organised the proposal. The group is backed by large companies including ExxonMobil, BP, Shell, General Motors and Unilever, as well as environmental groups such as the Nature Conservancy and World Wildlife Fund.

… Ted Halstead, founder of the Climate Leadership Council, said that returning the proceeds of a future carbon tax directly to households was important to help make the plan “small government” friendly and revenue neutral. “The most significant part of the statement, is that for the first time in history, there is consensus on what to do with the money,” he said. Next he hopes to get carbon tax legislation introduced by both Republicans and Democrats in the Senate, even though it may be unlikely to become law under the current administration. “I think it is fair to say that America has two choices, one is the route of the Green New Deal, one is the route recommended by the entire economic establishment, which is the carbon dividend plan,” he added.

I haven’t looked at all into the details of the AOC draft of a Green New Deal proposal, but my understanding is that it would also include a progressive carbon tax scheme not unlike the ones these 3,300+ signatories endorse. This carbon tax scheme is a “method proposed by proponents of the Green New Deal.” To misrepresent climate policy as a choice between the two seems like bad-faith argumentation if not intentional deception. As I understood it initially, Dr. Yellen and others organized the proposal independent of the CLC. Did all signatories know this wasn’t the case? I’m not sure. Did all signatories agree to this framing of their support as anti-Green New Deal? Clearly not, ‘cause here’s one:

 
 

Separately, I don’t know yet what to make of Dr. Bill Nordhaus—who just accepted the Nobel Prize for his work in climate change economics just two months ago and was an advocate of carbon taxation as early as the 1970s—not co-signing.