The Free Market Solution to Climate Change. 

What are we paying for a barrel of oil this morning? $50 you say? Wrong. Because markets are not factoring in that barrel’s true cost to our economy. Rising seas that threaten our cities[1] and naval bases[2]. More severe weather[3] and forest fires[4]. Higher food prices from heat waves and droughts.[5] The market accounts for none of these costs. And that needs to change quickly.

As we have pointed out in this series, the atmosphere is fast running out of room for much more CO2. We are heading for temperature increases that threaten our economy and security. Putting a fair price on fossil fuels is the most efficient way to convert to a clean energy economy and avoid the worst effects of climate change.

The CEOs of oil giants Exxon, BP, Royal Dutch Shell, Statoil, Total, Eni and BG Group have all called for carbon pricing.[6] So have the leaders of France, Germany, Mexico, Canada and the IMF. World Bank President Jim Yong Kim says a price on carbon pollution is “by far the most powerful and efficient way to reduce emissions.”[7] In today’s complex economy, carbon pricing is a better option than new layers of government regulation. Don’t you agree?

A revenue-neutral fee on carbon is a market-driven policy that conservatives and liberals can both embrace because it promotes growth, creates jobs and makes US companies more competitive. Portions of the substantial revenue raised could be used to reduce the corporate income tax, compensate families for energy costs, fund infrastructure and clean energy research, or a combination of these things.

Wall Street Journal columnist Holman W. Jenkins calls a revenue-neutral carbon tax “our first-best policy, rewarding innovations by which humans would satisfy their energy needs while releasing less carbon into the atmosphere.”[8]

We can grow our economy, improve our competitiveness and address the risks of climate change simultaneously. But we must put aside ideology and act. Stay tuned and learn more at pricecarbon.org.