In his recent Times Record column “High Costs Slow Climate Change Efforts” (Nov. 19), Gordon Weil correctly identifies the difficulty in enacting effective policies to combat climate change. Mitigating emissions is costly because energy from fossil fuels is cheaper than the climate-friendly energy from nuclear and renewables. Today’s voters and politicians resist those costs because they heavily discount the future damages that result from the emissions. Voters and politicians in one country are unwilling to bear costs when the benefits of mitigation are reaped by other countries. These two sources of inaction – present vs future, home vs. away – make climate policy the most frustrating and intractable issue of our era.

Think about it: the costs of mitigation are perhaps 1-2 percent of annual world GDP, but the failure to act will cause damages of at least 10 percent of global GDP by the end of the century, and introduce tipping points at which the damage is much worse (IMF, World Economic Outlook, 2020). Despite the obvious need, we seem paralyzed to act.

What can be done? Here are three big ideas that can move us forward.

First, the policies we undertake should make the sacrifice today as small as possible, and distribute that sacrifice equitably. This common sense is why economists and other experts almost universally recommend the comprehensive policy of a tax on the emissions generated by fossil fuels combined with a recycling of the revenue to shield most households from higher energy prices.

The carbon tax, combined with support of basic research on energy and a few regulations for sectors outside of the reach of a tax, minimizes our sacrifice: the higher prices of carbon-intensive goods induce each of us to find the reduction in our carbon footprint that matches our individual needs and opportunities. If the tax revenues are distributed on an equal, per capita basis, at least 60 percent of US households get more money back than the hike in their energy bills. Other policies – like renewable subsidies or requiring utilities to use minimum percentages of renewables in their power generation – inevitably cost more, favor the wealthy who can take advantage of the subsidies, and cater to special interests.

Second, although truly global participation is unreachable because of the tendency of countries to “free ride” on the sacrifices of others, smaller groups of key countries can act decisively, because they know that each is better off with mutual action than with mutual inaction. The challenge is to find ways of making these groups of countries, called “climate clubs,” as large as possible.


In particular, they must find ways of inducing countries to join the club by penalizing countries who do not engage in strong climate actions. To start, the US, Europe, and China must agree on strong, mutually advantageous climate policies and find ways to penalize one another, and other countries, if strong policies are not implemented. Such penalties might be taxes on international trade. Countries must move beyond voluntary commitments to sticks and carrots. Such enforcement is the only way to solve the home vs. away dilemma.

Third, the present vs. future dilemma might be solvable. Climate damage is no longer a distant possibility: we see it all around us and realize that our kids and grandkids are already in the cross-hairs. In addition, some economists recommend that our current sacrifice in the form of expensive energy might be counter-balanced by supplements to other forms of consumption. We could, for example, run budget deficits in exchange for climate policies, harming the future by less capital accumulation but helping the future with a better climate. At the same time, we reward people in the present with forms of consumption other than energy, through tax breaks or enhanced government programs. Such a win-win strategy may be needed to spur voters and politicians to act on climate.

We are in a hard place but mustn’t despair: a carbon tax plus dividend, international agreements with teeth, and win-win transfers between generations can help us escape from this pickle.

Michael Jones lives in Brunswick.

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