LASER TALK: You had me at ‘Pigovian’

On April 2, 2013, Lord Nicolas Stern, the World Bank and International Monetary Fund all agreed: climate change is one of the greatest economic risks of the 21st Century (1).  Carbon fee and dividend is quickly becoming an idea whose time has come. More and more policy experts, including those in conservative circles, see it as an effective vehicle for correcting the distortion in the marketplace that makes fossil fuels our dominant energy source.

Many economists say the free market is a just arbiter in deciding which goods and services are beneficial to society. The system breaks down, however, when the price of something does not reflect its true cost to society. Such is the case with fossil fuels, as their use carries tremendous costs in terms of health, security, environmental damage and destructive weather made worse by global warming.

Correcting this distortion in the marketplace, a process which economists refer to as Pigovian taxation, would allow clean energy and efficiency to flourish and reduce our use of carbon-based fuels.

David Frum, a Canadian and former speech writer for president George W. Bush; “More jobs and growth; reduced deficits without raising income taxes; lower taxes for middle-class families … one policy instrument can do it all. What’s not to love about a carbon tax?” (2)

Diana Carney from Canada 2020 is part of a growing group of progressive Canadians who are making the compelling case for a pricing carbon. In November 2013, Canada 2020 hosted their second climate change conference, called The Politics of Climate Change and Climate of Politics, in Ottawa. (3)

The good news is that we can correct the market failure of fossil fuels without damaging our economy.

How? Give the revenue from a carbon fee and dividend system back to the Canadian people.




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