Climate change is the challenge of our time. Scientists believe that greenhouse gas emissions are a major cause of rising temperatures, severe weather, and drought. The Pentagon considers climate change’s impact to be a “threat multiplier.” The financial and health costs are large and on the rise. Leaders of major financial institutions and leading companies recognize it is time for action. Many are taking steps to reduce or eliminate carbon in their operations. We can either rise to the challenge by acting now or accept that inaction will only lead to further decline of our quality of life, our prosperity, our national security, and our children’s future.
Economists agree that the most effective, efficient way to address this challenge is to put a price on carbon. To promote U.S. competitiveness, half the proceeds of the carbon fee could go toward reducing the corporate tax rate. The balance could be returned to low- and middle- income consumers. This legislative package would make U.S. companies more competitive, create jobs, end the impasse on tax reform, and stimulate economic growth. Just as businessmen and investors build risk-pricing into their decision-making, we must price the risk of climate change.