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Economists 'Statement on <br />Carbon Dividends WSJ 1.17_19 <br />Bipartisan agreement on how to combat climate change. <br />235 Comments <br />Jan. 16, 2019 6:55 p.m. ET <br />Global climate change is a serious problem calling for immediate national action. Guided by <br />sound economic principles, we are united in the following policy recommendations. <br />I. A carbon tax offers the most cost-effective lever to reduce carbon emissions at the scale <br />and speed that is necessary. By correcting a well-known market failure, a carbon tax will <br />send a powerful price signal that harnesses the invisible hand of the marketplace to steer <br />economic actors towards a low -carbon future. <br />I1. A carbon tax should increase every year until emissions reductions goals are met and be <br />revenue neutral to avoid debates over the size of government. A consistently rising carbon <br />price will encourage technological innovation and large-scale infrastructure development. It <br />will also accelerate the diffusion of carbon -efficient goods and services. <br />I11. A sufficiently robust and gradually rising carbon tax will replace the need for various <br />carbon regulations that are less efficient. Substituting a price signal for cumbersome <br />regulations will promote economic growth and provide the regulatory certainty companies <br />need for long- term investment in clean -energy alternatives. <br />1V. To prevent carbon leakage and to protect U.S. competitiveness, a border carbon <br />adjustment system should be established. This system would enhance the competitiveness of <br />American firms that are more energy -efficient than their global competitors. It would also <br />create an incentive for other nations to adopt similar carbon pricing. <br />V. To maximize the fairness and political viability of a rising carbon tax, all the revenue <br />should be returned directly to U.S, citizens through equal lump -sum rebates. The majority of <br />American families, including the most vulnerable, will benefit financially by receiving more <br />in "carbon dividends" than they pay in increased energy prices. <br />George Akerlof Robert Aumann, Angus Denton, Peter Diamond, Robert Engle, Eugene <br />Fama, Lars Peter Hansen, Oliver Hart, Bengt Holmstrom, Daniel Kahneman, Finn <br />