As I have discussed in a recent post, two of America’s biggest problems, in my opinion, are slow economic growth and the increasingly serious threat of global warming. We don’t know yet the official GDP growth figure for 2018, but it will likely be 3% or more, the economy’s best performance since 2005.
Unfortunately, U.S. carbon emissions also rose in 2018 for the first time in several years (see first chart), even though they are still significantly down from their high point in 2005. In fact, the U.S. is still largely on track to meet its target from the 2015 Paris Accords (see second chart) as long as the 2018 increase is an aberration and carbon emissions resume their downward track in the coming years.
This presents a dilemma. We want economic growth to increase, in order to create more and better paying jobs, but we also need to keep carbon emissions on a significant downward track in order to lessen the effects of global warming. Last year GDP grew smartly but carbon emissions also went up. Can we do better?
There is new technology for carbon capture and storage but it is expensive to implement. An economic incentive is needed for industry to employ it widely.
There is a way to create such an incentive, putting a price on carbon, but unfortunately it does not have nearly enough political support at the present time. Specifically carbon emissions would be taxed, let’s say at $20 per ton, and the revenue returned to the people in some suitable manner. This would raise the cost of gasoline, for example, by 18 cents per gallon.
The only way to address global warming is to reduce the carbon in the atmosphere. An incentive such as a carbon tax is the most efficient way to do it. At the present time roughly 60% of Americans agree that global warming is caused by human activity. As the evidence for global warming becomes more and more obvious, eventually there surely will be enough political support to take effective action.