ASP Consensus Member George P. Shultz was featured in the Wall Street Journal, along with co-author James Baker, in an article that speaks on “The Conservative Answer to Climate Change”. His article discusses how sound economic analysis supports the institution of a carbon tax, a tax that would allow private firms latitude in finding the most efficient means at cutting emissions.
As the most effective means in reducing emissions, Mr. Shultz argues that a gradually rising carbon tax is far more preferable to the current method of cumbersome regulations and simultaneously acts as a powerful market signal to businesses craving certainty in future planning.
Potentially, a “carbon dividend” payment from these tax proceeds collected would be distributed to the American public, with amounts that would grow as the gradual carbon tax rate increased. Further adjustments in the form of rebates to American companies that pay non-comparable carbon taxes to international bodies, as well as fees on imports from these international partners, will promote American leadership and competitiveness in global climate policy. At the same time, it will also penalize countries that may seek to skirt carbon-reduction in favor of unfair trade advantages.
Finally, Mr. Shultz states that almost all current stringent EPA regulations could be eliminated once these prior conditions have been enacted. In providing relief to US industries through easing restrictions, it will energizes capital investment that has been lacking due to the unease of investors attempting to predict an unstable future of regulations.
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