How the Fed Is Helping Make the Case for a Carbon Tax
The end of the era of low interest rates makes it all the more necessary to put a price on carbon.
Just tax it.
Photographer: Saul Loeb/AFP
The longer interest rates stay higher, the stronger the case grows for … a carbon tax.
Hear me out. The one great legislative push for carbon pricing, in 2010, came at a time of sky-high unemployment and low interest rates. It fell apart, but US emissions decreased anyway as newly plentiful natural gas started to crowd out more emissions-intensive coal. Over the next decade, the world’s entrepreneurs and engineers — assisted by modest government programs in the US and elsewhere — made considerable progress on bringing down the cost of manufacturing photovoltaic panels and batteries, helping to accelerate global investment in clean energy.