To Coin or to Cap? Who Will Profit off Climate Change?

by Vins
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James K. Boyce is a professor of economics at the University of Massachusetts-Amherst and director of the Program on Development, Peace-building, and the Environment at the Political Economy Research Institute (PERI). Boyce has proposed two types of policies that can use to reduce fossil fuel emissions, carbon tax and carbon caps. Large corporations would have to obtain permits to pay for the fuels they were burning. By raising the prices of fossil fuels needed, it would reduce its use in the industry all together, forcing facilities to switch to energy efficient resources, alternative energy sources and mass transit. Boyce believes that putting a cap on how much fuel industries can purchase would reduce its use and ultimately reduce fossil fuel emissions far better than simply taxing for permit use.

Boyce claims “the easiest way to put a price on carbon emissions to through an upstream pricing system where you apply the price to where the carbon enters the economy, not where it comes out the tailpipe”. The goal is to cut emissions by 80% by 2050. By increasing the cost of carbon per ton we would accumulate $5.5 trillion dollars over the next 35 years. Boyce expresses “The question is: Who owns the atmosphere and, therefore, who will get the money”? The possibilities are endless, government policies could use the revenue for public education, environmental improvements, and the list goes on. Boyce promotes “cap and dividend” where the money made from taxing carbon use would be recycled back to the people at a per capita basis. Cap and dividend would instill common ownership and equal responsibility to care for our planet.

Source: James K. Boyce, “Climate Policy as Wealth Creation”, Dollars & Sense, July/August 2014, http://dollarsandsense.org/archives/2014/0714boyce.html.

Student Researcher: Megan Schweitz (Sonoma State University)

Faculty Evaluator: Peter Phillips (Sonoma State University)