The Economists’ Statement on Carbon Dividends is a joint statement signed by over 3,500 U.S. economists promoting a carbon dividends framework for U.S. climate policy. The statement was organized by the

Climate Leadership Council The Climate Leadership Council is a bipartisan non-profit organization that advocates for market-based solutions to reduce global emissions. In 2022, it launched the Center for Climate & Trade which leverages "trade relationships and the market e ...

and originally published on January 16, 2019 in

The Wall Street Journal ''The Wall Street Journal'' (''WSJ''), also referred to simply as the ''Journal,'' is an American newspaper based in New York City. The newspaper provides extensive coverage of news, especially business and finance. It operates on a subscriptio ...

with 45 signatories, including

Nobel Prize The Nobel Prizes ( ; ; ) are awards administered by the Nobel Foundation and granted in accordance with the principle of "for the greatest benefit to humankind". The prizes were first awarded in 1901, marking the fifth anniversary of Alfred N ...

winning economists, former chairs of the

Federal Reserve The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a series of ...

, former chairs of the

Council of Economic Advisors The Council of Economic Advisers (CEA) is a United States agency within the Executive Office of the President established in 1946, which advises the president of the United States on economic policy. The CEA provides much of the empirical resea ...

, and former secretaries of the Treasury Department. Since its original publication, the statement has been signed by over 3,500 U.S. economists and has been recognized as the largest statement in the history of the economics profession.

Summary

The statement recognizes an immediate need for climate action and offers five policy recommendations: # A

carbon tax A carbon tax is a tax levied on the carbon emissions from producing goods and services. Carbon taxes are intended to make visible the hidden Social cost of carbon, social costs of carbon emissions. They are designed to reduce greenhouse gas emis ...

is the most cost-effective method of reducing

carbon emissions Greenhouse gas (GHG) emissions from human activities intensify the greenhouse effect. This contributes to climate change. Carbon dioxide (), from burning fossil fuels such as coal, petroleum, oil, and natural gas, is the main cause of climate chan ...

at the necessary scale and speed. # The carbon tax should be revenue neutral and designed to increase every year until emissions reductions goals are met. # A sufficiently robust carbon tax can replace carbon regulations that are less efficient. # A border carbon adjustment system will prevent

carbon leakage Carbon leakage is a concept to quantify an increase in greenhouse gas emissions in one country as a result of an emissions reduction by a second country with stricter climate change mitigation policies. Carbon leakage is one type of spill-over ef ...

and enhance the competitiveness of American firms that are more energy-efficient that their foreign competitors. # The carbon tax's revenue should be distributed to U.S. citizens in equal lump-sum payments.

Reception

The statement was praised for the spectrum of economic thought and political opinion represented by its signatories. Former

Harvard University Harvard University is a Private university, private Ivy League research university in Cambridge, Massachusetts, United States. Founded in 1636 and named for its first benefactor, the History of the Puritans in North America, Puritan clergyma ...

President and U.S. Treasury Secretary Larry Summers called the statement’s proposal “one of the few ideas of economic policy that commands broad, bipartisan support.” The Chicago Booth Review noted that it was “perhaps the closest that the economics profession has ever come to a consensus.” Former chair of the Federal Reserve and the CEA Janet Yellen praised the statement for its broader political implications, saying it “represents a major tipping point in U.S. climate policy.”

Original Signatories

The original forty-five signers of the statement were (sorted alphabetically): #

George Akerlof George Arthur Akerlof (born June 17, 1940) is an American economist and a university professor at the McCourt School of Public Policy at Georgetown University and Koshland Professor of Economics Emeritus at the University of California, Berkeley. ...

Robert Aumann Robert John Aumann (Yisrael Aumann, ; born June 8, 1930) is an Israeli-American mathematician, and a member of the United States National Academy of Sciences. He is a professor at the Center for the Study of Rationality in the Hebrew University ...

# Martin Baily #

Ben Bernanke Ben Shalom Bernanke ( ; born December 13, 1953) is an American economist who served as the 14th chairman of the Federal Reserve from 2006 to 2014. After leaving the Federal Reserve, he was appointed a distinguished fellow at the Brookings Insti ...

# Michael Boskin #

Angus Deaton Sir Angus Stewart Deaton (born 19 October 1945) is a British-American economist and academic. Deaton is currently a Senior Scholar and the Dwight D. Eisenhower Professor of Economics and International Affairs Emeritus at the Princeton School ...

# Peter Diamond #

Robert Engle Robert Fry Engle III (born November 10, 1942) is an American economist and statistician. He won the 2003 Nobel Memorial Prize in Economic Sciences, sharing the award with Clive Granger, "for methods of analyzing economic time series with time-va ...

Eugene Fama Eugene Francis "Gene" Fama (; born February 14, 1939) is an American economist, best known for his empirical work on portfolio theory, asset pricing, and the efficient-market hypothesis. He is currently Robert R. McCormick Distinguished Servic ...

Martin Feldstein Martin Stuart Feldstein ( ; November 25, 1939 – June 11, 2019) was an American economist. He was the George F. Baker Professor of Economics at Harvard University and the president emeritus of the National Bureau of Economic Research. He s ...

Jason Furman Jason Furman (born August 18, 1970) is an American economist and professor at Harvard University's John F. Kennedy School of Government and a nonresident senior fellow at the Peterson Institute for International Economics. On June 10, 2013, Fur ...

Austan Goolsbee Austan Dean Goolsbee (born August 18, 1969) is an American economist and writer. He is the president of the Federal Reserve Bank of Chicago. Goolsbee formerly served as the Robert P. Gwinn Professor of Economics at the University of Chicago's Boo ...

Alan Greenspan Alan Greenspan (born March 6, 1926) is an American economist who served as the 13th chairman of the Federal Reserve from 1987 to 2006. He worked as a private adviser and provided consulting for firms through his company, Greenspan Associates L ...

# Lars Hansen # Oliver Hart #

Bengt Holmström Bengt Robert Holmström (born 18 April 1949) is a Finnish economist who is currently Paul A. Samuelson Professor of Economics (Emeritus) at the Massachusetts Institute of Technology. Together with Oliver Hart, he received the Central Bank of Swe ...

# Glenn Hubbard #

Daniel Kahneman Daniel Kahneman (; ; March 5, 1934 – March 27, 2024) was an Israeli-American psychologist best known for his work on the psychology of judgment and decision-making as well as behavioral economics, for which he was awarded the 2002 Nobel Memor ...

# Alan Krueger # Finn Kydland #

Edward Lazear Edward Paul Lazear (, ; August 17, 1948November 23, 2020) was an American economist, the Morris Arnold and Nona Jean Cox Senior Fellow at the Hoover Institution at Stanford University and the Davies Family Professor of Economics at Stanford Gradu ...

# Robert Lucas # N. Gregory Mankiw #

Eric Maskin Eric Stark Maskin (born December 12, 1950) is an American economist and mathematician. He was jointly awarded the 2007 Nobel Memorial Prize in Economic Sciences with Leonid Hurwicz and Roger Myerson "for having laid the foundations of mechanism d ...

# Daniel McFadden # Robert Merton #

Roger Myerson Roger Bruce Myerson (born March 29, 1951) is an American economist and professor at the University of Chicago. He holds the title of the David L. Pearson Distinguished Service Professor of Global Conflict Studies at The Pearson Institute for the ...

Edmund Phelps Edmund Strother Phelps (born July 26, 1933) is an American economist and the recipient of the 2006 Nobel Memorial Prize in Economic Sciences. Early in his career, he became known for his research at Yale's Cowles Foundation in the first half o ...

Christina Romer Christina Duckworth Romer (née Duckworth; born December 25, 1958) is the Class of 1957 Garff B. Wilson Professor of Economics at the University of California, Berkeley and a former chair of the Council of Economic Advisers in the Presidency of Ba ...

# Harvey Rosen # Alvin Roth #

Thomas Sargent Thomas John Sargent (born July 19, 1943) is an American economist and the W.R. Berkley Professor of Economics and Business at New York University. He specializes in the fields of macroeconomics, monetary economics, and time series econometric ...

Myron Scholes Myron Samuel Scholes ( ; born July 1, 1941) is a Canadian– American financial economist. Scholes is the Frank E. Buck Professor of Finance, Emeritus, at the Stanford Graduate School of Business, Nobel Laureate in Economic Sciences, and co-ori ...

Amartya Sen Amartya Kumar Sen (; born 3 November 1933) is an Indian economist and philosopher. Sen has taught and worked in England and the United States since 1972. In 1998, Sen received the Nobel Memorial Prize in Economic Sciences for his contributions ...

# William Sharpe #

Robert Shiller Robert James Shiller (born March 29, 1946) is an American economist, academic, and author. As of 2022, he served as a Sterling Professor of Economics at Yale University and is a fellow at the Yale School of Management's International Center fo ...

George Shultz George Pratt Shultz ( ; December 13, 1920February 6, 2021) was an American economist, businessman, diplomat and statesman. He served in various positions under two different Republican presidents and is one of the only two persons to have held f ...

Christopher Sims Christopher Albert Sims (born October 21, 1942) is an American econometrician and macroeconomist. He is currently the John J.F. Sherrerd '52 University Professor of Economics at Princeton University. Together with Thomas Sargent, he won the N ...

Robert Solow Robert Merton Solow, GCIH (; August 23, 1924 – December 21, 2023) was an American economist who received the 1987 Nobel Memorial Prize in Economic Sciences, and whose work on the theory of economic growth culminated in the exogenous growth ...

Michael Spence Andrew Michael Spence (born November 7, 1943) is a Canadian-American economist and Nobel laureate. Spence is the William R. Berkley Professor in Economics and Business at the Stern School of Business at New York University, and the Philip H. Kn ...

Lawrence Summers Lawrence Henry Summers (born November 30, 1954) is an American economist who served as United States Secretary of the Treasury from 1999 to 2001 and as the director of the National Economic Council from 2009 to 2010. He also served as presiden ...

Richard Thaler Richard H. Thaler (; born September 12, 1945) is an American economist and the Charles R. Walgreen Distinguished Service Professor of Behavioral Science and Economics at the University of Chicago Booth School of Business. In 2015, Thaler was p ...

Laura Tyson Laura D'Andrea Tyson (born June 28, 1947) is an American economist and university administrator who is currently a Distinguished Professor of the Graduate School at the Haas School of Business of the University of California, Berkeley and a senio ...

Paul Volcker Paul Adolph Volcker Jr. (September 5, 1927 – December 8, 2019) was an American economist who served as the 12th chair of the Federal Reserve, chairman of the Federal Reserve from 1979 to 1987. During his tenure as chairman, Volcker was widely ...

Janet Yellen Janet Louise Yellen (born August 13, 1946) is an American economist who served as the 78th United States secretary of the treasury from 2021 to 2025. She also served as chair of the Federal Reserve from 2014 to 2018. She was the first woman to h ...

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References

External links

Economists' Statement on Carbon Dividends Organized by the Climate Leadership Council
Economics and climate change