The climate policy choice in the U.S. Presidential election could not be clearer. One trusts science, the other dismisses and undermines it. One has a plan, the other does not. In fact, Democratic candidate Joe Biden’s plan is the most ambitious climate plan ever proposed by a major U.S. presidential candidate. The headline goal of 100% carbon-free electricity by 2035, for example, is more ambitious even than Bernie Sanders’s from 2016. The $2 trillion investment over four years on clean energy, weatherizing homes, and mass transit approaches pandemic proportions.
Equally important are the many other plans for everything from environmental justice to foreign policy and government reform, including potentially a new White House office to coordinate climate activities across the government.
That important big climate push, aided by considerable momentum around climate as a top issue of concern for voters, also creates a particular bind for those long focused on climate issues, often in isolation: many economists, in short, don’t quite know what to do with such a transformational policy push.
Economists, as a species, are trained to think at the margins, analyzing oft-narrow – “marginal” – carbon pricing proposals aimed at charging emitters for each ton of CO₂ released. The ten(!) carbon pricing bills introduced this Congress are a good example. They are well-defined, narrow proposals to price CO₂ at levels between $15 and $50 per ton, some rising rapidly over time.
In fact, any such proposal follows a dearly held school of thought among economists: each policy ought to be narrowly targeted to address a distinct policy goal. The climate problem often gets split into two distinct problems: one is the external costs of carbon pollution, the other is how to jumpstart clean-energy innovation. The first, the argument goes, calls for a price on carbon, the second for subsidizing research, development, and deployment of clean technologies. Both are important. The pandemic necessitates adding a third: job creation, putting justice issues front and center.
The split has also led to complex politics. Political scientist Matto Mildenberger, in an important recent book titled Carbon Captured, details how business lobbies and labor unions have teamed up to successfully scuttle ambitious climate policies. “Narrow” policies aimed at pricing carbon have, in the past, found particularly vicious opposition from both.