THURSDAY, JANUARY 17, 2019

Original Co-Signatories Include (full list on reverse):

4 Former Chairs of the Federal Reserve (All) 27 Nobel Laureate Economists 15 Former Chairs of the Council of Economic Advisers 2 Former Secretaries of the U.S. Department of Treasury

Economists’ Statement on Carbon Dividends

Global climate change is a serious problem for various carbon regulations that are less calling for immediate national action. Guided efficient. Substituting a price signal for by sound economic principles, we are united in cumbersome regulations will promote the following policy recommendations. economic growth and provide the regulatory certainty companies need for long- term A carbon tax offers the most investment in clean-energy alternatives. I. cost-effective lever to reduce carbon emissions at the scale and speed that is To prevent carbon leakage and to necessary. By correcting a well-known market IV. protect U.S. competitiveness, a border failure, a carbon tax will send a powerful price carbon adjustment system should be signal that harnesses the invisible hand of the established. This system would enhance the marketplace to steer economic actors towards a competitiveness of American firms that are low-carbon future. more energy-efficient than their global competitors. It would also create an incentive A carbon tax should increase every year for other nations to adopt similar carbon II. until emissions reductions goals are met pricing. and be revenue neutral to avoid debates over the size of government. A consistently rising To maximize the fairness and political carbon price will encourage technological V. viability of a rising carbon tax, all the innovation and large-scale infrastructure revenue should be returned directly to U.S. development. It will also accelerate the citizens through equal lump-sum rebates. The diffusion of carbon-efficient goods and services. majority of American families, including the most vulnerable, will benefit financially by A sufficiently robust and gradually receiving more in “carbon dividends” than III. rising carbon tax will replace the need they pay in increased energy prices. Original Co-Signatories

George Akerlof Bengt Holmström Alvin Roth Nobel Laureate Economist Nobel Laureate Economist Nobel Laureate Economist

Robert Aumann Glenn Hubbard Tomas Sargent Nobel Laureate Economist Former Chair of CEA Nobel Laureate Economist

Martin Baily Daniel Kahneman Myron Scholes Former Chair of CEA Nobel Laureate Economist Nobel Laureate Economist

Ben Bernanke Alan Krueger Amartya Sen Former Chair of Federal Reserve Former Chair of CEA Nobel Laureate Economist Former Chair of CEA

Michael Boskin Finn Kydland William Sharpe Former Chair of CEA Nobel Laureate Economist Nobel Laureate Economist

Angus Deaton Edward Lazear Robert Shiller Nobel Laureate Economist Former Chair of CEA Nobel Laureate Economist

Peter Diamond Robert Lucas George Shultz Nobel Laureate Economist Nobel Laureate Economist Former U.S. Treasury Secretary

Robert Engle N. Gregory Mankiw Christopher Sims Nobel Laureate Economist Former Chair of CEA Nobel Laureate Economist

Eugene Fama Eric Maskin Robert Solow Nobel Laureate Economist Nobel Laureate Economist Nobel Laureate Economist

Martin Feldstein Daniel McFadden Michael Spence Former Chair of CEA Nobel Laureate Economist Nobel Laureate Economist

Jason Furman Robert Merton Lawrence Summers Former Chair of CEA Nobel Laureate Economist Former U.S. Treasury Secretary

Alan Greenspan Roger Myerson Richard Taler Former Chair of Federal Reserve Nobel Laureate Economist Nobel Laureate Economist Former Chair of CEA

Austan Goolsbee Edmund Phelps Laura Tyson Former Chair of CEA Nobel Laureate Economist Former Chair of CEA

Lars Peter Hansen Christina Romer Paul Volcker Nobel Laureate Economist Former Chair of CEA Former Chair of Federal Reserve

Oliver Hart Harvey Rosen Janet Yellen Nobel Laureate Economist Former Chair of CEA Former Chair of Federal Reserve Former Chair of CEA