Hank Paulson in NYT: Bailout the climate with a carbon tax? ‘The Coming Climate Crash…Let’s not ignore the climate bubble’
Henry M. Paulson Jr. is the chairman of the Paulson Institute at the University of Chicago and secretary of the Treasury from July 2006 to January 2009.
We’re staring down a climate bubble
We’ve seen and felt the costs of underestimating the financial bubble. Let’s not ignore the climate bubble.
Some members of my political party worry that pricing carbon is a “big government” intervention. In fact, it will reduce the role of government, which, on our present course, increasingly will be called on to help communities and regions affected by climate-related disasters like floods, drought-related crop failures and extreme weather like tornadoes, hurricanes and other violent storms. We’ll all be paying those costs. Not once, but many times over.
Advocates ‘placing a tax on carbon dioxide emissions.’
There is virtually no debate among them that the planet is warming and that the burning of fossil fuels is largely responsible.The West Antarctic ice sheet has begun to melt, a process that scientists estimate may take centuries but that could eventually raise sea levels by as much as 14 feet. Now that this process has begun, there is nothing we can do to undo the underlying dynamics, which scientists say are “baked in.” And 10 years from now, will other thresholds be crossed that scientists are only now contemplating?
Looking back at the dark days of the financial crisis in 2008, it is easy to see the similarities between the financial crisis and the climate challenge we now face.
We are building up excesses (debt in 2008, greenhouse gas emissions that are trapping heat now). Our government policies are flawed (incentivizing us to borrow too much to finance homes then, and encouraging the overuse of carbon-based fuels now). Our experts (financial experts then, climate scientists now) try to understand what they see and to model possible futures. And the outsize risks have the potential to be tremendously damaging (to a globalized economy then, and the global climate now).I was secretary of the Treasury when the credit bubble burst, so I think it’s fair to say that I know a little bit about risk, assessing outcomes and problem-solving.