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COVID against
Yur big concern is that, Yur big concern is that, despite good intentions, despite good intentions, governments and business governments and business will be severely constrained will be severely constrained in their spending once the in their spending once the immediate crisis is over, due immediate crisis is over, due to the extraordinary financial to the extraordinary financial burden of the lockdown. burden of the lockdown.
emitters (and even different emissions more expensive than it needs to be. from the same emitter) vastly A COVID-19-related general increase differently. This makes carbon in carbon pricing could be used to regulation inefficient and therefore rectify some of these differences. more expensive than it needs to be. To successfully implement this policy A COVID-19-related general increase in the future will need a cross-party in carbon pricing could be used to consensus. This is feasible in the UK rectify some of these differences. as the Conservatives have recently To successfully implement this policy committed to the net zero carbon in the future will need a cross-party target by 2050 and Labour has been consensus. This is feasible in the UK championing climate change action as the Conservatives have recently over recent decades. committed to the net zero carbon Is paying down the government’s target by 2050 and Labour has been COVID-19 debt the best use for the championing climate change action carbon tax revenue? We think so, as over recent decades. this could be part of a new “Marshall Is paying down the government’s COVID-19 debt the best use for the carbon tax revenue? We think so, as this could be part of a new “Marshall Plan for Growth” after the pandemic, one that is tilted towards the green transition. By providing an additional form of tax revenue, this opens fiscal Plan for Growth” after the pandemic, one that is tilted towards the green transition. By providing an additional form of tax revenue, this opens fiscal space for governments to rise to the challenge of rebuilding our shattered economy. ◆ space for governments to rise to the challenge of rebuilding our shattered economy. ◆ This post represents the views of the authors and not those of the COVID-19 blog, nor LSE.
This post represents the views of the authors and not those of the COVID-19 blog, nor LSE.
Success will in part depend Success will in part depend on how fairly the carbon tax on how fairly the carbon tax is implemented as well as is implemented as well as how it is communicated. For how it is communicated. For fairness, we must address the fairness, we must address the distributional impact of carbon distributional impact of carbon pricing to avoid the poor being pricing to avoid the poor being hit harder than the rich. hit harder than the rich.
John Van Reenen is Ronald Coase School John Van Reenen is Ronald Coase School Professor at the London School of Economics Professor at the London School of Economics and the Gordon Billard Professor at the and the Gordon Billard Professor at the Massachusetts Institute for Technology (jointly Massachusetts Institute for Technology (jointly in the MIT Economics Department and Sloan in the MIT Economics Department and Sloan Management School). He has published over Management School). He has published over a hundred papers on many areas in economics a hundred papers on many areas in economics with a particular focus on firm performance with a particular focus on firm performance and the causes and consequences of innovation. and the causes and consequences of innovation.
He was the 2009 winner of the Yrjö Jahnsson He was the 2009 winner of the Yrjö Jahnsson Award (the European equivalent of the Clark Medal); the Arrow Prize (2011); the European Investment Bank Prize (2014), and the HBR-McKinsey Award (2018). He is a fellow of the British Academy, the Econometric Society, the NBER, CEPR and the Society of Labor Economists. In 2017, he was awarded an OBE for “services to public policy and economics” by the Queen. Award (the European equivalent of the Clark Medal); the Arrow Prize (2011); the European Investment Bank Prize (2014), and the HBR-McKinsey Award (2018). He is a fellow of the British Academy, the Econometric Society, the NBER, CEPR and the Society of Labor Economists. In 2017, he was awarded an OBE for “services to public policy and economics” by the Queen.
Ralf Martin is an Associate Professor of Economics at Imperial College Business School and the Director of the Growth Research Programme at the Centre for Economic Performance of the London School of Economics. His research - which has appeared in leading economic journals - focuses on the relationship between firm performance, economic growth and our impact on the natural environment. In 2015 he was the joint winner of the Erik Kempe Award for the best paper in Environmental and Resource Economics. Ralf Martin is an Associate Professor of Economics at Imperial College Business School and the Director of the Growth Research Programme at the Centre for Economic Performance of the London School of Economics. His research - which has appeared in leading economic journals - focuses on the relationship between firm performance, economic growth and our impact on the natural environment. In 2015 he was the joint winner of the Erik Kempe Award for the best paper in Environmental and Resource Economics.
