To quote R.E.M., “It’s the end of the world as we know it.” This sentiment was the exact attitude many of us have had when reading the news over the past couple of months. 

There has been plenty to worry about — the upcoming United States presidential election, the potential Chinese invasion of Taiwan, and the threat of DJ Horne trying to shoot a 3-pointer. But one of the most concerning discoveries went largely unreported. 

The National Oceanic and Atmospheric Administration found in its global climate report that 2023 was the planet’s hottest year on record. This disturbing information failed to receive the proper attention as Congress continued its tradition of inaction when addressing this issue of climate change. Worse, the Biden administration took steps to undo what little progress occurred by approving further drilling in once-protected land in Alaska by greenlighting the Willow Project.

But what exactly should policymakers do to right the sinking ship caused by the climate crisis? The answer is obvious. Stick to what the government does best: taxation. 

By taxing corporate carbon emissions, the U.S. takes one massive leap toward addressing its role in the climate crisis. The benefits are twofold: first, the environmental welfare is astounding, and second, the U.S. kickstarts its economy by using the newfound revenue to incentivize renewable energy. 

An ideal carbon tax raises the price of carbon emissions to the social cost — the cost in addition to the market price that accounts for externalities from carbon emissions — making it more profitable for companies to switch to more sustainable technologies. To quantify, the Tax Foundation delineated in 2022 that if the U.S. implemented a carbon tax of around $50, it could cut emissions between 26 to 47%. 

An emissions reduction of that size helps reduce the death toll of carbon pollution monumentally, which has risen to unfathomable levels. Specifically, The Harvard School of Public Health notes that in 2018 alone, over 350,000 premature deaths stemmed from fossil fuel-related particulates in the air. The toll that our addiction to fossil fuels takes on this country annually is staggering in the damage it causes to Americans who did nothing wrong other than trying to breathe the air in the U.S.

For proof of the benefits, we look across the pond to the United Kingdom. The New York Times notes that the U.K. cut its carbon emissions by 23% after instituting a mere $25 per ton carbon tax.  By implementing similar taxation models as our European allies, we can also reap the economic benefits they have enjoyed over the years.

As an article from the American Economic Association finds, in 2020, countries that created a carbon tax saw their gross domestic product (GDP) continue to grow even after five years of the tax’s initial impact. The University of Chicago takes it one step further, quantifying that the societal benefits range from $335 billion to $1.8 trillion in reduced healthcare costs and positive externalities from lessened air pollution. 

Despite these enormous benefits of a carbon tax, there is high concern that a tax specifically levied on emissions becomes regressive as lower-income Americans spend more on gasoline, energy, and heating. Opponents frequently tout this concept as the real reason why a carbon tax can never be implemented in the U.S., which is where further investment in renewable energy comes into play. The problem with a carbon tax is the rise in the cost of energy, but further investment in renewable energy lowers the cost and fixes the regressive nature of carbon taxes. 

As a report from the Rocky Mountain Institute notes, the cost of solar and wind technologies ($/MWh) has already halved over the past four years and continued investment will only further spur this cost decline further, reducing the impact of the higher energy costs on lower-income Americans. That same report from the Rocky Mountain Institute estimates that even at current investment rates, prices for wind will fall by 25% and solar will fall an additional 50% eventually offsetting the temporarily higher energy prices. On a more macro scale, investing in renewable energy benefits the economy as a whole by increasing economic output. As an article published in the Journal of Ecological Economics notes, every dollar invested in clean energy generates roughly double the output of every dollar invested in fossil fuels. 

The monumental benefits of a carbon tax combined with investments in renewable energy are clear. The two benefit the economy, help protect our environment, and are actionable steps the U.S. needs to take to address our past climate mistakes. Ultimately, acts like this will help us all feel a little less like it’s the end of the world as we know it.