Professor Ralph Peeples co-writes about climate change in Triad Business Journal op/ed

Ralph Peeples has distinguished himself as teacher and scholar. Ralph is a four-time winner of an Excellence in teaching award at Wake. He is among a small group of scholars nationally that employ empirical methodologies to study and evaluate the legal system.

Posted: April 7th, 2017 | By: Ralph Peeples and Bill Blancato

Professor Ralph Peeples and Bill Blancato co-wrote the following op-ed, “Guest Opinion: A market-based solution to manage the risk of climate change,” which was published by the Triad Business Journal on April 6, 2017.

Most businesses buy insurance. But most businesses don’t expect the perils they are insuring against to actually occur. Yet they still buy insurance.

Most Americans believe that our climate is changing, but not all do. The evidence for climate change is strong, but not everyone is persuaded. Virtually everyone, however, would agree that there is some chance our climate is changing and that human activity is causing the change. The real disagreement is over the size of that chance — the magnitude of the possibility.

If there is general agreement that climate change is a possibility, then shouldn’t we respond to that possibility? Predicting the future is not an exact science, but businesses try to forecast the future for one simple reason: They must in order to survive. Sometimes forecasts are right, and sometimes they are wrong, but forecasting happens all the time.

We should take the same approach with climate change. Regardless of what percentage chance we assign to climate change, the effects of climate change will be dramatic, if not catastrophic. It makes sense to take steps now to avert the worst effects. It’s like buying insurance.

One simple step would be to adopt a carbon tax and dividend policy, in which carbon is taxed at its source, and the proceeds from that tax are distributed to all. This is nothing more radical than applying supply-demand principles. As the price of carbon rises, demand principles. As the price of carbon rises, demand principles as the price of carbon rises, demand will fall. As demand falls, we reduce fossil fuel use, greenhouse gas emissions decline and we reduce the risks associated with increased greenhouse gas concentrations in the atmosphere.

Two organizations have proposed a carbon tax and dividend policy: Citizens’ Climate Lobby, a nonpartisan grassroots organization, and the Climate Leadership Council, a conservative organization headed by former cabinet secretaries George Shultz, James Baker and Hank Paulson. While there are some differences between the two organizations’ proposals, they are more similar than different. They each propose collecting a fee from fossil fuel producers at the point of production, or the port for imported fuel, increasing that fee every year and rebating all the money collected to households. Each calls for a border adjustment on goods imported from countries that do not put a similar price on carbon.

This simple, transparent program will dramatically reduce greenhouse gas emissions and stimulate the economy. Regional Economic Models Inc., a nonpartisan consulting firm, evaluated Citizens’ Climate Lobby’s proposal and concluded that CO2 emissions would decline 33 percent in 10 years and 52 percent in 20 years, 2.1 million jobs would be created within 10 years and 2.8 million within 20, and GDP would increase $70 billion-$85 billion per year. REMI also predicted that households in the bottom 66 percent of the income distribution would come out ahead. A recent Treasury Department analysis cited by the Climate Leadership Council found that the bottom 70 percent would come out ahead.

According to the Climate Leadership Council, adoption of a market-based carbon tax and dividend would allow us to shrink the overall size of government and streamline the regulatory state because we could phase out an array of energy-related regulations which “would reduce government bureaucracy, promote economic growth and free up the financial and personnel resources now allocated to administer and comply with these programs.”

Even if you are skeptical about climate change, adopting a carbon tax and dividend makes economic sense. All of us — businesses and individuals — will be the better for it.

Ralph Peeples is a professor at Wake Forest University and a volunteer for Citizen’s Climate lobby. Bill Blancato is a Winston-Salem attorney and regional coordinator for CCL.

Even if you are skeptical about climate change, adopting a carbon tax and dividend makes economic sense. All of us — businesses and individuals — will be the better for it.

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