“Global climate change is a serious problem calling for immediate national action.” — Janet Yellen and other top economists
I received an urgent letter last month from Janet Yellen, the former Fed chair, asking me to join with other top economists, including 27 Nobel Prize winners, to sign a statement calling for a carbon tax to be imposed on American business and consumers to both counter a “well-known market failure” and to create a “low-carbon future.”
I was surprised to see the letter had been signed by several market-friendly economists such as Glenn Hubbard, Greg Mankiw and Alan Greenspan. Did those three also drink the purple Kool-Aid?
First of all, air pollution is not really an example of market failure. Instead, it is a sign of the government’s failure to enforce property rights.
Second, air pollution is not a serious problem any longer in the United States and other industrial nations thanks to catalytic converters and other anti-pollution devices.
If you look at various charts of pollution in the United States, it has undergone a sharp decline over the past 50 years, as reflected by this chart that I show all my students. Before I show the chart to the class, I ask them, “How many of you think that air pollution has gotten worse in Southern California?” Usually, about a third of the hands go up. Then I show them this chart:
https://www.esrl.noaa.gov/csd/news/2012/119_0809.html
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