The United States is facing a new era of industrial policy. Climate change is wreaking havoc on our infrastructure, and equity is increasingly becoming a pressing issue. We must find ways to build a better country that doesn’t concentrate on harm but spreads benefits amongst the people. This is the challenge of our times.
How do we build a national social license and a sense of purpose? How do we guide the deployment of that infrastructure at scale to benefit everyone? Climate change is the perfect example of why we need to rethink our approach to industrial policy. We can no longer afford to ignore the problem or continue with business as usual. It’s time for bold action to mitigate the effects of climate change and build a better future for all. How do we accomplish this? It won’t be easy, but it’s crucial that we start now. We need to invest in physical infrastructure that can withstand the effects of climate change. We’ve already seen this begin in the passage of the Infrastructure Investment and Jobs Act, Creating Helpful Incentives to Produce Semiconductors for America (CHIPS), and the Inflation Reduction Act.
These acts look to find ways to spread the benefits of this investment widely instead of concentrating them in a few hands. We must do all this in a way that doesn’t recreate past harm. This is the challenge of our times and meeting it will require bold action and creative thinking. But if we succeed, the rewards will be immense.
Across the world, corporations are tasked first with eliminating their carbon footprint, as it should be. I believe it is time to develop a consumer-level option for joining the fight. If we align consumers with the same goals as corporations, we will undoubtedly find that the co-opting of values produces greater rewards.
What can we design and implement for consumers to passively participate in the decarbonization of our existence?
The first example that comes to mind is a carbon tax.
This could be a voluntary tax, redistributing the revenue to climate change mitigation and adaptation efforts.
It would work like this:
- You would have the option to “opt-in” to the carbon tax when filing your taxes.
- The amount you pay would be based on your emissions from the previous year.
- This information would come from your utility bills, driving habits, and diet.
- The tax itself could be tiered, with those who emit more paying a more significant percentage of their income.
- The revenue generated from the carbon tax could then be used to fund climate change mitigation and adaptation efforts.
Another possibility is a “carbon offset” system.
- This would work similarly to the carbon tax, but you would give to climate change mitigation and adaptation efforts instead of paying a tax.
- The amount you donate would be based on your emissions from the previous year.
- As with the carbon tax, this information would come from your utility bills, driving habits, and diet.
- The critical difference is that, instead of the money going to the government, it would go directly to climate change mitigation and adaptation efforts.
A third example is a “cap-and-trade” system.
- In this system, the government would set a limit (or”cap”) on the amount of carbon emitted yearly.
- Companies would then be able to buy and sell “permits” to emit carbon, with the total number of permits being equal to the cap.
- This would create a carbon market, and the price of permits would rise and fall based on supply and demand.
- The revenue generated from the sale of permits could then be used to fund climate change mitigation and adaptation efforts.
Consumer-Grade Industrial Policy
These are just a few examples of how we could align consumers with corporations in the fight against climate change. By coming up with creative solutions like these, we can build a better future for all.
The industrial policy led to significant developments for the United States in the past, but, as we’ve seen, technological stagnation can occur when the industry itself appears to have accomplished its mission. By enabling the consumer to impact the results directly, we not only encourage technological expansion but also increase the impact and the likelihood of continued effects.
The 725-page Inflation Reduction Act use has a lot of (green) industrial policy provisions in it. Real market shaping stuff.— Todd N. Tucker (@toddntucker) August 1, 2022
Running thread🧵 ...https://t.co/KWFRUGV9ix
What do you think? What other solutions be implemented to encourage consumers to participate in climate change mitigation and adaptation efforts? Let us know in the comments below!