The unprecedented, catastrophic Australian bush fires rage on. Who foots the bill? The taxpayers there will pay billions for this extreme consequence of climate change.
Economists teach that carbon pollution is a fossil fuel-sourced energy “negative externality.” An ‘externality’ occurs when a market transaction affects people who are not involved in that transaction. For example, when I buy power from Duke Energy, its fossil fuel generator emits carbon pollution — a price not included in my bill. I pay for the electricity which compensates the electricity retailer, distributor, transmission company and the fueled generator.
But people (and nature) who are adversely affected by carbon pollution receive no compensation, suffering a “negative externality.” Too much electricity is produced by burning fossil fuels because buyers of that electricity do not face the full costs.
If they did, they would buy less and incentivize free markets to search for cheaper, less-polluting sources of energy like wind and solar.
Save us taxpayers from shouldering the ultimate climate change costs like the current Australians.
Call your member of Congress to support a bipartisan solution: HR 763, the Energy Innovation and Carbon Dividend Act, which will prevent taxpayers from covering the future costs of natural catastrophes caused by carbon pollution.