A recent poll from the Washington Post confirms two important trends in public opinion on climate policy. An increasing number of Americans want the government tackle climate change, but few are willing to pay for it. Policymakers are looking for ways to address this dilemma, and the National Climate Bank can get them out of their bind.
Two thirds of adults say that climate change is a crisis or a major problem. Nearly half of all respondents say the U.S. needs to drastically reduce use of fossil fuels in the next few years. However, only a quarter of Americans are willing to pay a tax of $10 per month on their utility bill to address climate change. And, 74% oppose raising the national gas tax.
The same poll also suggested an idea for funding climate policy that received greater support: the idea of raising taxes on wealthy households. This type of tax would be a progressive tax, as opposed to taxes on energy bills which are regressive in their relationship to household income. 68% of respondents supported this idea as a way to fund action on climate change.
Public finance is the key to addressing these voters’ concerns. This approach delivers action based on ultimately collected through progressive taxes. The National Climate Bank, as proposed by Senators Markey and Van Hollen in the National Climate Bank Act, would be capitalized with $35 billion in public funds, and would finance clean energy projects across the country. These projects would provide clean energy at prices competitive or cheaper than local grid power. By pairing public capital with private investment, and recycling capital as loans are repaid, the Climate Bank can multiply its investment impact in order to achieve the most rapid greenhouse gas reductions.
The full climate impact of these investments across the economy could be considerable. The Climate Bank is empowered to invest in a wide variety of projects and sectors. The power sector tends to get the lion’s share of the attention in climate policy, but the Climate Bank would also be able to invest in transportation, agriculture, industry, and more. Each of these investments would be cost-competitive with alternatives, lowering consumer costs while reducing emissions.
With the public reluctant to feel the pain in the form of regressive taxes, but still calling on government to address climate change, a Climate Bank fills a critical need.
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