eichengreen154_Mark HarringtonNewsday RM via Getty Images_offshorewindfarm Mark Harrington/Newsday RM via Getty Images

The Logic of Effective Climate Action

The starting point for addressing climate change, economists agree, is a tax on carbon. But while the resulting reduction in emissions would benefit virtually everyone on the planet, those who bear a disproportionate share of the costs will mobilize in opposition – that is, unless they are given a reason not to.

BERKELEY – In his classic book, The Logic of Collective Action, the late great Mancur Olson explained that the hardest policies to implement are those with diffuse benefits and concentrated costs. Olson’s argument was straightforward: individuals bearing the costs will vigorously oppose the policy, while the beneficiaries will free ride, preferring that someone else take up the cudgels.

Olson’s insight applies to the single most pressing policy challenge facing humanity today, namely climate change. The starting point for addressing it, economists agree, is a tax on carbon. The resulting reduction in emissions would deliver benefits to virtually everyone on the planet. But specific segments of society – Olson’s concentrated interests – will bear a disproportionate share of the costs and mobilize in opposition.

A case in point are the French gilets jaunes (“yellow vests”). Like any mass movement, the gilets jaunes had multiple grievances. But their most animating complaint was a fuel-tax increase imposed in the name of combating climate change. Rural residents rely more on their cars, trucks, and tractors than do urban dwellers, who can ride a bicycle or take the subway to work. The tax increase hit them where it hurt, in the pocketbook.

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