A Common Morality: Toward a Framework for Designing Fiscal Instruments to Respond to Global Climate Change

Abstract:     
Global climate change, largely the result of carbon emissions brought about by a global economy addicted to fossil fuel and committed to economic expansion, threatens the very viability of the economy that causes it. The relatively cheap price of fossil fuels does not account for the costs to society as a whole, thus evidencing a Tragedy of the Commons, where an individual’s exploitation of a finite resource is borne by the society in common. Fiscal instruments can and should be designed to send a price signal to the market to account for that cost, but must be designed within a moral framework. Wealth, created by unfettered economic expansion and fueled by over-consumption, has not brought happiness. This article will argue that global climate change should be addressed by a reexamination of our common morality. The market driven by self-interest must be assisted by fiscal policies that reflect a sense of community. Tax incentives, subsidies, and environmental taxes must be designed to unravel negative business consolidations and concentrations of power while promoting local communities and economies.

Number of Pages in PDF File: 18

Keywords: global climate change, warming, taxation, fiscal instruments, environment, environmental, tax, taxes, incentives, subsidies

JEL Classification: A13, K32, K34, Q28, H23, H20, H29

Accepted Paper Series