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So this degrowther argument is just wrong. But degrowthers have a second, far better counter to McAfee’s notion that we can have our cake and eat it too: Decoupling isn’t happening fast enough. If we wait for China and India and all the countries of Africa to industrialize in a resource-intensive way like today’s developed countries did, and then to dematerialize their growth like today’s developed countries are doing now, it will be far too late and the planet will suffer ecological catastrophe.

This argument isn’t as strong as it sounds — China and India and the rest will be able to take advantage of the efficiency-inducing technologies created by the developed countries, like solar power (indeed, ). And they will be able to embrace “dematerialized” goods and services like social networks and video games (sorry, Xi Jinping) very early in their growth path. So these countries’ resource use trajectories won’t look quite like the U.S.’ or Europe’s.

I was going to write a lengthy post explaining why “degrowth” — the idea that we need to halt economic growth in order to save the planet — is a very bad idea. But in the meantime, other people have written that post, or recorded that podcast, and done it well. These include , , and . So instead I’ll write a shorter post trying to catalog and boil down the arguments against degrowth.

But first, let’s go over the standard argument, so we can see why these new arguments are necessary.

The United States is not trembling on the precipice of a communist revolution.

Uncle Sam commands the most powerful military in human history, and its rank-and-file exhibit few socialistic sympathies; U.S. precincts with military bases backed Donald Trump in both 2016 and 2020. America’s civilian security forces — which is to say its roughly 665,000 police officers — are even more hostile to the left than the troops. Our nation’s most heavily armed private citizens, meanwhile, would by and large prefer a Hobbesian war of all against all to a Marxist government. Should America’s constitutional order ever give way to an extralegal power struggle, an overwhelming force of arms will be arrayed against the radical left.

Could the world order survive without growing? It’s hard to imagine now, but humanity made do with little or no economic growth for thousands of years. In Byzantium and Egypt, income per capita at the end of the first millennium was lower than at the dawn of the Christian Era. Much of Europe experienced no growth at all in the 500 years that preceded the Industrial Revolution. In India, real incomes per person shrank continuously from the early 17th through the late 19th century. As world leaders gather in Paris to hash out an agreement to hold down and ultimately stop the emissions of heat-trapping greenhouse gases that threaten to make Earth increasingly inhospitable for humanity, there is a question that is unlikely to be openly discussed at the two-week conclave convened by the United Nations. But it is nonetheless hanging in the air: Could civilization, as we know it, survive such an experience again? The answer, simply, is no. Economic growth took off consistently around the world only some 200 years ago. Two things powered it: innovation and lots and lots of carbon-based energy, most of it derived from fossil fuels like coal and petroleum. Staring at climactic upheaval approaching down the decades, environmental advocates, scientists and even some political leaders have put the proposal on the table: World consumption must stop growing. “This is a subtle and largely unacknowledged part of some folks’ environmental/climate plan,” said Michael Greenstone, who directs the Energy Policy Institute at the University of Chicago. Sometimes it is not so subtle. The Stanford ecologist Paul Ehrlich has been arguing for decades that we must slow both population and consumption growth. When I talked to him on the phone a few months ago, he quoted the economist Kenneth Boulding: “Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist.” The proposal that growth must stop appears frequently along the leftward edge of the environmental movement, in publications like Dissent and the writing of the environmental advocate Bill McKibben. It also shows up in academic literature. For instance, Peter Victor of York University in Canada published a study titled “Growth, degrowth and climate change: A scenario analysis,” in which he compared Canadian carbon emissions under three economic paths to the year 2035. Limiting growth to zero, he found, had a modest impact on carbon spewed into the air. Only the “de-growth” situation — in which Canadians’ income per person shrank to its level in 1976 and the average working hours of employed Canadians declined by 75 percent — managed to slash emissions in a big way. And it is creeping into international diplomacy, showing up forcefully in India’s demand for “carbon space” from the rich world, which at its logical limit would demand that advanced nations deliver negative emissions — suck more carbon out of the atmosphere than they put in — so the world’s poor countries could burn their way to development as the rich countries have done for the last two centuries. Working for the Sustainable Development Commission, set up in 2001 to advise the Labour government in Britain, Tim Jackson of the University of Surrey produced a nifty calculation. Accept that citizens of developing nations are entitled to catch up with the living standards of Europeans by midcentury, and assume that Europe will grow, on average, by 2 percent a year between now and then. To stay within the 2 degree Centigrade (3.6 degrees Fahrenheit) average temperature increase that scientists generally consider the upper bound to avoid catastrophic climate change would require the world economy in 2050 to emit no more than six grams of carbon dioxide for every dollar of economic output. To put that in perspective, today the United States economy emits 60 times that much. The French economy, one of the most carbon-efficient because it is powered extensively by nuclear energy, emits 150 grams per dollar of output. Drawing what he saw as the inevitable conclusion, Professor Jackson published a book in 2009 called “Prosperity Without Growth” (Earthscan/Routledge). Whatever the ethical merits of the case, the proposition of no growth has absolutely no chance to succeed. For all the many hundreds of years humanity survived without growth, modern civilization could not. The trade-offs that are the daily stuff of market-based economies simply could not work in a zero-sum world. “It would be a nonstarter to have zero growth within a given country in terms of creating conflict between groups,” Professor Greenstone told me. “If one were to take this further and make it international, it feels like an even bigger stretch.” Let’s examine what our fossil-fueled growth has provided us. It has delivered gains in living standards in even the poorest regions of the world. But that’s only the beginning. Economic development was indispensable to end slavery. It was a critical precondition for the empowerment of women. Indeed, democracy would not have survived without it. As Martin Wolf, the Financial Times commentator has noted, the option for everybody to become better off — where one person’s gain needn’t require another’s loss — was critical for the development and spread of the consensual politics that underpin democratic rule. Zero growth gave us Genghis Khan and the Middle Ages, conquest and subjugation. It fostered an order in which the only mechanism to get ahead was to plunder one’s neighbor. Economic growth opened up a much better alternative: trade. The Oxford economist Max Roser has some revealing charts that show the deadliness of war across the ages. It was a real killer in the era of no growth. Up to half of all deaths among hunter-gatherers, horticulturalists and other ancient cultures were caused by conflict. The bloody 20th century — stage for two world wars, the Holocaust and other war-based genocides — still doesn’t even come close. Naomi Klein, a champion of the leftward fringe newly converted to the environmental cause, gleefully proposes climate change as an opportunity to put an end to capitalism. Were she right, I doubt it would bring about the workers’ utopia she appears to yearn for. In a world economy that does not grow, the powerless and vulnerable are the most likely to lose. Imagine “Blade Runner,” “Mad Max” and “The Hunger Games” brought to real life. The good news is that taking action against climate change need do no such thing. It will not be easy, but we can glimpse technological paths that will allow civilization to keep growing and afford the world economy a positive-sum future. More than how to stop growth, the main question brought out by climate change is how to fully develop and deploy sustainable energy technologies — in a nutshell, to help the world’s poor, and everybody else, onto a path to progress that doesn’t rely on burning buried carbon.

Kenneth Sandhage, professor at Purdue University, and his collaborators have recently made a breakthrough by redesigning and testing another ceramic–metal composite for the heat exchanger in the GEN3 CSP plant. Their material is a combination of zirconium carbide (ZrC) as the ceramic component and tungsten (W) metal. The ZrC/W cermet has an ultrahigh melting point, it is thermally conductive, thermally cyclable, very stiff and tough, and has a relatively high failure strength. The researchers can also mold it in complicated shapes via a patented process. “We start with a 50% porous tungsten-carbide plate, which we immerse in a Zr-bearing liquid. The liquid infiltrates the pores, and then it reacts to give ZrC and W. The new solid materials fill the pores of the plate, with very little change of its shape or size,” said Sandhage.

Renkun Chen, professor at the University of California, San Diego, is developing a diagnostic tool that can measure, with high precision, thermophysical properties, such as thermal conductivity and heat capacity, in several materials used in a GEN3 CSP plant. He believes that providing the other teams with the exact values of these properties can help them choose the right combination of salts, alloys, and coatings. “There is currently no commercial set up to measure with certainty these properties in situ at very high temperatures while the plant operates,” he said. The big challenge is to design their instrument in a way that it will be resilient to the thermal stress and damage that can occur in the proximity of a CSP solar tower.

MIT engineers have come up with a conceptual design for a system to store renewable energy, such as solar and wind power, and deliver that energy back into an electric grid on demand. The system may be designed to power a small city not just when the sun is up or the wind is high, but around the clock.

The new design stores heat generated by excess electricity from solar or wind power in large tanks of white-hot molten silicon, and then converts the light from the glowing metal back into electricity when it’s needed. The researchers estimate that such a system would be vastly more affordable than lithium-ion batteries, which have been proposed as a viable, though expensive, method to store renewable energy. They also estimate that the system would cost about half as much as pumped hydroelectric storage — the cheapest form of grid-scale energy storage to date.

Traditional solar photovoltaics in good locations can accomplish much the same for much reduced cost, and with only a few times more land than the microwave link approach would demand. The installations will be serviceable and will last longer. Batteries seem an easier way to cover storage shortcomings than launching stuff to space. I did not even address solar thermal schemes in this post, which competes well with photovoltaics and can very naturally build in storage capability.

I am left puzzled as to why we would want to take a harder, more expensive road to solar power. I think it is just not intuitive to most how difficult and expensive space is. And perhaps they think it’s very futuristic and cool to push our power generation out to space: it fits the preferred narrative about where we’re going. I don’t know—I’m just guessing.

In a commentary for the New Left Review this week, the sociologist Dylan Riley argues that the Biden administration’s attempts to promote decarbonization and green jobs through industrial policy are doomed to failure and that the same could be said of the “neo-Kautskyite” left’s more ambitious vision of a Green New Deal. After all, neither Biden nor reformist socialists “have a credible answer to the structural logic of capital.” Those who comprehend that logic know that “gradualism cannot work” and that the alternative course of action is straightforward: “The commanding heights of the economy — in this period, finance — must be seized at once.” Any other strategy, Riley explains, is doomed to failure.

Riley feels no responsibility to explain how, precisely, the infinitesimal segment of the U.S. population that regards Bernie Sanders as intolerably reactionary is to seize control of high finance, in defiance of the U.S. military, posthaste. In his (apparent) view, all that is required to establish the implausibility of any and all attempts at reform are a few tendentious theoretical premises; all that’s needed to establish the plausibility of revolution, by contrast, is nothing.

The biggest hurdle to widespread implementation of solar power is the fact that the sun doesn't shine constantly in any given place, so backup power systems are needed for nights and cloudy days. But a novel system designed by researchers at MIT could finally overcome that problem, delivering steady power 24/7.

The basic concept is one that has been the subject of much research: using a large array of mirrors to focus sunlight on a central tower. This approach delivers high temperatures to heat a substance such as molten salt, which could then heat water and turn a generating turbine. But such tower-based concentrated solar power (CSP) systems require expensive pumps and plumbing to transport molten salt and transfer heat, making them difficult to successfully commercialize — and they generally only work when the sun is shining.

Poverty is understood as income poverty in this work. Although this reflects an indirect approach to the poverty concept in general, it is in line with the focus on monetary transfer payments.168 Since income determines each individual’s opportunity set, differences in income poverty and inequality are indicators for changes in real freedom before and after a policy reform. In order to measure this type of poverty, Foster and Sen (2010) mention two aspects that are of importance. First, those who are considered poor have to be identified out of the total target population. Secondly, the different characteristics of the identified groups must be aggregated to quantify the society’s level of poverty (Foster and Sen 2010, p. 165). Relying on income poverty, the group of poor can be identified by the determination of a certain poverty line so that everyone below this threshold is considered poor. The issue of aggregation then is simplified to the question how to rank different income distributions and “of choosing a functional form that maps different income vectors (and poverty lines) into a numerical index of aggregated poverty” (Foster and Sen 2010, p. 165). The poverty line selected in this work concentrates on relative instead of absolute poverty. Relative poverty lines have the advantages of including costs of social inclusion (Garroway and de Laiglesia 2012, p. 15). The extent of relative income poverty always depends on the income distribution of the population. Similar to the general usage in the European Union, poverty is defined here as having less than 60 % of the median equivalent income of all households at one’s disposal.169 This indicates the risk-of-poverty line (Antuofermo and Di Meglio 2012, p. 7). The equivalent (or equivalised) income of a household is the total disposable income of this household divided by a weighting factor related to the household size. This factor is determined by the modified scale of the OECD. This weighting scale states that the main receiver of income has a value of 1 while every other member of the household of at least 14 years of age accounts for only 0.5. Furthermore, every child up to the age of 13 is ascribed to a weighting factor of 0.3.170 For example, the income of a couple with a 5-year old and a 16-year old child is divided by 2.3 to calculate the household’s equivalent income.171 To measure the impact of the basic income reform on poverty, this work relies on the Foster-Greer-Thorbecke (FGT) family of poverty measures (see Foster et al. 1984).172 The FGT measure of poverty is given as (6.11) with z being the poverty line.173 While n represents the number of observations, q indicates the number of households whose income is below the poverty line. Furthermore, yi is the i-th household’s equivalent income. The term zyi z is then the normalized shortfall with regard to the poverty line. Parameter ˛ represents a weighting factor accounting for the severance of income poverty. It can be interpreted – similar to the inequality aversion that will be discussed in the following section – as a weighting of inequality among the poor and how strong this inequality effects general statements on poverty (Foster and Sen 2010, p. 179). Thus, the higher ˛ the more weight is given to households far below the poverty threshold. Both the poverty line z and the weighting factor ˛ are exogenously given. Certain values of ˛ – 0, 1, and 2 – are of specific importance because the FGT-index is able to include different poverty measures so that they become special cases within the FGT-index. Setting ˛ D 0, the FGT-index yields the headcount ratio H so that FGT˛D0 D q n D H (6.12) which measures the incidence of poverty. It is the proportion of those who are poor with respect to the total population. This means H is independent of the income distribution among the poor. ˛ D 1 represents the per capita poverty gap index which accounts for the severance of poverty. It is defined as with q D 1 q Pq iD1 yi being the arithmetic mean of all income below the poverty line. In this case FGT˛D1 is equal to the headcount ratio multiplied by the poverty gap index I (1 q z ) (Faik 1995, p. 321). It shows the mean shortfall from the poverty line expressed as a percentage of this poverty threshold. Any ˛>1 puts more weight on those income far below the poverty line. From all those, ˛ D 2 is a special case because FGT˛D2 weights the normalized shortfall just by itself (Foster and Sen 2010, p. 179). It can further be expressed as where CV is the coefficient of variation. It is defined as CV2 P D 1 q Pq iD1 .qyi/ 2 2 q (Celidoni 2011, p. 4). This class of poverty measures has been widely used in applied work on income poverty due to its convenient properties (see e.g. Anand (1983), Huppi and Ravallion (1991), Ravallion (1994), and Bourguignon and Fields (1997)).174 Table 6.19 shows the pre- and post-reform poverty rates. While the poverty line is calculated using the overall income distribution, the values in Table 6.19 reflect the fraction of a specific household type that lies below this line. The estimated overall poverty rate is about 21.97 % which is slightly higher than official figures. This discrepancy is due to the sample restriction since the analysis is confined to the population able to work. Additionally, the data base differs as official figures are based on either the German Microcensus or the EVS. However, the structure of poverty reflects the overall situation rather well. One-adult households and especially lone parents show a higher incidence of poverty, whereas poverty rates of married couples are significantly lower than the average. Families with many children are disproportionately affected from poverty as well. It should be noted, however, that the severity of poverty is not too pronounced; thus, the income distribution below the poverty line is rather flat. This gets obvious especially by looking at ˛ D 2 where the normalized difference is weighted by itself. The low values of the poverty gap are generated by the fact that even in the status quo the socio-cultural subsistence level is secured by the public transfers mainly unemployment pay II. The second part of Table 6.19 (columns 5–7) shows that substituting the meanstested benefits by a comprehensive basic income scheme lowers poverty rates significantly. The overall poverty rate drops about 5 % points from 21.97 % to 16.3 % . The decline in poverty is most distinctive for families with an overall decrease of almost one half (from 22.36 % to 13.17 %). This sharp decline is due to the installation of a child-related basic income that surmounts existing child benefits. As the table indicates, beneficiaries of the reform are mainly families with many children, married and lone parents alike. The reduction in poverty rates for childless households is less distinct, but perceptible as well. Again, married couples benefit more than one-adult households. The severance of poverty declines for all types of households as they are moved closed to the poverty line due to the higher transfer payments. This is especially true for lone parents. However, the basic income scheme reduces the heterogeneity related to income among the poor as very low-income households are supported in a better way.

The aim of this paper was to assess tax policy reforms that can sustain universal basic income programs and foster long-term growth and welfare in an African currency union that faces fiscal constraint and inequality. Theoretically, the relationship between tax policy and universal basic income remains unsettled. The proponents of a universal basic income program advocate four fundamental development principles. By contrast, the opponents of the universal basic income program challenge those four development principles. To address this ongoing debate, we developed a Dynamic Stochastic General Equilibrium Model of universal basic income enriched with three fiscal policy strategies. We model the fact that, to alleviate inequality and raise long-term growth and welfare, government members adopt a universal basic income program, which is financed by three fiscal policy strategies. The first fiscal policy strategy is the increase in taxes on realized capital gains. The second is the expansion of corporation income tax. The third is the total phasing-out of the oil subsidy program within the currency union.

The findings show that the effectiveness of universal basic income on productivity growth, inequality, and welfare is dependent on the type of fiscal policy used to fund it, specifically the trade-off between tax policy and transfer policy. While universal basic income funded by tax policies is effective in reducing inequality and increasing growth and welfare, universal basic income funded by completely eliminating oil subsidies appears to be the best policy in terms of growth, welfare, and inequality reduction. Hence, to influence long-term productivity growth, welfare, and inequality via universal basic income within the monetary union, the government will face a trade-off between expanding the tax base and reducing public spending. Second, when the currency union faces an oil crisis, a universal basic income funded by tax policy is more effective in combating stagflation and inequality than a universal basic income funded by oil subsidy elimination. So, oil subsidies appear fundamental in supporting economic activity and welfare when the currency union is in a crisis situation. This is because, by raising taxes on corporates and higher-income households, the government uses those fiscal revenues to fund subsidies and policies that directly target low-income households and reduce inequality between low-income households and high-income households. Third, the normalization of monetary policy following the inflation crisis leads to two opposite effects. On the one hand, universal basic income is more effective in reducing consumption inequality since lower-income households consume more and save less due to monetary policy normalization, more so under the third fiscal policy, rather than the second and first fiscal policies. On the other hand, universal basic income is unable to circumvent income inequality due to lower growth and lower employment induced by the normalization of monetary policy, more so under the third policy rather than the second and first fiscal policies.

First, universal basic income funded by an increase in capital gains raises the consumption of non-oil goods, which are mostly demanded by low-income households, and decreases oil consumption, which is primarily demanded by higher-income households. As the share of lower-income households is greater within the monetary union, their consumption demand offsets the consumption demand of higher-income households and leads to an increase in total consumption and a reduction in consumption inequality.

Second, universal basic income funded by an increase in corporate income tax contravenes the operation of less competitive corporations, which enhance the profitability of investment within the union, both in the short and the long term, and hence the total factor productivity growth. As a result, investment opportunity costs fall, and competitive corporations find it optimal to invest more, while less competitive corporations find it optimal to invest less. This substitution effect intensifies the increase in investment and labor demand. Labor demand expansion puts upward pressure on labor income and induces a reduction in income inequality.

The earned income tax credit (EITC) is a large federal aid program administered through the tax system. Benefits are available to households with earnings from employment. In 2021, the program provided $71 billion in benefits to 27 million recipients. The EITC is mainly a spending program, not a tax‐​cutting program. The credit is “refundable,” meaning that individuals who pay no income taxes receive payments from the government. About $69 billion of the benefits in 2021 were refundable.

The EITC has a high error and fraud rate, and for many recipients it creates a disincentive to increase earnings. Also, the refundable or spending part of the EITC imposes a cost on the people who pay the taxes that fund the benefits.

In this paper, we compare subsidies of low-wage work, such as the Earned Income Tax Credit (EITC), to unconditional cash transfers—or what is commonly referred to as a universal basic income (UBI).2 The EITC helps families with low earnings but does not provide any support to those without earnings. It is an extremely popular policy because it redistributes income to low-earning families while encouraging work. In contrast, a UBI provides unconditional support to everyone and is often combined with a progressive tax on earnings. In this paper we argue that a UBI would be preferable to subsidies of low-wage work on economic, moral, and political grounds. The economic arguments for a UBI are twofold: • First, subsidies of low-wage work, such as an EITC, distort incentives; they cause people to work more than they otherwise would. A UBI would reduce the resulting inefficiency, so that there would be a bigger economic pie to distribute, and more money would go to those who need it. In this paper, we call this the “magic bucket”: the idea that by moving from a world in which we provide subsidies of low-wage work to one in which we provide universal transfers, we incur societal savings. As we reduce conditional (EITC) payments to support an unconditional (UBI) transfer system, individuals work less, which leads to government savings from fewer and smaller EITC transfers. As a result, you can reduce EITC payments by less than $1 to pay for $1 of UBI. Second, subsidies of low-wage work depress wages. By providing incentives for people to work, such subsidies allow employers to pay less, so they are, at least in part, a transfer to employers rather than workers. Replacing subsidies of lowwage work with a UBI would improve workers’ bargaining position and wages. We also argue that there are important moral and political considerations for unconditional transfers, such as a UBI, over conditional ones, such as an EITC: • First, a UBI would increase individual liberty and would improve fairness. This sort of benefit would allow people in abusive relationships with domestic partners, employers, or government administrators to leave the situation without fear of material destitution. Unconditional benefits would also improve fairness by remunerating unpaid care work (particularly by women), civic engagement, and cultural production. • Second, a UBI would be politically more sustainable and popular than narrowly targeted transfers. Universal benefits tend to have stronger democratic support than conditional benefits for the poor. In summary, these arguments suggest that a UBI would give more to those who need it, would promote liberty, and would be politically viable and stable. If one accepts these arguments, a political case needs to be made for a UBI. Any such case must grapple with and overcome distinctions drawn between the “deserving” and the “undeserving” poor. Such distinctions underpin the popularity of conditional transfers among politicians, but that underpinning has historically often been based on racial discrimination. A case for a UBI also needs to provide alternative narratives of a shared fate and shared interests, of a common defense of liberty, and of the valuable contributions of those working outside paid labor.

A new  released by , which disseminates research by Harvard scholars on the topics of economic growth, employment, and inequality, argues that a universal basic income is superior to current low wage subsidies in several ways. The author, Associate Professor of Economics at Harvard, Dr.  contends that these subsidies, specifically the Earned Income Tax Credit (EITC) in the United States, comparatively carries several economic, moral, and political disadvantages.

The EITC is a subsidy to low income working families and increases with income to , depending on household size. The credit has been found to , reduce welfare dependency, improve child health and educational outcomes, and lifts roughly  above the official poverty line. Kasy argues that a basic income could produce similar outcomes while eliminating several important drawbacks. First, because the demand for labor is finite, especially in times of recession, incentivizing some workers to work more, which ultimately creates fewer jobs overall. In other words, if a service sector employee works overtime hours in order to maximize the EITC credit, her employer will not need to hire an additional employee to cover those hours. Further, multiple researchers have found that subsidizing low wage work via the EITC plus cuts to traditional welfare, in the 1990s, decreased pressure on employers to offer a living wage and ultimately contributed to the declining value of the minimum wage. In essence, Kasy argues, the EITC is a subsidy to employers. Conversely, a UBI would increase the bargaining power of workers and wages would thusly rise.

Most policy analysts believe that the Earned Income Tax Credit (EITC) substantially reduces poverty and increases employment in an administratively efficient and well-targeted way. This is not true. In this paper, I show that simple mismeasurements have greatly overstated the efficiency and effectiveness of the EITC program. To determine how much the EITC reduces poverty, researchers run a couple of simple calculations using the Annual Social and Economic Supplement (ASEC) of the Current Population Survey (CPS). In the first calculation, they determine how many individuals have a disposable income that puts them below the poverty line based on the Supplemental Poverty Measure (SPM). In the second calculation, they do the same thing, but this time with the EITC subtracted from each person’s income. The difference between the two numbers, which was 5.6 million people in 2018, is then  to be the number of people pulled out of poverty by the EITC.

Unlike other benefit incomes, the EITC values in the ASEC are not based on survey questions. Instead, the Census imputes them by running a tax simulation on each unit’s reported earnings. This approach has three problems that cause the antipoverty impact of the EITC to be way overstated.

The Earned Income Tax Credit (EITC) is a major part of America's work-focused safety net. At the end of each tax year, parents who work but have low incomes can receive up to . Conservatives like it because it rewards work; liberals like it because it helps poor families. Some on both sides have suggested , especially for childless workers, who receive far smaller credits than those with children (just $529 this year).

An  from Princeton’s Henrik Kleven, however, argues that the pro-work impact of the EITC has been hugely overstated. Indeed, it implies that the credit has done essentially nothing to increase work. This doesn't mean we should repeal it. But it does mean we should give serious thought to reworking how it operates. 

Furthermore, revisions of EU ETS will include the following changes:

Increase the overall goal for emissions reductions: 62% reduction by 2030 (compared to 2005 levels)

The International Monetary Fund estimates that the United States subsidized $649 billion of fossil fuels in 2015. Meanwhile, only about $20 billion of that is in the form of direct subsidies. The remainder is the implicit subsidy of misaligning the price of fossil fuels with their societal harms like air pollution and climate change. That is, the vast majority of fossil fuel subsidies is the absence of carbon pricing. All developed countries except the US and Australia cut down on fossil fuel subsidies by pricing carbon emissions. Experts including scientists and the vast majority of leading economists have called on the US to follow suit. To offset higher prices consumers would face as a result of carbon pricing (or other climate measures), many of these experts suggest rebating the revenue to all Americans as a dividend. Two thirds of American voters support this policy, and as of this writing, 80 House Democrats have cosponsored the Energy Innovation and Carbon Dividend Act (EICDA) which would make it a reality in the US. Beyond the climate impacts of carbon dividend—policies like the EICDA are projected to meet the IPCC’s goal of net zero emissions by 2050 and avert 295,000 deaths from air pollution in the first decade—many economists have documented the progressive distributional impacts of carbon dividends. As one example, University of Pennsylvania researcher Kevin Ummel found that the EICDA would benefit 96% of households in the bottom consumption quintile and 12% in the top quintile, after considering effects on prices, capital income, and the dividend. Using Ummel’s data1 and the 2018 American Community Survey,2 I extend this research to estimate the poverty impacts of a carbon dividend3 across a range of prices.4 I find that carbon dividends reduce poverty roughly linearly with respect to the price, for example by 10% at $100 per ton. Effects are larger for child poverty, deep poverty, and especially deep child poverty. How big would the dividend be? Carbon pricing proposals vary in their initial price and the rate at which they increase over time, though they do all increase in some way. The EICDA starts at $15 per metric ton in 2021 and rises by $10 per year, while the Senate’s Save Our Future Act starts at $54 per ton in 2023 and rises by an inflation-adjusted 6% per year (about $4 in the first year). Since American households currently emit about 5 billion metric tons of carbon per year, amounting to about 15 tons per person, each $10 carbon price would translate to a monthly dividend of 15 tons * $10 / 12 months = $13. How would the carbon dividend affect overall poverty? Poverty and deep poverty (the population share with income below half their poverty threshold) fall roughly linearly with respect to the carbon price: each $10 carbon price would reduce poverty by 1% and deep poverty by 1.2%. A carbon dividend of $100 per ton would reduce poverty by 10% and deep poverty by 12%. How would the carbon dividend affect poverty by age? Child and adult poverty also fall linearly with the carbon price, but child poverty falls about three times as quickly. A $100 carbon price would reduce child poverty by 19% and deep child poverty by 27%. How would the carbon dividend affect poverty by state? Poverty impacts also vary geographically, largely in line with states’ per-capita carbon emissions, which in turn correlate to cold weather and low population density. For example, consider the two extremes of how carbon dividends lower poverty: California ranks #10 on average temperature, #3 on population density, #49 on per-capita carbon emissions, and #1 in terms of poverty reduction from a carbon dividend. A $100 per ton carbon dividend would lower poverty in California by 14%, and lower deep child poverty by 30%. North Dakota ranks #49 on average temperature, #32 on population density, #2 on per-capita carbon emissions, and #50 in terms of poverty reduction from a carbon dividend. In fact, North Dakota is the only state for which a carbon dividend would increase poverty, though only by 3% at $100 per ton; child poverty would still fall, and its poverty rate would remain one of the lowest in the country. Politicians from Bernie Sanders to Pete Buttigieg to Mitt Romney have endorsed carbon dividends, primarily framing the dividend as a way to offset potential regressive effects of the carbon price. However, the dividend more than neutralizes the carbon price: it makes a significant reduction to poverty in America. A $20 carbon dividend would cut poverty more than a fully-phased-in $15 minimum wage would,5 while a $100 carbon dividend (as the US would reach within a decade under proposed legislation) would approach the impact of the expanded Child Tax Credit.6 My estimates may even be conservative. For example, I assume that 100% of the carbon price is passed on to consumers, but one study finds that only 70% is passed on. In his analysis of the EICDA, Ummel applies pass-through rates of 70%, 85%, and 100%, with the remainder borne by people in proportion to their investable assets; he finds that lower pass-through assumptions yield more progressive distributional impacts. Carbon dividends would also create infrastructure for further cash assistance. When the US government had to keep Americans afloat with relief checks in the Covid-19 pandemic, they relied on the IRS, and largely failed to reach nonfilers. Had even a small universal payment program existed at the time, they could have simply increased the amount instead. The carbon dividend is a simple policy that can help the US progress on a slew of objectives: climate change, air pollution, financial resilience, and, yes, even poverty.

It's not a new idea, but few could have predicted that talk about  would be receiving as much attention as it is today — especially among candidates for president of the United States.

 has made UBI  and is now enjoying a steady rise in the Democratic primary race. Other candidates, including  have  to the idea.