What would Milton Friedman do about climate change? How do we apply Friedman’s approach in the 21st Century? And what are the real-world economic and political realities of addressing climate change in the U.S. and as an international community? EPIC’ Michael Greenstone and Steve Cicala gave their take.
Climate change is an issue that largely splits between party lines. But when it comes to the best approach to confront climate change, economists of all political stripes are weighing in with free market solutions. In Free to Choose, Milton Friedman’s 1980 book and 10-part PBS television series, the famed UChicago economist had a lot to say about the power of free markets to solve problems where other solutions have failed.
So, what would Milton Friedman do about climate change? How do we apply Friedman’s approach in the 21st Century? And what are the real-world economic and political realities of addressing climate change in the U.S. and as an international community? Energy Policy Institute at Chicago (EPIC) Director Michael Greenstone and researcher Steve Cicala explored these topics in a panel discussion on October 8th moderated by former Congressman Bob Inglis (R-SC) and hosted by the University of Chicago Institute of Politics. Greenstone and Cicala made the case for a price on carbon — a policy, they say, all economists agree should be put into place.
“The media always reports that there’s near consensus amongst scientists about the fact that human activity impacts climate change. What does not receive as much attention is that I think there’s even greater consensus amongst economists, starting from Milton Friedman and moving onto the most left-wing economists that you could find that the obvious correct public policy solution for this is to put a price on carbon,” Greenstone said during the panel. “It’s not controversial.”
Cicala joked, “And we don’t agree on all that much,” he said, “What should the price on carbon be? That’s a great debate to have, but it’s certainly not zero (which is what it is today with no price on carbon).”