Nobel Prize Winner: Fossil Fuel Tax Will Boost Economy

| by Nik Bonopartis
Joseph StiglitzJoseph Stiglitz

A top adviser to Hillary Clinton says the Democratic nominee should hike taxes on fossil fuels if she becomes president, arguing that more expensive heating, electricity and transportation would "stimulate the economy" and force people to find alternate energy sources.

Joseph Stiglitz, a Nobel Prize winner in economics who teaches at Columbia University in New York, told CNN Money that he believes raising taxes on fossil fuels would not only be an economic boon, but also help address climate change.

"I think a carbon tax would stimulate the economy" by forcing companies to remodel factories and redesign supply chains to remain competitive. That, Stiglitz argued, would lead to new jobs and economic growth.

In the interview, Stiglitz admitted the plan probably isn't something voters want to hear. He told CNN that while he's pitched his ideas to Clinton, she hasn't made it part of her economic pitch to Americans.

Stiglitz said he's fine with that, as long as Clinton wins the election.

"There's nothing more important than making sure [Clinton] gets elected as opposed to Trump," Stiglitz said. "One has to be sensitive to what you can sell in a campaign."

As CNN noted, a carbon tax would have a major impact on the lower  and middle classes, citing a Congressional Budget Office report that estimated such a tax would cost the average middle class American family about $600 a year.

Stiglitz has been making the media rounds recently to promote his new book, "The Euro: How a Common Currency Threatens the Future of Europe."

In an interview with the New Republic published on Aug. 18, Stiglitz said a common currency impeded the ability of individual European countries to respond to economic hardship. The unified currency, combined with the lack of flexibility for individual countries to set their own monetary policies, has caused "more inequality within countries and more disparity across countries," Stiglitz told the magazine.

He also faulted Europe's lack of a common tax system, so-called "place-based debt" that allows people to simply move to another European Union country to avoid paying debts, and powerful countries like Germany setting economic policies that harm the economies of countries like Greece, Spain and Portugal.

"We’ve given a third of a century to this failed neoliberal ideology," Stiglitz said. "We ought to be striving to look for these alternatives."

Sources: CNN, New Republic / Photo credit: Wikimedia Commons

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