An Economic Strategy to Address Climate Change and Promote Energy Security

Jason Furman, The Brookings Institution
Jason Bordoff, The Brookings Institution
Pascal Noel, The Brookings Institution
Manasi Deshpande, The Brookings Institution

Abstract

The related issues of climate change and energy security are now generally accepted as major challenges. U.S. greenhouse gas emissions contribute to climate change while its reliance on oil reduces its economic and national security. To tackle both problems, the United States must substantially reduce its consumption of fossil fuels.This paper presents a three-part strategy for addressing climate change and promoting energy security. First, the government should price carbon and oil correctly so that the private sector has an incentive to reduce their use. Second, the government should increase and refocus public investments on basic research and on long-run speculative energy technologies. Finally, the United States should lead by example and engage major emitting nations in an international response to climate change.