A Top Euro Prof: Reach for the Triple Dividend
|November 22, 2013||Posted by Staff under Views|
The Triple Dividend: Climate Change Mitigation, Justice, and Investing in Capabilities
This 2013 excerpt of a slide show was presented by Prof. Dr. Ottmar Edenhofer Jun 26 at Financing Global Public Goods, Workshop at MCC.
Rents can be used for distributive purposes like the reduction of poverty, or public investment!
• Conventional economic wisdom perceives rent taxation as neutral. Therefore, this „just“ tax has the largest potential to overcome the trade‐off between justice and efficiency. Additionally, only reproducible factors in production should earn income (labor and capital).
• The taxation of rents is perceived as a way to „socialise“ the commons even with private property rights.
• However, the potential of rent taxation is not neutral. Therefore, the potential for reaping a triple dividend is widely underestimated:
Rent taxation can be combined with intergenerational transfer schemes in which the newborn are endowed with assets financed by rents.
Additionally, rent taxation can be used to finance public infrastructure. Infrastructure can be seen as an investment in capabilities for the reduction of poverty.
Climate policy enhances the „Climate Rent“ which does not only mitigate climate change but also provides additional sources for infrastructure investments and intergenerational transfer schemes.
• The triple dividend might become the main motivation for climate policy.
Ed. Notes: You probably won’t ever find an academic speaking any clearer.