According to an October 2016 Pew poll, only about half of Americans believe that climate change is due to human activity. The U.S. remains home to a considerable number of “climate skeptics,” who clearly impact the politics around the issue, as they are unlikely to support costly actions such as carbon taxes intended to mitigate the challenge of climate change. Higher carbon taxes would have a direct effect on encouraging households and firms to consume less fossil fuels and would accelerate directed research in green technologies such as electric vehicles, solar panels, and other forms of renewable power.
In the absence of such carbon taxes, global carbon dioxide concentration levels are likely to continue to rise. This presents the challenge of how we will individually and collectively adapt to the new climate change challenges. If our summers are ever hotter, if our coastal areas face sea level rise and flood risk, we will need to unleash human ingenuity to tackle these emerging problems.
But how does the presence of climate skeptics affect the market for climate-related innovation? Economic theory suggests it can have a significant negative impact. In other words, climate skeptics don’t just stymie progress on climate policy. They ensure that would-be climate entrepreneurs have less incentive to invent.