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Yellen, who served as Fed chair from 2014-2018, said the
combination of social injustices exposed by the coronavirus
pandemic and Black Lives Matter protests, and wildfires in
California, could boost support for the proposal.
"There really is a new kind of recognition that you've got a
society where capitalism is beginning to run amok and needs to
be readjusted in order to make sure that what we're doing is
sustainable and the benefits of growth are widely shared in ways
they haven't been," Yellen told Reuters in an interview on
Wednesday.
"What I see is a growing recognition on both sides of the aisle
that climate change is a very serious concern and that action
needs to occur," she said.
Yellen was speaking ahead of the launch on Thursday of a report
from a working group she co-chaired with former Bank of England
Governor Mark Carney setting out steps governments, regulators,
businesses and investors can take to accelerate a shift to a
low-carbon future.
Among the recommendations, compiled by the G30 network of former
central bankers, academics, policy-makers and financiers, was a
gradually increasing price on carbon to help transition
economies to net zero emissions.
Yellen has been working with a group https://clcouncil.org/Bipartisan-Climate-Roadmap.pdf
of Republicans, Democrats and companies known as the Climate
Leadership Council on a proposal to tax climate-warming carbon
emissions to encourage companies to shift away from fossil
fuels.
The plan aims to halve carbon emissions by 2035 from 2005 levels
with a tax starting at $40 per ton. While that would make
products like gasoline more expensive, the plan would return
dividends to families of about $2,000 in the first year.
"There's no question that if President Trump loses and the Biden
administration comes into place then climate change will be a
very high priority," Yellen said.
"I do see Republican support, and not only Democrat support, for
an approach that would involve a carbon tax with redistribution.
It's not politically impossible," she said.
Biden's campaign did not immediately respond to a request for
comment.
Some oil companies and moderate Republicans, including former
secretary of state James Baker, back the Climate Leadership
Council, which unveiled its proposals in February.
There is no mention of a carbon tax in the Democratic National
Committee Platform for the Nov. 3 polls. Biden's climate change
strategy favors direct federal investment in clean energy and
measures including targets for electrifying transport and
weatherizing buildings.
Nevertheless, Biden's climate strategy document, launched in
July, does mention that some cities, such as Boulder, Colorado,
are using energy taxes to reduce emissions.
"There is a lot of focus on what do we need to do to change the
direction to address long-standing problems, whether they're of
racial justice, or the distribution of income, or climate,"
Yellen said. "That is a kind of awakening that I think has been
taking place and I find that hopeful."
(Additional reporting by Valerie Volcovici in Washington;
Reporting by Matthew Green; Editing by David Gregorio)
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