Over the course of the next two years, the Center on Global Energy Policy will complete the following series of projects that provide clear, objective, and data-driven research on carbon taxes to policymakers, business leaders, students and the general public. Additional research projects and institutional partners will be added to the initiative over time.

REPORTS

Carbon Tax Design Options (January 2018)

What is the value of a carbon tax, and what are the different design options policymakers should consider? This first project in the series, in collaboration with the Rhodium Group, addresses issues including: the level of the tax rates, where a tax could be applied, how broad it could be, revenue use alternatives, and how to address concerns of international competitiveness and emissions leakage.

The Energy, Economic and Environmental of a Federal US Carbon Tax (July 2018)

This short, accessible report summarizes the results of the following three studies that analyze a common set of carbon tax policies: 1) Energy and Environmental Implications of a Carbon Tax in the United States, 2) Distributional Implications of a Carbon Tax, and 3) The Effects of Carbon Tax Policies on the US Economy and the Welfare of Households. This summary report also provides guidance for interpreting the studies’ findings in light of model limitations, similar studies, and other relevant factors.

Energy and Environmental Implications of a Carbon Tax in the United States (July 2018)

This project, conducted in collaboration with the Rhodium Group,  provides insights into the likely effects of carbon taxes on energy producers, consumers, and markets, as well as on U.S. emissions of greenhouse gases. The original analysis conducted by the Rhodium Group using the RHG-NEMS model examines various carbon tax scenarios. The findings shed light on the impacts of different carbon prices on emissions outcomes and the achievability of the U.S. commitments to the Paris Agreement, as well as impacts to fossil fuel and renewable energy production.

Distributional Implications of a Carbon Tax (July 2018)

This project, in collaboration with the Urban-Brookings Tax Policy Center, analyzes the impacts of various potential carbon taxes on U.S. households of different income levels. The results come from a state-of-the-art microsimulation model, using the results from the Rhodium Group’s energy sector modeling as inputs. The findings will help policymakers understand how the economic outcomes of carbon tax policies differ across households.

The Effects of Carbon Tax Policies on the US Economy and the Welfare of Households (July 2018)

This project, in collaboration with The Baker Institute for Public Policy at Rice University, examines how various potential carbon taxes affect macroeconomic outcomes (GDP, investment, labor supply, etc.) as well as impacts across households of varying income levels. The results come from a computable general equilibrium (CGE) model designed to analyze both short-run and long-run macroeconomic outcomes, as well as intergenerational and intragenerational distributional effects, and  uses the results from the Rhodium Group’s energy sector modeling as inputs.

Emissions, Energy, and Economic Implications of the Curbelo Carbon Tax Proposal (July 2018)

Along with scholars from the Rhodium Group and Rice University, CGEP research scholar Noah Kaufman analyzes carbon tax legislation proposed by Congressman Carlos Curbelo, the first federal carbon pricing proposal from a congressional Republican in nearly a decade. The analysis includes projected effects of the legislation on: greenhouse gas emissions; the production and prices in key energy markets; national macroeconomic outcomes, and; the welfare of low-income families.  

Interaction with Existing Policies (Fall 2018)

Certain federal and state policies make good complements to a federal carbon tax; others are duplicative or conflicting. Many “climate policies” have additional objectives, such as reducing local air pollution, enhancing energy security, and creating jobs. It will be important for policymakers to understand these policy interactions as they consider what policies to add, subtract or change when a federal carbon tax is implemented. This project is in collaboration with with Columbia University’s Sabin Center for Climate Change Law.

Transition Assistance (Winter 2018-2019)

A carbon tax will reduce demand for coal, among other changes to the fuel mix, and will have a significant effect on U.S. coal companies, coal miners, and the communities in which they live, exacerbating the pressure they already face from decades of mechanization in the coal industry, low-cost natural gas as a competitor to coal, and generally weak domestic electricity demand growth. This project will examine how the combination of market forces and public policies may affect coal communities, and outline ways a carbon tax can be designed to provide benefits to these communities.

Commentaries

Alternatives to the Social Cost of Carbon in Taxes and Subsidies

This commentary evaluates five approaches for setting CO2 prices based on the benefits and costs of reducing CO2 emissions and compares them across various desired attributes.

The Use of Current Social Cost of Carbon Estimates in Taxes and Subsidies

Noah Kaufman examines the history and application of the social cost of carbon (SC-CO2) in the United States, focusing on the use of the SC-CO2 to set carbon tax and clean energy subsidy rates.

Can China’s CO2 Trading System Avoid the Pitfalls of Other Emissions Trading Schemes?

Noah Kaufman and Jonathan Elkind explore whether China’s national CO2 emissions trading system (ETS) is likely to drive significant emissions reductions. 

Putting a price on vehicle emissions is better policy than it seems

Noah Kaufman describes why the effects of a carbon tax on vehicle emissions may be more substantial than conventional wisdom suggests. Kaufman acknowledges that a carbon price by itself may not rapidly decarbonize the transportation sector, but he argues that it is an important component of a cost-effective strategy for addressing vehicle emissions. 

Op-Eds

Oil industry and climate activists agree on one solution: carbon tax

Noah Kaufman | The Hill | July 24, 2018

When it comes to action on climate change, few groups have less in common than the oil industry and climate activists. Writing in The Hill, CGEP Scholar Noah Kaufman argues that both groups, however, may find something to like in the same kind of climate policy: a carbon tax