How the US Can Meet Its Climate Commitments under Trump

WASHINGTON—A blog posted today by two Resources for the Future (RFF) researchers assesses the prospect of the United States meeting its pledge to reduce carbon emissions under the Paris Agreement—a critical component in the global response to climate change. Given both current policies and the uncertainty over future policies, the chances of meeting the US pledge seem small. But the authors suggest a cost-effective policy approach for success: the adoption of a national carbon tax.

RFF Fellow Marc Hafstead and RFF Postdoctoral Fellow Yunguang Chen coauthored “The Paris Agreement under Trump and the Merits of an Economy-Wide Carbon Tax.” Under the Paris Agreement, which went into force last November, the United States pledged to reduce greenhouse gas (GHG) emissions by 26–28 percent, relative to 2005 levels, by 2025. The authors’ concern about meeting that goal stems from a number of sources.

One is the US State Department’s 2016 Second Biennial Report of the United States of America, which states that US GHG emissions in 2025 are projected to be only14 percent below 2005 levels under current programs. Another concern centers on the possibility that legal challenges to carbon-reduction programs such as the Clean Power Plan or possible Trump administration policy changes in a number of areas could hinder efforts to reduce carbon emissions. They note that even with additional regulatory measures, such as heavy-duty fuel economy standards and others, US emissions levels in 2025 are projected to fall well short of the 26–28 percent Paris pledge.

But while noting such challenges, the researchers lay out a path forward: Citing their own earlier study, “Using a Carbon Tax to Meet US International Climate Pledges,” they underscore how a revenue-neutral, economy-wide tax on carbon dioxide emissions could meet the US pledge. “Our simulations,” they state, “show that . . . an economy-wide carbon tax implemented in 2017 and reaching $21–22 (in 2013$) per ton in the year 2025 would achieve the ambitious goal of reducing emissions by 28 percent.” They also note that if any proposed reduction programs for non-carbon GHG emissions should be scrapped by the new administration, an economy-wide carbon tax of $37–38 by 2025 still could meet the US commitment under the Paris Agreement. Further, the authors find that achieving these goals would come at a minimal cost if the revenues were used to finance cuts in either personal or corporate income taxes.

Read the new blog post: The Paris Agreement under Trump and the Merits of an Economy-Wide Carbon Tax.

Read the paper that shows the carbon-tax modeling: Using a Carbon Tax to Meet US International Climate Pledges.