RFF Announces Major Initiative on Economic Analysis of a Carbon Tax

Resources for the Future today announced a major investment in a research initiative that will provide policymakers and other interested parties with cutting edge analysis and modeling of the economic and environmental impacts of adopting a carbon tax in the United States. The effort, which officially began on July 1, 2015, will objectively and thoroughly examine the costs and benefits of different policy choices associated with a carbon tax.

“To meet the challenges that climate change poses for countries around the world, it is imperative that we engage the power and creativity of the marketplace,” said RFF President Phil Sharp. “Building on many years of work analyzing policy options, RFF will be ramping up and sustaining its analysis and its engagement with leaders in all walks of life to thoroughly examine the many issues that arise for a carbon tax, an option that is widely preferred by economists.”

Under the auspices of RFF’s Center for Energy and Climate Economics, scholars will build on more than a decade of prior technical work at RFF on climate policies, including analysis of the recently unveiled Clean Power Plan, national and regional cap-and-trade programs, as well as a carbon tax.

The work will develop and integrate five sophisticated models that will be able to estimate the impacts of different policy options on several outcomes:

• economic growth
• environmental performance
• employment
• electricity prices
• household income across states and income groups
• economic performance of carbon-intensive sectors

This modeling effort will be the centerpiece of Considering a US Carbon Tax, an RFF initiative. As part of the initiative, RFF will widely share research findings, convene key stakeholders around specific issues, and foster a policy dialogue on the pros and cons of a carbon tax as a means to cost-effectively reduce US greenhouse gas emissions.

The three-year, $3 million effort is being launched through a leadership grant from the Linden Trust for Conservation, as well as significant contributions from Roger and Vicki Sant, the Rockefeller Family Fund, and other donors. In addition to committing its own institutional funds, RFF continues to seek additional philanthropic support to enable to the initiative to have its maximum possible impact.

Larry Linden, founder of the Linden Trust and former chair of RFF’s Board of Directors, said “RFF is the only academic-quality institution with the depth and breadth of analytic capacity, modeling infrastructure, experience and credibility, and nonpartisan approach to provide the kind of quality analysis that is going to be needed to turn good theory into good policy. The climate problem is one of the great challenges of this age and the kind of research RFF provides will be crucial to meeting it.”

More about RFF’s extensive existing body of research on a carbon tax can be found at www.rff.org/carbontax.

Those interested in more information on the initiative and ways to support it can contact Key Hill, RFF’s senior director of development, at [email protected] or 202.328.5042.