In this special crossover episode of Resources Radio and Energy 360°, a podcast from the Center for Strategic & International Studies (CSIS) Energy Program, hosts Daniel Raimi and Sarah Ladislaw talk with Marc Hafstead, an RFF fellow and director of RFF's Carbon Pricing Initiative. Hafstead gives expert insight on the recent cluster of carbon pricing proposals that has been introduced in the US Congress; the major design elements of these bills, such as how revenues are used; how border adjustments can help protect US manufacturers; the political viability of these different proposals, including which policy elements might help build support for a carbon price; and whether other policy approaches, such as a Clean Energy Standard, stand more of a chance in today's political environment.
Notable quotes from the podcast:
- “All of these [carbon pricing] policies that we've seen introduced this year, by our estimation using the [RFF] carbon pricing model … will achieve the 2025 Paris Agreement of emissions [reductions]―26 to 28 percent below 2005 levels. Even the least ambitious in terms of the price still achieve that policy … But still, all these policies are doing quite a bit to set us on the path towards decarbonization.”―Marc Hafstead (5:59)
- “One of the major similarities in all the [carbon pricing] bills is the recognition that we need to put a border adjustment to keep our domestic industries competitive. Whether that's putting a fee on imports of goods, or whether that's rebating the fee on exports—both of those will help the US industries remain competitive in a world where other countries aren't pricing carbon the same way we are.”―Marc Hafstead (18:00)
- “Revenue use is really, really important when it comes to understanding what the economic costs of the policy are going to be; it's less important for the emissions reductions. The price signal is really what's driving the emissions reductions, but the use of the revenue is really going to be important for not only what the overall costs of a policy are going to be, but also how those costs are going to be distributed across different parts of the economy.”―Marc Hafstead (11:30)
- “I think that the revenue is going to be the grease which is going to get this through Congress. And I'm not sure we're going to see kind of a pure revenue approach, in terms of all the revenue going to dividends, or all the revenues going to payroll taxes [and] tax cuts. I think what you'll see is that there will be some negotiations.”―Marc Hafstead (22:32)
Resources for the Future (RFF) is an independent, nonprofit research institution in Washington, DC. Its mission is to improve environmental, energy, and natural resource decisions through impartial economic research and policy engagement. RFF is committed to being the most widely trusted source of research insights and policy solutions leading to a healthy environment and a thriving economy.
Unless otherwise stated, the views expressed here are those of the individual authors and may differ from those of other RFF experts, its officers, or its directors. RFF does not take positions on specific legislative proposals.