WASHINGTON, DC—A new modeling analysis by Resources for the Future (RFF) Fellow Marc Hafstead examines the impacts of a carbon tax–gasoline tax swap. That plan is part of the MARKET CHOICE Act, which Rep. Carlos Curbelo (R-FL) is expected to introduce as early as next week.
The MARKET CHOICE Act would introduce a tax of $24 per ton (of CO2-equivalent) on greenhouse gas emissions. The tax rises at 2 percent annually. Dr. Hafstead finds that if the bill becomes law, energy-related CO2 emissions will be 29 percent below 2005 levels in 2030.
Other key facts and findings include:
- In the power sector, CO2 emissions are expected to be 56 percent below 2005 levels in 2030. For comparison, the Obama administration’s EPA projected CO2 emissions to be 32 percent below 2005 levels under the Clean Power Plan.
- Repealing the federal excise tax on gasoline and diesel fuel would significantly reduce price impacts at the pump. As a result, the analysis predicts very small changes in transportation-related emissions.
- Gross revenues from the tax on CO2 emissions are expected to exceed $1 trillion over the first 10 years of the policy. Read the full study: Considering a Carbon Tax-Gasoline Tax Swap: Projected Energy-Related US CO2 Emissions Reductions under the MARKET CHOICE ACT.