The United States is currently on pace to fall well short of its promises to reduce greenhouse gas emissions by 26–28%, relative to 2005, by 2025, under the UN Framework and Convention on Climate Change (UNFCCC) Paris Agreement, even if President Trump did not eliminate most Obama-era climate regulations. However, there still exists interest in reducing emissions, especially from some members of Congress, and there are a number of federal policy options to reduce greenhouse gas emissions if Congress (or a new administration in 2021) so chooses. In this paper, we show that a federal economy-wide carbon tax on US carbon dioxide emissions could significantly contribute to the reductions necessary to fulfill the US international climate commitments. Using a detailed multi-sector computable general equilibrium (CGE) model, we predict the carbon price paths that would be necessary to meet the 28% emissions target and show the economic costs of such carbon-pricing policies. We then demonstrate how both the price paths and associated costs change if action is delayed.
In Focus — Nov 30, 2023
In Focus: Carbon Markets and Carbon Dioxide Removal
This video shares insights about the risks of integrating carbon dioxide removal into carbon markets, with Massimo Tavoni, director of the RFF-CMCC European Institute on Economics and the Environment.
Common Resources — Nov 9, 2023
Adding an Emissions Cap to the Inflation Reduction Act Would Help Meet US Climate Goals
Implementing a federal cap-and-trade policy would complement the Inflation Reduction Act. Together, these two policies could reduce air pollution and retail electricity prices and ensure that the United States meets its national climate goals for 2030.
Working Paper — Nov 9, 2023
Leveraging the IRA to Achieve 80x30 in the US Electricity Sector
This working paper explores how a federal emissions cap could build on the emissions reductions promised by the Inflation Reduction Act.