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Noah Kaufman @noahqk
, 13 tweets, 4 min read Read on Twitter
Here's a @ColumbiaUEnergy working paper that describes the new carbon tax bill led by @RepTedDeutch and @citizensclimate and compares it to other carbon tax proposals, so you don’t confuse your CCLs with your CLCs (thread with highlights below): .…
The Deutch bill’s carbon tax rates are much higher than other recent proposals' by the mid-2020s, which would mean larger emissions reductions, revenues, and energy market impacts:
Like the Baker/Schultz bill, the Deutch proposal would return all carbon tax revenues (net of minor admin costs) to Americans in the form of monthly rebate checks:
Using revenues for rebates creates a very progressive policy. Low- and middle-class households buy a relatively small share of the country's CO2-intensive products and don’t own fossil fuel companies, so, if they receive an equal share of the revenue, they tend to come out ahead.
Second, using revenues for rebates sacrifices the opportunity to use revenues in ways that might provide a larger boost to the economy (like lowering taxes on work, a la Whitehouse bill) or improve government services.
Third, people have very strong opinions about whether rebates are the best way to gain political support for a federal carbon tax policy. You can find evidence to support or refute these opinions. We don’t really know.
We haven’t completed a detailed analysis of the Deutch bill yet, so we can’t say anything precise about its likely impacts, but here’s some circumstantial evidence:
With far lower tax rates, the Whitehouse proposal alone (putting aside the need for other policies) gets close to the Deutch bill’s 2030 emissions target of 45% below 2015 levels. It's pretty safe to say the Deutch policy would achieve this 2030 target:
While we haven’t analyzed a policy with this tax rate trajectory, the overwhelming consensus in the literature is that national macroeconomic impacts of carbon taxes (including fee-and-rebate policies) are likely to be small:
The policy would be a huge boon to carbon-free energy technologies, and the coal industry would be crushed. Much weaker carbon taxes are sufficient to almost entirely eliminate the use of coal for electricity in the United States by 2030.
Here's a comparison of the major regulatory changes in each carbon tax proposal. The Deutch bill suspends EPA regs of emission from stationary sources covered by the tax (likely irrelevant given the tax rates) but keeps everything else (like vehicle standards).
Bottom line: it's an ambitious, market-based climate proposal with bipartisan sponsors. That's an important development, even if it's near-term prospects are dim.
You can find all of the carbon tax research from @ColumbiaUEnergy and our partners on our website:…. More coming soon! \end
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