Thread by @noahqk

Please check out a new interactive table from @ColumbiaUEnergy on the compatibility of a federal carbon tax with other policies that address emissions. And here’s a short thread to explain (1/x):
energypolicy.columbia.edu/compatibility-…

Start with these three statements:

1. The price on carbon should be far larger than zero.
2. A carbon price alone is not an ideal climate policy.
3. Some policies fit better alongside a carbon price than others.

Even on twitter, these are uncontroversial, right?

…And they naturally lead to the questions: which new policies should be added when a carbon tax is implemented, and what existing policies should be changed or eliminated?

To help policymakers answer those questions, we propose a standard framework to assess the compatibility of a federal carbon tax in the US with other policies that influence GHGs.

We call a policy “complementary” with a federal carbon tax if EITHER:

-It enables more cost-effective GHG reductions than a carbon tax on its own;

OR

-It reduces GHGs *and* achieves a separate policy objective more cost-effectively than a federal carbon tax on its own.

A policy is “redundant” with a federal carbon tax if it leads to additional costs to society without achieving additional emissions reductions

Real-world policies often do not fall cleanly into either category, so we categorize policies on a spectrum from complementary to redundant with a carbon tax ⬇️ (see link above for interactive version with explanations).

Plenty of policies complement a carbon tax (if well-designed!), because they address market barriers that have little to do with price differentials, they address emissions the tax doesn’t cover, or they address entirely separate policy goals (like local air pollution regs).

One policy is categorized as purely redundant with a carbon tax: regulations of GHG emissions that are covered by the carbon tax but force sectors or entities to take specific actions or to achieve specific targets (like the Clean Power Plan).

Ok ok ok, you're angry with me, and I know why...

Policy details matter! Our categorizations assume the carbon tax and other policies are jointly set at "ideal" levels to achieve an emissions target. If it turns out we get a weak carbon tax instead, other policies need to pick up the slack, which “shifts” our spectrum like this:

This is not an exact science. Making judgments about cost-effectiveness or even the goals of policies involves *a lot* of strong assumptions. So, we are under no illustration that we’re providing a single “correct” framework or categorization. People can and should disagree.

But policymakers cannot avoid confronting these decisions when designing or considering a carbon tax proposal (or really any climate policy package, which gives me an excuse to write #GreenNewDeal).

So our goal is to contribute to a rigorous conversation on this topic that avoids the extreme declarations you often hear on both sides.
A man can dream, right?

“A carbon tax is all we need!” This framework helps explain why it’s not.

"That carbon tax proposal would strip the government of all its authority to regulate emissions!" Does it really? It may just narrowly chop off authority to implement only the most redundant regulations.

Thx for reading. And if what you *really* want is to read 50 pages and 220 footnotes of this, I have good news: here's a link to a paper, with lead-author @JMGinNYC (formerly of @ColumbiaLaw) and Ron Minsk: energypolicy.columbia.edu/research/repor…