Quantcast

Carbon Tax Would Help U.S. Meet Paris Goals, Study Finds

Energy
Port Westward natural gas plant in Clatskanie, OR. About 20 percent of global greenhouse emissions comes from natural gas. Portland General Electric / Flickr

If the U.S. does decide to stay in the Paris agreement, a study conducted by the Massachusetts Institute of Technology (MIT) and the National Renewable Energy Laboratory (NREL) has confirmed a policy proposal that would enable us to meet our 2030 commitments, an MIT press release reported Friday.

Researchers studied various carbon tax proposals and found that they would be an effective means of reducing emissions and would have minimal impacts on the economy.


The joint MIT and NREL study was one of 11 such reports to look at the impact of a carbon tax in Climate Change Economics. The studies all started from the same set of assumptions; while the details of the studies' conclusions varied, all agreed that a carbon tax could be both effective environmentally and fair economically.

In order to reach their conclusions, researchers used two models: an MIT model of policy impacts on global climate and a NREL model of the U.S. electrical system, which allowed them to assess how proposals would impact that emission-generating sector specifically.

They examined proposals looking at three sets of variables: taxes beginning at $25 or $50 per ton of carbon emitted, yearly tax rate increases of one or five percent, and revenue distribution in the form of equal rebates for every household, individual tax breaks, or corporate tax breaks.

They found that a tax beginning at $50 and increasing by five percent would reduce emissions 63 percent by 2050 and meet both 2030 and 2050 Paris goals. A tax beginning at $25 would also meet the U.S.'s 2030 Paris goal if it was accompanied by a five percent increase.

The researchers also looked at which revenue-uses would be most efficient for the economy overall and which would be fairer in terms of minimizing the tax's impact on low-income Americans.

Using the revenue to give all taxpayers an equal rebate was the fairest option, but the least economically efficient, whereas using the revenue to reduce capital taxes was the most efficient, but the least fair.

However, researchers also looked at a compromise plan that would reduce corporate taxes and offer a rebate to the lowest-income families, a plan they said would have a minimal impact on the economy. Even the most economically-inefficient options would only reduce growth by four-tenths of a percent.

Study author and MIT Sloan School of Management senior lecturer John Reilly noted that the study's economic analysis was slightly out-of-date, since it was conducted before the passing of President Donald Trump's tax bill.

"It is important to realize that this study was completed before the tax reform that took effect in January that slashed corporate income tax rates. Given that these tax rates have now been cut, and that those cuts will contribute to a growing deficit, we might better consider the revenue as a contribution to closing the deficit," Reilly said in the MIT release.

EcoWatch Daily Newsletter

The Rio San Antonio, in the headwaters basin of the Rio Grande in New Mexico, will lose federal protections under a new rule. Bob Wick / BLM California

By Tara Lohan

The Santa Fe River starts high in the forests of New Mexico's Sangre de Cristo mountains and flows 46 miles to the Rio Grande. Along the way it plays important roles for wildlife, irrigation, recreation and other cultural uses, and provides 40 percent of the water supply for the city of Santa Fe's 85,000 residents.

Read More
Climate activists protest Chase Bank's continued funding of the fossil fuel industry on May 16, 2019 by setting up a tripod-blockade in midtown Manhattan, clogging traffic for over an hour. Michael Nigro / Pacific Press / LightRocket / Getty Images

By Julia Conley

Climate campaigners on Friday expressed hope that policymakers who are stalling on taking decisive climate action would reconsider their stance in light of new warnings from an unlikely source: two economists at J.P. Morgan Chase.

Read More
Sponsored
Protesters holding signs in solidarity with the Wet'suwet'en Nation outside the Canadian Consulate in NYC. The Indigenous Peoples Day NYC Committee (IPDNYC), a coalition of 13 Indigenous Peoples and indigenous-led organizations gathered outside the Canadian Consulate and Permanent Mission to the UN to support the Wet'suwet'en Nation in their opposition to a Coastal GasLink pipeline scheduled to enter their traditional territory in British Columbia, Canada. Erik McGregor / LightRocket / Getty Images

Tensions are continuing to rise in Canada over a controversial pipeline project as protesters enter their 12th day blockading railways, demonstrating on streets and highways, and paralyzing the nation's rail system

Read More
padnpen / iStock / Getty Images

Yet another reason to avoid the typical western diet: eating high-fat, highly processed junk food filled with added sugars can impair brain function and lead to overeating in just one week.

Read More
Horseshoe Bend (seen above) is a horseshoe-shaped meander of the Colorado River in Page, Arizona. didier.camus / Flickr / public domain

Millions of people rely on the Colorado River, but the climate crisis is causing the river to dry up, putting many at risk of "severe water shortages," according to new research, as The Guardian reported.

Read More