by Justin Gundlach
A new working paper from the Sabin Center adds to discussions currently swirling around the prospect of a federal carbon tax. The paper–part of a larger project underway at the Columbia University Center for Global Energy Policy–shines light on a set of practical considerations that other analyses have ignored, namely how existing policies could (and should) feature in negotiations over various parameters of the tax. Would a carbon tax make CAFE standards redundant? What about energy efficiency standards? If not, how do these existing policies relate to a prospective tax, and what might that mean for negotiations toward the tax’s adoption? The paper offers answers to questions like these.
But why discuss this now, given that a carbon tax is at odds with the Trump Administration’s goal of “energy dominance”?
While the Trump Administration has loudly sought to ignore climate change and accelerate the rates of domestic fossil fuel extraction and consumption, a critical mass of U.S. policymakers, researchers, and business leaders has quietly turned its attention to the need to mitigate climate change by pricing carbon dioxide emissions from U.S. sources. Because this constituency’s significance and longevity exceed those of the Trump Administration, it seems that, sooner or later, the federal government will assign a price to carbon dioxide emissions. And because there is no other legally viable way to do so, it seems that such pricing will be enacted via legislation. The contents of that legislation will reflect negotiated agreement—built on various political tradeoffs—over a host of policy issues, ranging from taxes to energy efficiency standards. These tradeoffs would implicate not only the scope and price assigned to carbon, but also the policies with which the pricing scheme would interact.
Against this backdrop, To Negotiate a Carbon Tax: A Rough Map of Policy Interactions, Tradeoffs, and Risks describes interactions between such a price (assumed to take the form of a tax) and various existing and proposed policies relating to climate change, energy, and environmental protection. Specifically, it proposes a typology for those interactions and applies it to characterize particular policies. It also notes how trading off particular policies for a more robust carbon tax could undermine the climate change mitigation goal of such a tax.
