Document Type
Article
Publication Date
2-2018
Publication Title
Climate Change Economics
Abstract
The Stanford Energy Modeling Forum exercise 32 (EMF 32) used 11 different models to assess emissions, energy, and economic outcomes from a plausible range of economy-wide carbon price policies to reduce carbon dioxide (CO2) emissions in the United States. Here we discuss the most policy-relevant results of the study, mindful of the strengths and weaknesses of current models. Across all models, carbon prices lead to significant reductions in CO2 emissions and conventional pollutants, with the vast majority of the reductions occurring in the electricity sector. Importantly, emissions reductions do not significantly depend on the rebate or tax cut used to return revenues to the economy. Expected economic costs, as modeled by either GDP or welfare, are modest, but vary across models. These costs are offset by benefits from avoided climate damages and health benefits from reductions in conventional air pollution. Using revenues to reduce preexisting capital or labor taxes reduces costs in most models relative to lump-sum rebates, but the size of the cost reductions varies significantly. Devoting at least some revenue to household rebates can significantly reduce adverse impacts on low income households. Carbon prices at $25/ton or even lower levels cause significant shifts away from coal as an energy source with responses of other energy sources highly dependent upon technology cost assumptions. Beyond 2030, we conclude that model uncertainties are too large to make quantitative results useful for near-term policy design. We close by describing recommendations for policymakers on interacting with model results in the future.
Keywords
Climate change, model comparison, decarbonization, CGE models
Volume
9
Issue
1
First Page
1840003-1
Last Page
1840003-47
DOI
doi.org/10.1142/S2010007818400031
Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.
Rights
This is an Open Access article published by World Scientific Publishing Company. It is distributed under the terms of the Creative Commons Attribution 4.0 (CC-BY) License. Further distribution of this work is permitted, provided the original work is properly cited.
Version
Version of Record
Recommended Citation
Barron, Alexander R.; Fawcett, Allen A.; Hafstead, Marc A.C.; McFarland, James R.; and Morris, Adele C., "Policy Insights From the EMF 32 Study on U.S. Carbon Tax Scenarios" (2018). Environmental Science and Policy: Faculty Publications, Smith College, Northampton, MA.
https://scholarworks.smith.edu/env_facpubs/1
Supplemental Material
Comments
This discussion paper summarizes results from the Stanford Energy Modeling Forum study on U.S. carbon price scenarios (EMF 32). More detail on any section of this discussion paper and other results of the study appear in the February 2018 special issue of Climate Change Economics. Content is drawn heavily from Alexander R. Barron, Allen A. Fawcett, Marc A. C. Hafstead, James R. McFarland, and Adele C. Morris 2018 Policy Insights from the EMF 32 Study on U.S. Carbon Tax Scenarios Climate Change Economics 9:1 1840003. The authors did not receive financial support from any firm or person for this article or from any firm or person with a financial or political interest in this article. No author is currently an officer, director, or board member of any organization with a financial or political interest in this article.