Joint Program on the Science
and Policy of Global Change
Massachusetts Institute of Technology
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NBER Working Papers and Publications
|May 2008||Analysis of U.S. Greenhouse Gas Tax Proposals|
with Gilbert E. Metcalf, Sergey Paltsev, John Reilly, Jennifer F. Holak: w13980
The U.S. Congress is considering a set of bills designed to limit the nation's greenhouse gas (GHG) emissions. This paper complements the analysis by Paltsev et al. (2007) of cap-and-trade bills and applies the MIT Emissions Prediction and Policy Analysis (EPPA) model to carry out an analysis of the tax proposals. Several lessons emerge from this analysis. First, a low starting tax rate combined with a low rate of growth in the tax rate will not reduce emissions significantly. Second, the costs of GHG reductions are reduced with the inclusion of non-CO2 gases in the carbon tax scheme. Third, welfare costs of the policies can be affected by the rate of growth of the tax, even after controlling for cumulative emissions. Fourth, a carbon tax -- like any form of carbon pricing -- is regres...
|June 2007||Assessment of U.S. Cap-and-Trade Proposals|
with Sergey Paltsev, John M. Reilly, Angelo C. Gurgel, Gilbert E. Metcalf, Andrei P. Sokolov, Jennifer F. Holak: w13176
The MIT Emissions Prediction and Policy Analysis model is applied to synthetic policies that match key attributes of a set of cap-and-trade proposals being considered by the U.S. Congress in spring 2007. The bills fall into two groups: one specifies emissions reductions of 50% to 80% below 1990 levels by 2050; the other establishes a tightening target for emissions intensity and stipulates a time-path for a "safety valve" limit on the emission price that approximately stabilizes U.S. emissions at the 2008 level. Initial period prices are estimated between $7 and $50 per ton CO2-e with these prices rising by a factor of four by 2050. Welfare costs vary from near zero to less than 0.5% at the start, rising in the most stringent case to near 2% in 2050. If allowances were auctioned these prop...
Published: "An Analysis of U.S. Greenhouse Gas Cap- and-Trade Proposals Us ing a Forward-Looking Economic Model," Environment and Development Economics, 16:2 (2011): 155 - 176 (with Angelo Gurgel, Sergey Paltsev, and John Reilly)