Analysis: Congressman Curbelo’s Carbon Tax Could Dramatically Lower Greenhouse Gas Emissions
Video: Congressman Curbelo and Jason Bordoff, founding director of the Center on Global Energy Policy, discuss the new legislation. Then a panel examines the energy, economic and emissions effects of the Congressman’s proposal and carbon pricing more broadly.
For the first time in a decade, a Republican lawmaker has proposed legislation that would put a price on carbon dioxide emissions.
The proposal from Florida congressman Carlos Curbelo would tax carbon dioxide emissions starting at $24 per ton of CO2 equivalent in 2020, and would repeal the federal excise taxes on gasoline and diesel fuels. Revenues from the carbon tax would help fund the U.S. transportation system and provide dividends to low-income families, among other uses.
A group that included Columbia’s Center on Global Energy Policy has analyzed how these policy changes would affect the U.S. economy, energy system and emissions, as well as low-income households. Here are some of their key findings:
The Curbelo proposal leads to the following economy-wide net greenhouse gas emissions compared to 2005 levels: 27-32 percent reductions by 2025, and 30-40 percent reductions by 2030. These reductions would outpace the US’s nationally determined contribution to the Paris Agreement of 26-28 percent reductions by 2025.
- Annual federal government revenues increase by $57 billion-$72 billion in 2020 and $63 billion-$106 billion in 2030.
- Natural gas production is 2-3 percent higher in 2020 and 5-8 percent lower in 2030. Crude oil production is not significantly affected, and gasoline and diesel prices increase by less than 10 cents per gallon.
- National average electricity prices are 8 percent higher in 2020 and 5-10 percent higher in 2030.
- Per capita energy expenditures will increase by about $275 in 2020 and by $186–$278 in 2030, in all years remaining more than $1,000 lower than the recent historical peak in 2008.
- National macroeconomic outcomes decline modestly, including reductions in annual gross domestic product of between 0.1 and 0.2 percent in the 2020s. The effects on gross domestic product do not increase over time; they remain at about 0.2 percent.
- The lowest-income households benefit from the Curbelo proposal; the 10 percent of carbon tax revenues are more than sufficient to offset the higher energy prices.