A carbon tax on US electricity generation, if passed, would be the most ambitious carbon pricing regime in the world, according to a new report from the Institute for Policy Studies.
The carbon price would cover the entire electricity system, and the US could pay for the carbon tax with a combination of taxes and other taxes, including a carbon surcharge on cars.
The price would be set by the US government, and it would vary depending on how much the power sector produces.
This would mean that a high price would generate much more carbon emissions than a low price, according the institute’s report, The Carbon Tax: The US’ Carbon Budget.
The institute is also calling on the US to adopt a cap-and-trade system, which would impose a cap on emissions.
“We must address the challenge of climate change before it’s too late,” said James Pethokoukis, a senior fellow at the institute and co-author of the report.
“The carbon budget is one of the largest drivers of US emissions, and we can’t afford to have it fall away.”
A recent analysis of data from the Energy Information Administration found that the US has about 4.5 billion tons of carbon dioxide (CO2) in the atmosphere, which is about two-thirds of what it produced before the Industrial Revolution.
It would be more than twice as much if it reduced its emissions by about 70% by 2030, the institute said.
The US has a long history of trying to reduce its emissions, with a $3.4 trillion carbon tax introduced in 2000 that was eventually repealed.
It was also one of few countries that had a carbon trading scheme for trading emissions credits and credits for carbon-neutral alternatives, according.
The cap- and-trade program was first introduced in the 1990s, but it has been extended by President Barack Obama each year.
The United States has about 100 million people, but less than 1% of them are poor or middle class, according TOI’s World Factbook.
In a report last month, the Economic Policy Institute, a Washington-based think tank, estimated that the cost of an American carbon tax would be about $6.4 billion per year, about $1,500 per person, $1.9 trillion over 20 years, and about $10.4 million per year over 30 years.
The cost of a US carbon tax is estimated at $5.5 trillion annually, according a recent report by the nonpartisan Tax Policy Center.
“A US carbon market could have far greater costs to the economy than the current system,” said Andrew Auerbach, a fellow at George Washington University’s Program on Climate Change and International Development and one of a team of researchers behind the Carbon Tax report.
He added that a carbon market would be less effective at controlling emissions because it wouldn’t directly incentivize businesses to reduce emissions, so businesses would simply decide not to emit.
“They might say they’re not going to invest in that business,” Auerbach said.
“But that doesn’t mean they’re going to be buying less of that product.”
US energy companies have long lobbied for a carbon price.
The American Petroleum Institute, the nation’s largest oil and gas industry lobby, pushed the White House to include a carbon pricing provision in the energy legislation passed in December.
The group pushed hard to include it in the Republican-led House of Representatives budget.
But the Obama administration opposed the measure and instead made a point of pushing for the repeal of the bill, citing it as a “job killer” that would hurt the economy.
The Trump administration, which has been pushing a similar bill, has made several attempts to repeal or revise the legislation.
Last month, Trump announced the creation of the Carbon and Energy Partnership, a bipartisan group that would “work together to advance energy solutions that address the climate challenge and advance American jobs.”