(2028-08-28) The Economic And Emissions Impacts Of The Market Choice Act

Jerry Hinkle, Citizens' Climate Lobby: The economic and emissions impacts of the Market Choice Act. Rep. Carlos Curbelo introduced the Market Choice Act in July 2018.

The purpose of this post is to explore estimates of the economic and emissions impact of the bill

HR 6463 would place a $24/ton tax on CO2 emissions that rises 2% plus the rate of inflation each year. If specified emission reduction thresholds are not met, the tax would rise an additional $2/ton every two years until they are met. The 18 cent/gal. federal gas tax would be eliminated. The bill contains a refund for carbon capture and storage (CCS) as well as well as a border carbon adjustment (BCA)

70% goes to the Highway Trust Fund (adding $285B), 10% to low income recipients, and 5% for coastal flooding mitigation

Just prior to issuing its analysis of the Curbelo bill (Bill), Columbia University’s Global Center for Global Energy Policy (CGEP) coordinated work from a set of modeling groups to issue a much more extensive analysis of the emissions and economic impacts of various revenue neutral carbon tax (RNCT) policies.

Without the carbon tax (the “current policy” scenario), Rhodium estimates that emissions would decline to between 18%-22% (Footnote 1) below these levels by 2025 and to 19%-26% below by 2030. With Curbelo’s Market Choice policy (the “carbon tax” scenario), emission levels would fall further to 27%-32% below by 2025 and by 30%-40% below by 2030. These reductions would meet or exceed the U.S. commitments to the Paris Accord of 26%-28% below 2005 levels by 2025

this estimate includes only U.S. reductions, and that it is likely the passage of a clear U.S. policy to reduce emissions would stimulate further reductions from other major emitters, so that global emission reductions from the policy would be even greater.

More than 2/3 of the reductions come from the power sector. Coal production is reduced 50% by 2030 relative to current policy. Oil production is essentially unchanged

The economic impacts of the policy are minimal, though slightly negative.

climate benefits have been estimated at twice the economic costs (3). Third, health benefits from the reduced emissions are roughly three times economic costs.