Cap and Trade in China: How Might It Work?

China plans to start a nationwide cap-and-trade market in 2016. But can China, whose economy still contains many nonmarket features, properly design and implement a fundamentally market-based policy? In our new RFF discussion paper, my coauthors (RFF’s Richard Morgenstern, Zhongmin Wang, and Xu Liu) and I attempt to answer this question by examining cap-and-trade pilot […]

Looking at the Effects of a Carbon Tax across States

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The use of revenue from a carbon tax or cap-and-trade program substantially affects who gains and who loses as a result of the policy; indeed, it is often more important than the effect of the carbon tax itself. In a previous RFF discussion paper, we (together with RFF’s Dallas Burtraw and Richard Morgenstern, and Jared […]

How US Gridlock May Handicap Climate Leadership

Next week, world leaders will meet at the United Nations in New York City at the invitation of UN Secretary-General Ban Ki-moon. The purpose of the meeting is to discuss actions the leaders will take to limit their country’s emissions of greenhouse gases in an effort to forestall global climate change. For many, success of […]

Tax Inversions and Carbon Taxes

Because the US has the highest corporate tax rate in the world, firms can save billions of dollars by attaining a new corporate address in a low-tax country without physically relocating any of their existing business. To do so, American firms simply need to acquire a foreign firm and reincorporate the newly formed company abroad. […]

Measuring the Early Effects of a Carbon Tax: Comparing Three Policies across Income Groups

Economists argue that the most efficient way to reduce greenhouse gas emissions is to raise the price of energy by introducing a price on carbon emissions, either through a tax or a cap-and-trade regime. A tax (or a cap-and-trade system that auctions off permits) has a secondary effect beyond providing incentives for reducing emissions: it […]

Energy Efficiency in 111(d): The Role of End-Use Efficiency in State Compliance Plans

In a prior blog post, I describe the contribution of energy efficiency to state emissions-reduction targets in EPA’s Clean Power Plan. As EPA has pointed out, including energy efficiency in states’ targets does not mean that states will necessarily choose to include energy efficiency programs in the compliance plans they submit to EPA. Many factors […]

Comparing the Clean Air Act and a Carbon Price

As readers likely have heard by this point, EPA proposed performance standards for carbon emissions from existing power plants on Monday. This major climate policy move is perhaps most notable in that it happened without new legislation from Congress. Economists have long argued that an economywide carbon price is the most cost-effective way to reduce emissions. This […]

Emissions Trading Isn’t Dead, But It’s Not Out of the Hospital Either

The Supreme Court’s recent decision in EPA v. EME Homer City was a big victory for the agency, substantially (though not completely and finally) clearing the way for  cap-and-trade programs that had been in legal limbo for the better part of a decade.  The DC Circuit decision in the case that SCOTUS overturned prompted me to declare the […]

Mixing and Matching Electricity Sector Policies

A number of concerns have emerged over the last decade about climate change, energy security, and energy efficiency, inspiring an equally long list of proposed policy fixes. The majority of these options, including renewables subsidies, performance standards, and emissions pricing schemes, apply directly to the power sector. Lawmakers can also choose to implement multiple policies […]

Flexibility and Cost-Effectiveness in Proposed Climate Policies

Achieving the goal of an 83 percent reduction in US carbon dioxide (CO2) emissionsfrom 2005 levels by 2050 will require the electricity sector—which accounts for roughly 40 percent of US CO2 emissions—to make an enormous pivot away from fossil fuels toward non-emitting sources. Policy will be required to achieve this goal. In a recent RFF […]