- Investigates the causes of economic imbalances.
- Investigates the effect of the global financial system and/or the monetary system in fostering a sustainable economy.
- Investigates causes tending to destroy or impair the free-market system.
- Explores and develops market-based solutions.
This grant will help support an initiative by the Brookings Climate and Energy Economics Project on designing a tax on carbon in the U.S. within the context of broader tax reforms and measures to regulate greenhouse gases under the Clean Air Act. The Initiative will further the substantive discussion of climate policy in the United States. Findings will be communicated to policymakers and stakeholders through written policy briefs, private communications, and public events. Brookings scholars will also collaborate with scholars at other academic and policy research institutions to maximize their productivity and impact.
On August 9, 2016, Morris released a report entitled "The Challenge of State Reliance on Revenue from Fossil Fuel Production." (https://www.brookings.edu/wp-content/uploads/2016/08/state-fiscal-implications-of-fossil-fuel-production-0809216-morris.pdf).
The paper argues that states that currently rely on fossil fuel production for a disproportionate share of their revenues are already experiencing sharp declines in revenue and will eventually need to restructure their tax systems. The sooner they prepare for this transition, the easier it will be. The report illustrates the risks to state and local fiscal systems in a section on West Virginia (p. 20) and discusses how the downturn in coal production there has disproportionately hurt coal-producing counties, not just because they lost jobs but also because they relied so heavily on severance taxes on that coal production. This erosion of the tax base compounds the economic damage from workforce reductions. The paper suggests alternative ways to raise revenue in fossil-intensive states, including a carbon tax (p. 23), which is based on fuel consumption levels rather than the value of production, and thus is not a function of volatile prices.
In her public lectures and panel sessions, as well as in private meetings, Morris continues to emphasize the challenges facing coal workers and their communities and the importance of helping them through the transition. For example, at this event at the Center for Strategic and International Studies, Morris emphasizes that one advantage of a carbon tax over regulation is the availability of revenue to help coal workers and coal reliant communities. (https://www.csis.org/events/pathways-us-greenhouse-gas-emissions-reduction-what-options-are-table
This grant will contribute directly to the Walker Foundation’s purposes:
-It investigates policies to address the market failure associated with climate changes.
-It investigates solutions to foster a more sustainable economy, both fiscally and environmentally.
-It explores how to incorporate the costs of environmental damage into prices and economic incentives, an inherently market-based approach, in lieu of command and control pollution regulation.
-It focuses on the communication of the results and findings to policymakers, stakeholders, and the public.
We are pleased to have received support from the Alex C. Walker Foundation for our work exploring a variety of issues surrounding the design and implementation of a carbon tax.
This grant will support activities that are offering insights into the economic effects and environmental potential for a carbon tax in the U.S. In particular, it will support analysis and outreach related to how existing market trends and environmental policies can harm workers and communities reliant on the coal industry.
Objectives of this work include providing information to policymakers on: (1) the depth and breadth of projected declines in U.S. coal production and the adverse outcomes for workers and coalfield communities; (2) the implications for state and local governments that rely on coal-related revenue; (3) how a carbon tax could provide the resources necessary to help coal economy areas transition, including via retirement benefits, mine reclamation, job training, economic diversification and community redevelopment , and infrastructure investment.
(Check sent: 6/7/2016)