Purpose
- Investigates the causes of economic imbalances.
- Investigates causes tending to destroy or impair the free-market system.
- Explores and develops market-based solutions.
Summary
Engage in activities and analysis related to carbon pricing policies domestically and internationally.
This project is part of the Brookings Climate and Energy Economics Project and builds on earlier work supported by the Alex C. Walker Foundation. This grant will support work on analyzing carbon pricing policies including research that investigates the design of carbon pricing policies and helping to inform ways to address adverse outcomes of climate polices on vulnerable populations. This specific grant will support engagement, new research and analysis on carbon pricing (especially via a carbon tax) at the state, federal, and international levels, with a focus on pursuing the most timely and useful work as policy developments unfold. The grant can also support opportune work on policies to address particular issues that arise in pricing carbon, such as measures to address competitiveness concerns and ease economic transitions for coal workers and their communities.
Description
Research
One major research project has been the large multi-model study of U.S. carbon tax policies I co-chaired for the Stanford Energy Modeling Forum (EMF). In the fall of 2017, we completed the final round of modeling runs, and I helped coordinate the preparation and peer review of ten papers by individual modeling teams and five crosscutting analyses that synthesize results across the models. For example, there is a paper on distributional results (by income and region) and sector-specific outcomes. The issue includes a non-technical paper with insights for policymakers. I am a co-author on four of those fifteen papers:
- Introduction to the EMF 32 Study on U.S. Carbon Tax Scenarios. (2018) with Fawcett, A., J. McFarland, and J. Weyant (2018). Climate Change Economics, 9(1)
- Overview of economy-wide U.S. carbon tax strategies: Results from EMF 32. (2018) with McFarland, J., A. Fawcett, J. Reilly, and P. Wilcoxen (2018). Climate Change Economics, 9(1)
- Policy insights from the EMF 32 study on U.S. carbon tax scenarios, with A. Barron, A. Fawcett, M. Hafstead, and J. McFarland (2018). Climate Change Economics, 9(1)
- The Role of Border Adjustments in a U.S. Carbon Tax, with W. McKibbin, Wilcoxen P., and W. Liu (2018). The role of border carbon adjustments in a U.S. carbon tax. Climate Change Economics, 9(1)
It was a big lift to get everything done and through peer review. We secured open access to the journal issue so you can read all the papers without a paywall. Here’s a link to the special issue and all the papers from the project: https://www.worldscientific.com/toc/cce/09/01
We are also working on a longer-range project on modeling the Paris climate agreement.
In December, we released our new paper on the linkages between climate change and monetary policy. Here's the link to the paper: https://www.brookings.edu/research/climate-change-and-monetary-policy-dealing-with-disruption/ . In the paper, we argue that the frequency and characteristics of supply shocks that will arise in a disrupted climate, along with the price effects of climate policy, warrant the attention of central bankers and adoption of monetary policy responses that take proper account of these shocks. Likewise, the design of climate policy can make it harder or easier for monetary policy authorities to accommodate. In particular, we argue that from a central banking standpoint, a predictable carbon price trajectory is preferable to the potentially volatile carbon prices in a cap-and-trade program or the opaque price and output effects of a regulatory program.
I presented our monetary policy paper at the World Bank in February, and there and elsewhere the reception has been excellent. It is in submission at a major European journal.
I held a private workshop on the design of border carbon adjustments on February 28, 2018. I am now writing a policy brief that will synthesize my findings on how to make a border carbon adjustment actually work in practice, incorporating the input from the workshop.
With my co-author from AEI, I wrote a blog post suggesting a link between a carbon tax and plugging the deficit created by the tax bill and funding expansion of the Earned Income Tax Credit: https://www.brookings.edu/blog/planetpolicy/2017/12/08/fill-the-gaps-in-the-tax-bill-with-a-carbon-tax-and-expanded-benefits-for-working-families/ Our joint research paper is under review at a journal.
I organized a session on U.S. carbon pricing that was accepted for presentation at the World Congress of Environmental and Resource Economics, to be held in Sweden in June 2018. The paper that my co-author will present is our paper, funded by the Walker Foundation, that compares a tradeable performance standard with a carbon tax. https://www.brookings.edu/research/controlling-carbon-emissions-from-u-s-power-plants-how-a-tradable-performance-standard-compares-to-a-carbon-tax/
Other activities and updates:
I spoke (remotely) at an event at the Hoover Institute in August 2017. I presented some of the findings from our modeling paper on border carbon adjustments from earlier that year. https://www.brookings.edu/research/nobody-knew-border-carbon-adjustments-could-be-so-complicated/
Congressman Larson talked about at our event on November 28. https://larson.house.gov/issues/america-wins-act. Here's the link to the event video: https://www.brookings.edu/events/can-tax-reform-include-a-carbon-tax/
The carbon tax approach discussed when I was in Vermont last year is getting some traction: http://www.benningtonbanner.com/stories/proponents-carbon-tax-would-cut-electric-bills,524452
I spent a fair amount of time talking with reporters, including about coal workers. Here’s an example: http://www.roanoke.com/townnews/economics/virginia-coal-is-rebounding-but-is-donald-trump-to-thank/article_c330c251-9108-536d-8c48-f1c17ec602fa.html
I advised Hill staff on the design of a carbon tax bills.
I advised a campaign advisor to a state gubernatorial candidate on how the candidate could support a carbon tax in the state.
I spoke at the Financial Times Climate Finance Summit in New York City and talked about the critical role of a price on carbon to steer investment. https://live.ft.com/Events/2018/FT-Climate-Finance-Summit
I spoke at an event to comment on a new OECD report on climate policy. https://www.keepeek.com//Digital-Asset-Management/oecd/economics/investing-in-climate-investing-in-growth_9789264273528-en#.WqsHvOjwaUk
I joined the scientific committee for an international carbon pricing research conference. Here's our call for papers: https://www.carbonpricingleadership.org/cplc-research-conference-call-for-papers/
I spoke about my work to a group of aspiring women interested in environmental public policy careers.
My proposal was the Judges’ Choice Winner for the MIT Center for Collective Intelligence Carbon Pricing Policy Proposal Contest in 2018. https://www.climatecolab.org/contests/2017/carbon-
I gave testimony on a state carbon tax bill, Maryland House Bill 939, A Regional Cost Collection Initiative, before the Committee on Economic Matters, Maryland House of Delegates, on March 5, 2018.
Participated in an EPA-led project on the labor market outcomes from environmental policies, including how to model the transitional dynamics as the workforce shifts away from regulated industries. Also, hosted a meeting of agency experts and academics in December 2018. This work is not primarily tied to carbon tax analysis, but it is one potential application.
Concluding work on a modeling study of the Paris Agreement, with and without participation by the United States, China, and Australia. She expects the paper will be released in early January 2019.
Briefed several groups on the recent Energy Modeling Forum results.
Served on the scientific committee for the research conference on carbon pricing that will be hosted by the Carbon Pricing Leadership Coalition in New Delhi next February. We reviewed the abstract proposals and discussed the format and objectives of the conference.
Met several times with members and staffers of Congress from both parties (at their invitation) to talk about carbon tax policy design. Shared extensive research on various aspects of the issue.
Met with staffers state lawmakers about the potential design options for a state-level carbon tax policy.
In June, attended the World Congress of Environmental and Resource Economists, where she chaired the session I organized on U.S. carbon pricing. Her co-author presented their modeling paper that compares a carbon tax with a tradeable performance standard in the U.S. electric power sector.
In June, spoke on a keynote panel at Citizens’ Climate Lobby’s annual convention (Video is here” https://ccl.podbean.com/e/ccl-2018-keynote-panel-climate-solutions-to- benefit-our-environment-economy-and-health/). She also spoke at CCL’s international conference call the next month (video is here: https://www.youtube.com/watch?v=nfOvwjczdMk).
Spoke at a session of the American Agricultural and Applied Economics Association national meetings about state-level climate policy. She argued that state-level policy is no substitute for new federal legislation to price carbon.
In September, moderated a panel session at AEI on the implementation of the Paris accord. The video is available here: http://www.aei.org/events/implementing-the-paris- agreement/.
Participated in several roundtable discussions with academics, NGO stakeholders, corporations, and others.
Spoke at an event on corporate climate-related disclosure and discussed potential carbon price policy scenarios.
Met with carbon fee advocates from coal producing areas in the country to discuss policies to benefit coalfield communities that could be included in legislation.
Met with carbon fee advocates and gave them suggestions on their draft bill.
Spent a significant amount of time talking with the press; a good deal of it on the background of recent developments in climate policy.
Purpose
Our project will directly serve these objectives by engaging in research, analysis, and outreach related to the design and implementation of carbon taxes and other carbon pricing policies in individual states, by the U.S. federal government, and in other countries. It will also explore ways relieve the economic dislocation that results from declines in coal production in the United States. Our work will offer recommendations to guide policymakers on how to move forward with carbon pricing while meeting other goals. We will communicate with policymakers, stakeholders, and the public through our policy briefs, as well as through meetings, presentations, and related research and scholarly publications.
Scope
The research this grant will support will contribute to a series of policy briefs, outreach, and events that are offering insights into the economic effects and environmental potential for a carbon tax in the U.S. and elsewhere. The work is investigating how to link the introduction of a carbon tax with other tax reforms, how to use the revenues to benefit those burdened by a price on carbon, and how to promote international cooperation on carbon pricing. In addition, the initiative has produced new analysis of the regressivity and other distributional effects of greenhouse gas charges, including by region and income class, and specific proposals to address the myriad tradeoffs in designing the policy. Some of the work is synthesizing existing literature, and some work involves new analysis.
Amount Approved$50,000.00
on 10/16/2017
(Check sent: 10/27/2017)
