By 2035, Carbon Pricing Could Raise Revenue and Reduce Emissions to 49% of 2005 Levels
A new Resources for the Future issue brief finds that a carbon pricing plan proposed by the Climate Leadership Council would significantly reduce emissions in the energy sector.
New research from Resources for the Future (RFF) projects that a carbon pricing plan from the Climate Leadership Council (CLC) would reduce US energy-related carbon emissions by more than 50% by 2035, relative to 2005 levels. A new issue brief by Marc Hafstead, RFF fellow and director of the RFF Carbon Pricing Initiative, delves into the CLC plan, which would implement a carbon tax that would reach $79/ton and reduce carbon dioxide emissions to 2.93 billion metric tons in 2035.
The Climate Leadership Council’s Carbon Dividends Plan would establish an economy-wide carbon fee starting at $40/ton, which would increase gradually over time. Revenue earned from the carbon tax would be returned to Americans in the form of a dividend—essentially, a rebate.
“Carbon pricing is used all over the world,” Hafstead said. “Most economists agree that a price on carbon is the most cost-effective policy to reduce emissions.”
If the United States emitted 2.93 billion metric tons of carbon dioxide in 2035, the country would be emitting 49% of its 2005 emissions. While the Biden administration has not yet established international goals for the country, emissions reductions of this caliber would likely help meet any aggressive climate targets.
Read the issue brief, "Emissions Projections for the Climate Leadership Council (CLC) Carbon Dividend Plan," by Marc Hafstead, RFF fellow and director of the RFF Carbon Pricing Initiative. For more information on carbon pricing, explore our carbon pricing explainer series and carbon pricing calculator.
Note: This issue brief was financed by the Climate Leadership Council.
Resources for the Future (RFF) is an independent, nonprofit research institution in Washington, DC. Its mission is to improve environmental, energy, and natural resource decisions through impartial economic research and policy engagement. RFF is committed to being the most widely trusted source of research insights and policy solutions leading to a healthy environment and a thriving economy.
Unless otherwise stated, the views expressed here are those of the individual authors and may differ from those of other RFF experts, its officers, or its directors. RFF does not take positions on specific legislative proposals.
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