From: Brookings Events

To: Bonaiuto, MatthewDisabled

Subject: Brookings Event - Campaign 2012: Climate Change and Energy

Date: Monday, June 04, 2012 12:54:29 PM

Campaign 2012: Climate Change and Energy

Monday, June 11, 2012, 10:00 — 11:30 am

The Brookings Institution, Falk Auditorium, 1775 Massachusetts Ave, NW, Washington, DC

As the struggling economy and demand for jobs consume the American public’s attention, climate policy

has become a second-tier political issue. Although most economists advocate for putting a price on

greenhouse gases through a carbon tax or cap-and-trade program, there is little political appetite to do

so. Will the next president be able to make climate and energy policy a national priority, perhaps as a

component of fiscal reform, or will he seek alternative energy policies? In the context of increasing

global energy needs, how can the United States ensure its energy independence?

On June 11, the Campaign 2012 project at Brookings will hold a discussion on climate change and

energy, the seventh in a series of forums that will identify and address the 12 most critical issues facing

the next president. Darren Samuelsohn of POLITICO will moderate a panel discussion with Brookings

experts Ted Gayer, Katherine Sierra and Charles Ebinger, who will present recommendations to the next

president.

After the program, panelists will take questions from the audience. Participants may follow the

conversation on Twitter using the hashtag #BIClimate.

Panelists

 

Moderator: Darren Samuelsohn

Senior Energy and Environment Reporter

POLITICO Pro

 

Katherine Sierra

Senior Fellow, Global Economy and Development

 

Ted Gayer

Senior Fellow and Co-Director, Economic Studies

 

Charles Ebinger

Senior Fellow and Director, Energy Security Initiative

 

To RSVP for this event, please call the Office of Communications at 202.797.6105 or click here

(http://www.cvent.com/d/1cqq7h/4W).

If you no longer want to receive emails from Brookings Events please

http://www.cvent.com/d/VNh48bDl8EuxY8D6h490uQ/67z2/E1/8D.

Powered by Cvent

2012-08-054_000000000001025
From: Metcalf, Gilbert

To: "cmclure@stanford.edu"

Subject: GATT/Carbon Tax

Date: Monday, April 16, 2012 8:32:00 AM

Charlie,

I’m not surprised at all. I asked you to write the paper for my book because I thought you were

the perfect person for the topic given your background. Glad you’ve been able to parlay this into a

deeper research agenda.

Best,

Gib

Gilbert E. Metcalf

Deputy Assistant Secretary for Environment and Energy

U.S. Department of the Treasury

(202) 622-0173 (office)

(202) 316-8028 (mobile)

(202) 622-0037 (fax)

Email: gilbert.metcalf@treasury.gov

From: Charles E McLure Jr [mailto:cmclure@stanford.edu]

Sent: Friday, April 13, 2012 6:48 PM

To: Metcalf, Gilbert E.

Subject: FYI and thanks

Gib:

I recently published an article with the

first two words in its title: "A Primer on the Legality of Border

Adjustments for Carbon Prices: Through a GATT Darkly," Carbon & Climate

Law Review, Vol. 5, No. 4 (2011), pp. 456-65. The primer is the very much

condensed version of the paper that grew out of my work of the

conference, "The GATT Legality of Border Tax Adjustments for Carbon Taxes

and the Cost of Emissions Permits: a Riddle Wrapped in a Mystery Inside

an Enigma," Florida Tax Law Review, vol. 11, No. 4 (2011), pp. 221-294.

Thanks for getting me involved in this fascinating topic. It has been a

welcome change .

I am in the early stages of research on subnational (state and

provincial) actions to price carbon, their coordination, and ways that

destination-based subnational carbon pricing could be achieved.

You need not respond. I understand how busy you must be.

Not Responsive

Not Responsive

2012-08-054_000000000001026
Charlie

2012-08-054_000000000001027
From: Leslie (Geothermal Energy Association)

To: Demopulos, Abigail

Subject: GEA"s newsletter ~ Geothermal Energy Weekly

Date: Thursday, September 13, 2012 3:41:37 PM

Having trouble viewing this email? Click here

GEA's newsletter ~

Geothermal Energy Weekly

Dear GEA Members and Friends,

The new issue of GEA's newsletter ~ Geothermal

Energy Weekly is available now.. follow this link!

Geothermal

Energy

Weekly

September 13

2012

This week's headlines, opportunities

National News 4

PTC Proponents See Small Window for Vote During 'Wind Week'

Carbon Tax a Weak Sub for Energy Incentives, Says Report

AFP, Others Step up Wind PTC Opposition

2012-08-054_000000000001028
Company News 5

Calpine Corp.: Geysers Geothermal Visitors Center Reopens

EnergySource and Simbol Materials: Commission Supports

Hudson Ranch II Geothermal

GEA: "Geothermal Basics Q&A" Released in Advance of Annual

Expo

RE & Climate Change 9

NREL Releases New Geothermal Feed-In Tariff Report

Wind Association Drops Utility over Tax Incentive

State News 10

Alaska: Report Summarizes Regional Potential for Geothermal

California: Geothermal Regulatory Streamlining Bill by Pérez

Signed into Law

California: EPA Unveils Mapping Tool for Developing Renewable

Energy Sources

Texas: Petition Says PUC Mandated to Reach RPS Targets

International News 14

Europe

Germany: In 2011, $30 Million Helped Geothermal Research

Geothermal Energy Association September 13, 2012

Ukraine: Geothermal Facility Announced in Ivano-Frankivsk

Americas

Costa Rica: State Utility Promotes Geothermal

Asia & the Pacific

Australia: Habanero 4 Drilling Complete; Stimulation and

Geothermal Testing to Start

Philippines and Chile: Geothermal Energy Partnership Possible as

PSALM Looks to Bid Out Unified Leyte

Philippines: Basic Energy Geothermal Deals Approved

Notices 17

New This Week

Comments Invited, 2012 Independent Science Panel Draft Report

(due Sept. 24)

Featured Notices

Kenya: GeoSteam Services Ltd seeks U.S. Companies for

Providing Geo-Related Goods/Services

U.S. Army Energy Initiatives Task Force (EITF) Creates New

LinkedIn Subgroup for Geothermal Sector

GEA-USAID Initiative: East Africa Geothermal Energy Program

Calif. Cleantech Trade Mission to China Seeks Geothermal

2012-08-054_000000000001029
Participants (due Sept. 28)

USTR Seeks Comment on Foreign Trade Barriers, Annual National

Trade Estimate Report (due Oct. 15)

U.S. Embassy Promoting Businesses at Cape Verde International

Fair 2012, Praia, Cape Verde (Nov. 14-18)

Requests for Proposals 23

Featured RFPs

Renewable Energy PPA, City of Palo Alto (Sept. 19)

Bid Announced for Geothermal Exploration in Neuquén, Argentina

RE Generation, Southwestern Public Service Company (Oct. 1)

Army Announces $7 Billion Action to Support Renewable Energy

(Oct. 5)

RE Projects, Southern California Public Power Authority (Nov. 30)

Events 25

Geothermal Energy Association September 13, 2012

New This Week

Renewable Energy Opportunities in Indonesia, Washington DC

(Sept. 19)

Geothermal Talk, Hawai'i Volcanoes National Park (Sept. 25)

GEA and GEA-Sponsored Events

GEA Geothermal Energy Expo® and GRC Annual Meeting, Reno

NV (Sept. 30-Oct. 2)

Renewable Energy World Conference & Expo North America (colocated with Power-Gen International), Orlando, Fla. (Dec. 11-13)

Featured Events

20th Annual Congress of the AGM and 1st Latin-American

Geothermal Congress, Mich., Mexico (Sept. 26-28)

Geothermal Workshop, Society of Petroleum Engineers, Philippines

(Oct. 21-24)

34th New Zealand Geothermal Workshop, Aotea Centre, Auckland

(Nov. 19-21)

4th African Rift Geothermal Conference, Nairobi (Nov. 21-23)

Geothermal Energy Utilization Associated with Oil & Gas

Development, Southern Methodist University, Dallas, Texas (March

12-14, 2013)

Subscribe to Geothermal Energy Weekly...

2012-08-054_000000000001030
Visit GEA's Web site

Forward this email

This email was sent to abigail.demopulos@do.treas.gov by leslie@geo-energy.org | 

Update Profile/Email Address | Instant removal with SafeUnsubscribeTM | Privacy Policy.

gea | 209 Pennsylvania Ave., SE | Washington | DC | 20003

2012-08-054_000000000001031
From: Metcalf, Gilbert

To: Jaffe, Judson; Hall, Daniel

Cc: Urbanas, Elizabeth (Beth); Demopulos, Abigail

Subject: Korea cap and trade

Date: Friday, May 04, 2012 8:55:00 AM

Jud or Daniel,

Have you seen any details about this new scheme?

South Korea joins nations preparing

cap-and-trade markets

Lisa Friedman, E&E reporter

Published: Friday, May 4, 2012

Senate Foreign Relations Chairman John Kerry (D-Mass.) yesterday hailed South Korea for approving

an economywide carbon market as part of a broad government attack on climate change.

Under the measure, approved 148-0 with three abstentions, Korea's cap-and-trade system will take

effect by 2015. The National Assembly vote comes on the heels of sweeping new climate legislation in

Mexico and marks Korea as one of a growing number of nations making good on pledges to cut

greenhouse gas emissions.

"What else is new?" Kerry said in a statement to ClimateWire. "South Korea just joins China, New

Zealand, Mexico, Australia and the European Union in seizing the economic rewards of a sustainable

economy by putting a price on carbon. The big question is why we're among the outliers.

"It's negligent for Congress to continue ignoring and obstructing when other countries realize they're

getting an economic boost out of leading the way," Kerry said.

Environmental activists echoed Kerry's comments. Several said Korea's decision -- made after intense,

months-long negotiations with business and industry lobbies, underscores America's absence from the

clean-energy race.

"This is definitely a significant development in global climate policy," said Jennifer Haverkamp,

international climate director for the Environmental Defense Fund.

"It's not only the first Asian country to go forward and embrace comprehensive climate law, but it's also

a fast-growing economy that's basically just graduated from developing to developed country status,

and they're looking to the future and very consciously ... decided to benefit from low-carbon economy

of the future," she said.

Market linkage could be next step

Keya Chatterjee, director of international climate change policy for the World Wildlife Fund, said: "This

is a race, and we're clearly losing." Korea's vote, she said, puts new pressure on the United States to

"get together the courage to move" into emissions trading.

But Lee Lane, a visiting scholar at the conservative Hudson Institute, said he is comfortable seeing

America's economic competitors take the lead. "If those countries want to substitute more expensive

energy for less expensive industry in their own industries, the United States gains competitively from

that. So as far as I'm concerned, it's just fine from the standpoint of U.S. national interests," he said.

"The farther behind we fall, the better off we are in this particular race."

Moreover, Lane argued, until countries like China and India impose full carbon markets, incremental

moves by various countries do not add up to enough to curb global emissions.

China currently has several pilot carbon trading programs under way. Speaking in New York earlier this

year, the country's top climate negotiator said those could eventually become a nationwide carbon

market.

Korea's market, meanwhile, could be linked with Australia, New Zealand and the European Union's

markets by 2020, analysts said. Under the program, companies, factories and farms that emit 125,000

metric tons or more of carbon dioxide annually will be subject to the trading system. Over the coming

months, Haverkamp said, the government will hammer out the regulations putting the law into action.

She said the new moves by countries like Australia, Mexico and Korea could have a material impact

2012-08-054_000000000001032
on the global climate talks.

"It's extremely interesting that it's a suite of mid-sized countries who have decided that they're not going

to wait around," she said. "The more countries that do it, I think, gives more encouragement to others

that it is in their national self-interest to go forward."

Gilbert E. Metcalf

Deputy Assistant Secretary for Environment and Energy

U.S. Department of the Treasury

(202) 622-0173 (office)

(202) 316-8028 (mobile)

(202) 622-0037 (fax)

Email: gilbert.metcalf@treasury.gov

2012-08-054_000000000001033
From: Schmidt, Jake

To: Schmidt, Jake

Subject: New Updates: Global Warming Happening in the US; US & India Climate Actions; HFCs; deforestation, aviation & global

emissions trends

Date: Tuesday, August 07, 2012 9:07:06 AM

Here are some NRDC blog posts and other material that I thought you would find interesting (click on the link

in intro paragraphs to go directly to that topic). I've sprinkled in a bit of news from other sources that I found

interesting and that wasn't covered in an NRDC blog post. Heat waves, drought, wildfires, freak storms, and

more extreme weather is hitting the U.S. as we speak so NRDC has a number of posts connecting the dots

between extreme weather and climate change (including a new

website<http://www.nrdc.org/globalwarming/climate-change-impacts/> with one stop information on US

extreme weather and a new video).

Some things are happening in India with a massive blackout serving as a wake-up call of the need for more

action on clean energy, Indian solar PV passing the 1 GW benchmark, and India rolling ahead with its massive

solar efforts. Plus NRDC and our partner in India released an evaluation of the solar mission to date.

Some news of note coming out of the U.S. including signs that reaching the U.S. target is within reach and

major sports in the U.S. are taking steps to green themselves. Plus some news on efforts to phase-down

HFCs under the Montreal Protocol, progress in combating deforestation, the ongoing saga of aviation's

contribution to global warming, and the current trend of global emissions.

Let me know if you would like to be removed from this distribution or know of someone that wants to be

added. Best regards, Jake

Connecting the Dots on Climate Change

Here are some posts on the current state of play and the connections between extreme weather and climate

change. In addition, James Hansen and colleagues have a new study which documents that climate change is

here and worse than we thought.

· Connecting the Dots on Climate Change:

http://switchboard.nrdc.org/blogs/fbeinecke/connecting_the_dots_on_climate.html

· Op-Ed from James Hansen on his new study: Climate change is here - and worse than we thought:

http://wapo.st/Nfw9eu

· This is What Global Warming Looks Like - 2012 Edition:

http://switchboard.nrdc.org/blogs/dlashof/this_is_what_global_warming_lo_2.html

· New News on Extreme Weather and Global Warming, This Game is Getting Old:

http://switchboard.nrdc.org/blogs/tspencer/new_news_on_extreme_weather_an.html

· Intense Storms Are Battering Towns and Revealing Destructive Power of Climate Change:

http://switchboard.nrdc.org/blogs/fbeinecke/intense_storms_are_battering_t.html

· Major Businesses Prepare to Deal with Climate Change:

http://switchboard.nrdc.org/blogs/plehner/major businesses prepare to de.html

· Another Record-breaking Drought: A Sign of Things to Come?:

http://switchboard.nrdc.org/blogs/bchou/another record-breaking drough.html

· Drought Grips Nation and Shows What Climate Change Does to Our Communities:

http://switchboard.nrdc.org/blogs/fbeinecke/drought_grips_nation_and_shows.html

· Extreme weather: Preview or feature, no one wants to see the full climate change show:

http://switchboard.nrdc.org/blogs/sclefkowitz/extreme_weather_preview_or_fea.html

· July Heat Records Crush Cold Records By 17 To 1, 'Historic Heat Wave And Drought' Fuels Oklahoma

Fires: http://thinkprogress.org/climate/2012/08/05/641501/july-heat-records-crush-cold-records-historic-heatwave-and-drought-fuels-oklahoma-fires/

2012-08-054_000000000001034
* NRDC Website on Extreme Weather & Climate Change: http://www.nrdc.org/globalwarming/climate-changeimpacts/

* New paper (Hansen et al) documenting the connection between current extreme weather and climate

change: http://www.nasa.gov/topics/earth/features/warming-links.html

India Climate Actions: the Blackout, Energy Efficiency & Solar

Here are some posts on the wake-up call for clean energy provided by the massive blackout in India, Indian

actions on energy efficiency, and progress on solar.

· India's Blackout: A Wake-Up Call to Energize Clean Energy Solutions:

http://switchboard.nrdc.org/blogs/ajaiswal/indias_blackout_a_wake-up_call.html

· Clean Energy Alternatives Could Help India Avoid Another Blackout:

http://switchboard.nrdc.org/blogs/abatra/clean_energy_alternatives_coul.html

· Making an Invisible Resource Visible: Energy Efficiency Animation Video from India:

http://switchboard.nrdc.org/blogs/rkhosla/making_an_invisible_resource_v.html

· Survey of State Solar Projects Reveals Immense Opportunity for Solar Energy in Rural India:

http://switchboard.nrdc.org/blogs/abatra/survey_of_state_solar_projects.html

* NRDC and CEEW (India) evaluation of India's solar mission-- Laying the Foundation for a Bright Future:

http://www.nrdc.org/international/india/national-solar-mission-ph1.asp

US Climate Actions

Below are some posts on where U.S. emissions are headed, the efforts of the U.S. Navy to get 50% of their

energy from renewable sources by 2020, state of play on the U.S. requirements for the amount of carbon

pollution from new vehicles, California renewable, and more.

· Closer Than You Think: Downward Trend in U.S. CO2 Emissions Puts Target Within Reach:

http://switchboard.nrdc.org/blogs/dlashof/closer_than_you_think_downward.html

· The Incredible Shrinking Carbon Pollution Forecast - Part 2:

http://switchboard.nrdc.org/blogs/dlashof/the_incredible_shrinking_carbo_1.html

· Navy Launches Great Green Fleet, Powered by Biofuels::

http://switchboard.nrdc.org/blogs/plehner/navy_launches_great_green_flee.html

· Obama Administration Set to Finalize Historic Fuel Efficiency Standards, Saving Consumers $1.7 Trillion:

http://switchboard.nrdc.org/blogs/plehner/obama administration set to fi.html

· California Utilities Exceed Renewable Power Goals:

http://switchboard.nrdc.org/blogs/pmiller/california utilities exceed re.html

· Obama Administration Releases Final Solar Energy Program:

http://switchboard.nrdc.org/blogs/hoshea/obama administration releases.html

· Sports Teams to Share Green Success Stories at the White House:

http://switchboard.nrdc.org/blogs/plehner/sports_teams_to_share_green_su.html

* NRDC Issue Brief-- Closer than You Think: Latest U.S. CO2 Pollution Data and Forecasts Show Target

Within Reach: http://www.nrdc.org/globalwarming/files/closer-than-you-think-IB.pdf

Phasing Down HFCs - one of the "Super Greenhouse Gases"

In Rio countries agreed to phase-down HFCs so on month later did they make progress to phase-down this

super greenhouse gas under the Montreal Protocol?

· Phasing-Down HFCs: Commitments in Rio Hit the Wall in Bangkok One Month Later:

http://switchboard.nrdc.org/blogs/ddoniger/phasing-down_hfcs_commitments.html

· "Super Greenhouse Gas" Update: Will China and India Help Curb HFCs, Or Stand in the Way?:

http://switchboard.nrdc.org/blogs/ddoniger/super greenhouse gas update wi.html

· India's Role in Phasing Down Hydrofluorocarbons - Moving From Laggard to Leader?:

2012-08-054_000000000001035
http://switchboard.nrdc.org/blogs/ajaiswal/indias_role_in_phasing_down_hy.html

Deforestation - Illegal Logging & Brazil Progress

In 2008, the U.S. amended an existing law to require that all wood and wood products coming into the U.S.

be derived from legal sources. This critical tool in helping to combat deforestation has come under recent

attack, but so far we have successfully beaten back a U.S. House effort to gut this critical law. In addition,

Brazil released some data on its deforestation emissions which continues to show a downward trend.

· Gibson Guitar Agrees to Resolve Investigation into Lacey Act Violations:

http://www.justice.gov/opa/pr/2012/August/12-enrd-976.html

· Businesses are Opposed to Efforts to Undermine the Lacey Act: They don't want to compete against

illegal loggers http://switchboard.nrdc.org/blogs/jschmidt/businesses are opposed to effo.html

· Dave Matthews Band on Deforestation: We need to keep the Lacey Act in place and reject efforts to

gut this critical law: http://switchboard.nrdc.org/blogs/jschmidt/dave_matthews_band_on_deforest.html

· Brazil's deforestation rate still on decline in 2012?: http://news.mongabay.com/2012/0802-brazil-deter2012.html

Aviation

Here are some posts on the ongoing saga of countries, airlines, and Members of the U.S. Congress that are

trying to undercut the EU's program to reduce the carbon pollution from aviation. Everyone claims to want a

global solution, so is the timing ripe to make progress on a mandatory system to reduce the total amount of

carbon pollution from aviation after 15 years of ICAO failure?

· NGOs urge Obama not to undermine ICAO efforts: http://www.reuters.com/article/2012/08/06/usobama-icao-idUSBRE87509Z20120806

· The EU should stand firm on its scheme to limit aviation emissions: http://bit.ly/QKG5jT

· U.S. Fight Against E.U. Airline Emissions Plan Heats Up: http://nyti.ms/NwhKtm

· Senate committee approves short-sighted bill that could jeopardize action on airplane pollution:

http://blogs.edf.org/climatetalks/2012/07/31/senate-committee-approves-short-sighted-aviation-pollution-bill/

· Countries opposed to EU carbon charge for airlines fail to find an alternative:

http://www.guardian.co.uk/environment/2012/aug/02/eu-carbon-tax-airlines?newsfeed=true

* Chair's Summary of the 17 nation "coalition of the unwilling" meeting in DC:

http://images.politico.com/global/2012/08/120801_waesummary.pdf

Current Trend of Global Emissions

In case you missed it, a new report was recently released which showed the trend of global CO2 emissions

(without deforestation) and details on many key countries. I won't comment on the specifics as I'll let the

facts in the report speak for themselves. Here is the report:

· Trends in global CO2 emissions: 2012 report:

http://www.pbl.nl/sites/default/files/cms/publicaties/PBL_2012_Trends_in_global_CO2_emissions_500114022.pdf

_________________

Jake Schmidt

International Climate Policy Director

Natural Resources Defense Council (NRDC)

NEW LOCATION: 1152 15th St, NW, Suite 300

Washington, DC 20005

Work: 1-202-289-

Mobile: 1-202-

Email: @nrdc.org<mailto @nrdc.org>

Read my blog: http://switchboard.nrdc.org/blogs/jschmidt/

Follow me on twitter: jschmidtnrdc

Track countries actions to reduce emissions: http://www.nrdc.org/international/copenhagenaccords/

(b) (6) (b) (6) (b) 

(6)

(b) (6)

2012-08-054_000000000001036
2012-08-054_000000000001037
From: Metcalf, Gilbert

To: "Ravi Gupta"

Subject: RE: carbon tax regressivity - World bank consultant. Exploring further research

Date: Friday, February 24, 2012 9:16:00 AM

How about 10:30 (EST) on Tuesday. You can reach me on my office line.

Gilbert E. Metcalf

Deputy Assistant Secretary for Environment and Energy

U.S. Department of the Treasury

(202) 622-0173 (office)

(202) 316-8028 (mobile)

(202) 622-0037 (fax)

Email: gilbert.metcalf@treasury.gov

-----Original Message-----

From: Ravi Gupta [ @gmail.com]

Sent: Thursday, February 23, 2012 7:09 PM

To: Metcalf, Gilbert

Subject: RE: carbon tax regressivity - World bank consultant. Exploring further research

Thanks for your note, Sir. Tuesday would be ideal. What time works for you.

I am in Chicago ie one hour behind you. Give me a specific time and I will

note my calendar. Also, I understand (202) 622-0173 (office) or (202)

316-8028 (mobile) are good numbers to reach you.

Sincerely,

Ravi Gupta

http://www.linkedin.com

Cell:

Skype:

-----Original Message-----

From: Gilbert.Metcalf@treasury.gov [mailto:Gilbert.Metcalf@treasury.gov]

Sent: Thursday, February 23, 2012 2:54 PM

To @gmail.com

Subject: FW: carbon tax regressivity - World bank consultant. Exploring

further research

Ravi,

I read your paper and would be happy to talk about it with you. Maybe on

Tuesday or Wednesday of next week?

Best,

Gib

Gilbert E. Metcalf

Deputy Assistant Secretary for Environment and Energy U.S. Department of the

Treasury

(202) 622-0173 (office)

(202) 316-8028 (mobile)

(202) 622-0037 (fax)

(b) (6) (b) (6) (b) (6) (b) (6) (b) (6)

2012-08-054_000000000001038
Email: gilbert.metcalf@treasury.gov

-----Original Message-----

From: Metcalf, Gilbert E. [mailto:Gilbert.Metcalf@tufts.edu]

Sent: Wednesday, January 18, 2012 10:19 AM

To: Metcalf, Gilbert

Subject: FW: carbon tax regressivity - World bank consultant. Exploring

further research

_______________ ________

From: Ravi Gupta @gmail.com]

Sent: Wednesday, January 18, 2012 9:21 AM

To: Metcalf, Gilbert E.

Subject: RE: carbon tax regressivity - World bank consultant. Exploring

further research

Thanks for your note. <<...>>

I am sending the paper I wrote. Please note that the paper was written as a

term paper during grad school.

The report was written under the guidelines and using the style that Prof

 wanted, and not for any publication(external audience). The purpose

was gaining an understanding of a subject (carbon taxes regressivity) and

performing original computations and research. 

NR

Not Responsive

Not Responsive

(b) (6)

Not Responsive (NR)

NR

2012-08-054_000000000001039
Hence I wish to speak to you, and take it from there. I am also trying to

get in touch with other think tanks and private organizations.

The objective of my conversation with you would be:

1. potentially explore working further on the paper 2. Discuss other

possible research engagements on carbon finance where you believe my

research on carbon taxes could be helpful.

Let me know if you need any more information.

Sincerely,

Ravi Gupta

http://www.linkedin.com/

Cell:

Skype:

-----Original Message-----

From: Metcalf, Gilbert E. [mailto:Gilbert.Metcalf@tufts.edu]

Sent: Wednesday, January 18, 2012 7:32 AM

To: Ravi Gupta

Subject: RE: carbon tax regressivity - World bank consultant. Exploring

further research

Ravi,

I'm on leave from Tufts at US Treasury but would enjoy seeing your paper.

Could you send a copy. Happy to talk after taking a look.

Best,

Gib

________________________________

From: Ravi Gupta @gmail.com]

Sent: Tuesday, January 17, 2012 6:51 PM

To: Metcalf, Gilbert E.

Subject: carbon tax regressivity - World bank consultant. Exploring further

research

Hello Prof Metcalf,

Hope you are doing well. I am a consultant at the world bank. I am writing

to explore if you would find some of my work on regressivity of carbon

taxes, relevant to your current research.

NR NRNR

NR

(b) (6)

2012-08-054_000000000001040
I have conducted some research on carbon tax regressivity in the US based on

RECS data ( the first such study as other studies have used CEX data) and

have come up with some interesting findings. The study was done as part of

coursework to get credit for my graduate degree ie I haven't ( yet ) worked

for its publication.

Below a synopsis of my study . if you find it interesting and relevant to

your research, maybe we should talk.

Thanks.

********************Synopsis of carbon tax regressivity

research******************

A.M. (PUBLIC POLICY) PROJECT AT THE UNIVERSITY OF CHICAGO

Mar '11 - May '11 , Regressivity and geographical variation of carbon

taxes using RECS data, Chicago, IL

Researched the regressivity and geographical variation of carbon taxes using

the Suits index and RECS (Residential Energy Consumption Survey) data. The

study investigated the impact of different policy prescriptions (cap and

dividend, EITC, heating assistance etc) to ameliorate regressivity of carbon

taxes. The paper consisted of two parts. The first was actual computations

of regressivity using RECS data; this part covered many policy alternatives

covered by the Burtraw Sweeney and Walls (BSW) paper "The Incidence of

U.S.Climate Policy Where You Stand Depends on Where You Sit". The second

part was literature critique of various papers on topics related to carbon

taxation regressivity. The BSW paper was based on CEX (Consumer Expenditure)

data. For my study, the RECS data was used. Till date there is no published

study on carbon tax regressivity using RECS data. In fact the RECS data to

my knowledge has not been used in any study related to energy or carbon

taxes.

The paper:

* Provided a comprehensive understanding of various techniques,

methods and data sets used to study the regressivity of carbon taxes and

related policy issues.

* Developed an understanding of prominent issues related to carbon tax

regressivity and investigating those issues using RECS data.

* Developed a comprehensive list of policy alternatives for carbon

taxation (such as the EU emissions scheme which excludes transportation and

fuel used for heating) and policies to equitably distribute the revenues

obtained from taxation.

* Investigated the tradeoff between efficiency and regressivity under

different taxation regimes.

* Compared and contrasted various policy alternatives depending of

criteria such as regressivity, ease of administration etc.

* Provided insights into issues related to overall tax burden

regressivity, and amelioration policies that would be least distortionary.

2012-08-054_000000000001041
*********************end of

synopsis********************************************************

Sincerely,

Ravi Gupta

http://www.linkedin.com/

Cell:

Skype:

(b) (6) (b) (6) (b) (6)

2012-08-054_000000000001042
From: Metcalf, Gilbert

To: Jaffe, Judson

Subject: legislation

Date: Thursday, August 02, 2012 10:46:19 AM

Can you get a copy of this?

McDERMOTT TO INTRO CARBON TAX LEGISLATION: Rep. Jim McDermott (D-Wash.) will

introduce a bill today to create a carbon tax that he says will create incentives for long-term

changes in the U.S. energy market without harming the economy, and in fact, providing much

needed revenues. McDermott: In politics, "you plant seeds. You put ideas out there and you let

people think about" it, he said. "If someone has a better idea, I'm willing to consider it. I think that

when we come back in January, we talk about tax reform, I don't want it to be thrown on the

table" at the last minute. "So I'm putting it out there as a think-piece.'

Gilbert E. Metcalf

Deputy Assistant Secretary for Environment and Energy

U.S. Department of the Treasury

(202) 622-0173 (office)

(202) 316-8028 (mobile)

(202) 622-0037 (fax)

Email: gilbert.metcalf@treasury.gov

2012-08-054_000000000001043
From: Metcalf, Gilbert

To: "Reid Capalino"

Subject: RE: Career Inquiry

Date: Monday, July 16, 2012 1:31:00 PM

Reid,

Good to hear from you.

Best,

Gib

Gilbert E. Metcalf

Deputy Assistant Secretary for Environment and Energy

U.S. Department of the Treasury

(202) 622-0173 (office)

(202) 316-8028 (mobile)

(202) 622-0037 (fax)

Email: gilbert.metcalf@treasury.gov

-----Original Message-----

From: Reid Capalino [mailto: @db.com]

Sent: Monday, July 16, 2012 1:18 PM

To: Metcalf, Gilbert

Subject: Career Inquiry

Classification: Public

Gib,

Best,

Reid Capalino

P.S. I trust you saw last week's pro-carbon tax NYT op-ed from my fellow Reed College alum Yoram

Bauman? In case not, you can read here:

http://www.nytimes.com/2012/07/05/opinion/a-carbon-tax-sensible-for-all.html?_r=1

(b) (6)

NR

NR

NR

2012-08-054_000000000001044
Reid Capalino

Analyst

Deutsche Bank AG, Filiale New York

DB Climate Change Advisors

345 Park Avenue, 10154-0004 New York, NY, USA

Tel. 

Fax +1(212)454-9925

Mobile 

Email @db.com

---

This communication may contain confidential and/or privileged information.

If you are not the intended recipient (or have received this communication

in error) please notify the sender immediately and destroy this

communication. Any unauthorized copying, disclosure or distribution of the

material in this communication is strictly forbidden.

Deutsche Bank does not render legal or tax advice, and the information

contained in this communication should not be regarded as such.

(b) (6) (b) (6) (b) (6)

NR

2012-08-054_000000000001045
From: Metcalf, Gilbert

To: Jaffe, Judson

Cc: Hall, Daniel

Subject: new CRS report

Date: Wednesday, September 26, 2012 1:34:22 PM

Have you seen this report? Could you track down and forward me a copy. Thanks.

Carbon tax would halve deficit in 10

years -- report

Jean Chemnick, E&E reporter

Published: Wednesday, September 26, 2012

A report by the nonpartisan Congressional Research Service circulated yesterday evening backed up supporters'

claim that pricing carbon could be a powerful tool for reining in the federal deficit.

The CRS report found that Congress could cut the federal deficit in half in 10 years by enacting a $20 per metric

ton carbon tax that rises 5.6 percent annually -- slashing the deficit from $2.3 trillion down to $1.1 trillion.

The Obama administration has estimated that each ton of CO2 carries a social cost of $21 per metric ton. CRS

spokeswoman Janine D'Addario said the Library of Congress-based research office could not disclose what

member of Congress requested the report.

The idea of a carbon tax has enjoyed a modest resurgence this year, as lawmakers and policy analysts hunt for

ways to rein in debt in the long term and stave off automatic cuts to domestic and military spending that are set

to take effect in January.

A carbon tax has also been raised as a possible way to finance cuts to capital and labor taxes, an idea that has

attracted some interest from center-right groups as well as environmentalists and liberals. The American

Enterprise Institute and R Street Institute joined representatives from Public Citizen, Taxpayers for Common

Sense and others for preliminary talks about a carbon tax this summer (Greenwire, July 11).

And the idea enjoys some support among former GOP lawmakers and policymakers. Former Rep. Bob Inglis (RS.C.) has launched a public relations campaign to drum up support for a tax swap that includes a carbon tax

(Greenwire, July 10), and several advisers to GOP presidential nominee Mitt Romney have supported the idea in

the past (ClimateWire, Sept. 18).

But most current members of Congress on both sides of the aisle are reluctant to discuss carbon taxes in

advance of this year's election. Even some strong proponents of action on climate change have shied away from

discussing it publicly.

The Washington Post's PostPartisan blog reported Sept. 4 that Sen. Sheldon Whitehouse (D-R.I.) told the

audience at a side event at the Democratic National Convention earlier this month that Democratic senators

might use chamber rules to block any deal on the budget that did not include a carbon tax.

But Whitehouse, who has spoken of the need to address climate change repeatedly on the Senate floor, told

Greenwire last week that he had "no recollection" of saying Democrats should band together to insist on a carbon

tax.

2012-08-054_000000000001046
A former Senate Finance Committee aide noted that the scenario Whitehouse appears to propose in the Post

blog -- a 40-vote Democratic filibuster of any budget deal that did not include a price on carbon emissions --

would be unlikely to work, because budget legislation is routinely brought to the Senate floor under rules that do

not allow filibusters.

Such bills are usually brought to the floor under budget reconciliation rules, he noted, which require a simple

majority of 51 votes. Mustering a simple majority to pass a budget bill with a carbon tax would present more of a

challenge in a closely divided Senate that includes some Democrats who would be likely to vote "no," he noted.

If Republicans took control of the Senate after this autumn's election, Democrats would have no power to block a

bill brought to the floor under reconciliation.

"This is one reason that control of the Senate really matters," said the former aide.

Senate Environment and Public Works Chairwoman Barbara Boxer (D-Calif.) said last week that she wasn't

aware any of her colleagues had floated the idea of adding a carbon tax to the budget mix. Such a policy would

surely need Republican support, she said.

"When we get some Republican support, we can do it," she said. "You have to have Republican support."

In 2009, Boxer moved a carbon cap-and-trade bill through her committee with no Republican support. The

measure never received a vote on the Senate floor.

Sen. Ben Cardin (D-Md.) said a carbon tax is not currently part of the discussion on budget legislation but should

be.

"It has two advantages," Cardin said. "First, it does produce revenue that we could use. Secondly, it does have a

worthy purpose in order to reduce carbon emissions; it gives an economic incentive for the right type of energy

policies for our country."

Revenue issue not going away

The next Congress will continue to grapple with balancing the budget, Cardin said, which will require a

compromise between the two parties no matter what happens in November.

"Revenue is going to be in the equation," he said. "So we are looking for ways that we can get some kind of

consensus on revenue. And carbon tax might be one."

Rep. Jim McDermott (D-Wash.) is one of only two members of Congress to introduce a carbon tax bill (H.R.

6338) in this Congress. Unlike most supporters of the policy who hope it will play a role in future budget

negotiations, McDermott said last week that he believes it could figure in post-election efforts to avoid the socalled fiscal cliff next year.

"After the election, all things are possible," he said, as Republicans will feel the urgency of staving off mandatory

cuts to Defense Department spending that are set to take effect at the start of the year.

"They're going to start looking for taxes," he said. "And maybe we'll tax online gambling, and maybe we'll tax

[carbon]."

McDermott said he introduced his bill in order to get people on and off Capitol Hill thinking about a carbon tax in

the context of a budget deal.

"You need to have people out there thinking about it and talking about it, so that it doesn't come at them cold," he

said.

2012-08-054_000000000001047
Gilbert E. Metcalf

Deputy Assistant Secretary for Environment and Energy

U.S. Department of the Treasury

(202) 622-0173 (office)

(202) 316-8028 (mobile)

(202) 622-0037 (fax)

Email: gilbert.metcalf@treasury.gov

2012-08-054_000000000001048
From: Metcalf, Gilbert

To: "Ravi Gupta"

Subject: RE: confirming telcon today at 10:30 your time. will call then

Date: Tuesday, February 28, 2012 10:00:00 AM

Great.

Gilbert E. Metcalf

Deputy Assistant Secretary for Environment and Energy

U.S. Department of the Treasury

(202) 622-0173 (office)

(202) 316-8028 (mobile)

(202) 622-0037 (fax)

Email: gilbert.metcalf@treasury.gov

-----Original Message-----

From: Ravi Gupta @gmail.com]

Sent: Tuesday, February 28, 2012 9:27 AM

To: Metcalf, Gilbert

Subject: confirming telcon today at 10:30 your time. will call then

Sincerely,

Ravi Gupta

http://www.linkedin.com/

Cell:

Skype

-----Original Message-----

From: Ravi Gupta [ @gmail.com]

Sent: Friday, February 24, 2012 9:22 AM

To: Gilbert.Metcalf@treasury.gov

Subject: RE: carbon tax regressivity - World bank consultant. Exploring

further research

Thanks. I will call you then. I sent a calendar invite

Sincerely,

Ravi Gupta

http://www.linkedin.com

-----Original Message-----

From: Gilbert.Metcalf@treasury.gov [mailto:Gilbert.Metcalf@treasury.gov]

Sent: Friday, February 24, 2012 8:16 AM

To: @gmail.com

Subject: RE: carbon tax regressivity - World bank consultant. Exploring

further research

How about 10:30 (EST) on Tuesday. You can reach me on my office line.

(b) (6) (b) (6) (b) (6)(b) (6) (b) (6) (b) (6)(b) (6)

2012-08-054_000000000001049
Gilbert E. Metcalf

Deputy Assistant Secretary for Environment and Energy U.S. Department of the

Treasury

(202) 622-0173 (office)

(202) 316-8028 (mobile)

(202) 622-0037 (fax)

Email: gilbert.metcalf@treasury.gov

-----Original Message-----

From: Ravi Gupta [ @gmail.com]

Sent: Thursday, February 23, 2012 7:09 PM

To: Metcalf, Gilbert

Subject: RE: carbon tax regressivity - World bank consultant. Exploring

further research

Thanks for your note, Sir. Tuesday would be ideal. What time works for you.

I am in Chicago ie one hour behind you. Give me a specific time and I will

note my calendar. Also, I understand (202) 622-0173 (office) or (202)

316-8028 (mobile) are good numbers to reach you.

Sincerely,

Ravi Gupta

http://www.linkedin.com

Cell:

Skype

-----Original Message-----

From: Gilbert.Metcalf@treasury.gov [mailto:Gilbert.Metcalf@treasury.gov]

Sent: Thursday, February 23, 2012 2:54 PM

To: @gmail.com

Subject: FW: carbon tax regressivity - World bank consultant. Exploring

further research

Ravi,

I read your paper and would be happy to talk about it with you. Maybe on

Tuesday or Wednesday of next week?

Best,

Gib

Gilbert E. Metcalf

Deputy Assistant Secretary for Environment and Energy U.S. Department of the

Treasury

(202) 622-0173 (office)

(202) 316-8028 (mobile)

(202) 622-0037 (fax)

Email: gilbert.metcalf@treasury.gov

-----Original Message-----

From: Metcalf, Gilbert E. [mailto:Gilbert.Metcalf@tufts.edu]

Sent: Wednesday, January 18, 2012 10:19 AM

To: Metcalf, Gilbert

Subject: FW: carbon tax regressivity - World bank consultant. Exploring

(b) (6) (b) (6)(b) (6)(b) (6)

2012-08-054_000000000001050
further research

________________ ________

From: Ravi Gupta [ @gmail.com]

Sent: Wednesday, January 18, 2012 9:21 AM

To: Metcalf, Gilbert E.

Subject: RE: carbon tax regressivity - World bank consultant. Exploring

further research

Thanks for your note. <<...>>

I am sending the paper I wrote. Please note that the paper was written as a

term paper during grad school.

The report was written under the guidelines and using the style that Prof

 wanted, and not for any publication(external audience). The purpose

was gaining an understanding of a subject (carbon taxes regressivity) and

performing original computations and research. 

Hence I wish to speak to you, and take it from there. I am also trying to

get in touch with other think tanks and private organizations.

The objective of my conversation with you would be:

(b) (6)

NR

NRNR

NR

NR

NR

2012-08-054_000000000001051
1. potentially explore working further on the paper 2. Discuss other

possible research engagements on carbon finance where you believe my

research on carbon taxes could be helpful.

Let me know if you need any more information.

Sincerely,

Ravi Gupta

http://www.linkedin.com/

-----Original Message-----

From: Metcalf, Gilbert E. [mailto:Gilbert.Metcalf@tufts.edu]

Sent: Wednesday, January 18, 2012 7:32 AM

To: Ravi Gupta

Subject: RE: carbon tax regressivity - World bank consultant. Exploring

further research

Ravi,

I'm on leave from Tufts at US Treasury but would enjoy seeing your paper.

Could you send a copy. Happy to talk after taking a look.

Best,

Gib

________________________________

From: Ravi Gupta @gmail.com]

Sent: Tuesday, January 17, 2012 6:51 PM

To: Metcalf, Gilbert E.

Subject: carbon tax regressivity - World bank consultant. Exploring further

research

Hello Prof Metcalf,

Hope you are doing well. I am a consultant at the world bank. I am writing

to explore if you would find some of my work on regressivity of carbon

taxes, relevant to your current research.

I have conducted some research on carbon tax regressivity in the US based on

RECS data ( the first such study as other studies have used CEX data) and

have come up with some interesting findings. The study was done as part of

coursework to get credit for my graduate degree ie I haven't ( yet ) worked

for its publication.

(b) (6) (b) (6) (b) (6) (b) (6)

2012-08-054_000000000001052
Below a synopsis of my study . if you find it interesting and relevant to

your research, maybe we should talk.

Thanks.

********************Synopsis of carbon tax regressivity

research******************

A.M. (PUBLIC POLICY) PROJECT AT THE UNIVERSITY OF CHICAGO

Mar '11 - May '11 , Regressivity and geographical variation of carbon

taxes using RECS data, Chicago, IL

Researched the regressivity and geographical variation of carbon taxes using

the Suits index and RECS (Residential Energy Consumption Survey) data. The

study investigated the impact of different policy prescriptions (cap and

dividend, EITC, heating assistance etc) to ameliorate regressivity of carbon

taxes. The paper consisted of two parts. The first was actual computations

of regressivity using RECS data; this part covered many policy alternatives

covered by the Burtraw Sweeney and Walls (BSW) paper "The Incidence of

U.S.Climate Policy Where You Stand Depends on Where You Sit". The second

part was literature critique of various papers on topics related to carbon

taxation regressivity. The BSW paper was based on CEX (Consumer Expenditure)

data. For my study, the RECS data was used. Till date there is no published

study on carbon tax regressivity using RECS data. In fact the RECS data to

my knowledge has not been used in any study related to energy or carbon

taxes.

The paper:

* Provided a comprehensive understanding of various techniques,

methods and data sets used to study the regressivity of carbon taxes and

related policy issues.

* Developed an understanding of prominent issues related to carbon tax

regressivity and investigating those issues using RECS data.

* Developed a comprehensive list of policy alternatives for carbon

taxation (such as the EU emissions scheme which excludes transportation and

fuel used for heating) and policies to equitably distribute the revenues

obtained from taxation.

* Investigated the tradeoff between efficiency and regressivity under

different taxation regimes.

* Compared and contrasted various policy alternatives depending of

criteria such as regressivity, ease of administration etc.

* Provided insights into issues related to overall tax burden

regressivity, and amelioration policies that would be least distortionary.

*********************end of

synopsis********************************************************

Sincerely,

Ravi Gupta

http://www.linkedin.com/

(b) (6)

2012-08-054_000000000001053
(b) (6) (b) (6)

2012-08-054_000000000001054
From: Metcalf, Gilbert

To: "Parry, Ian W. H."

Subject: flexible carbon tax

Date: Thursday, January 19, 2012 11:30:00 AM

Ian,

Good to see you yesterday. Keep me posted on the conference. It should be very interesting.

Here’s a link to the paper I mentioned yesterday on a carbon tax to achieve specific emission

reduction targets: http://works.bepress.com/gilbert metcalf/84/

Best,

Gib

Gilbert E. Metcalf

Deputy Assistant Secretary for Environment and Energy

U.S. Department of the Treasury

(202) 622-0173 (office)

(202) 316-8028 (mobile)

(202) 622-0037 (fax)

Email: gilbert.metcalf@treasury.gov

2012-08-054_000000000001055
From: Kristin Hayes

To: Berg, Katie

Subject: RFF Energy and Climate Update: May 2012

Date: Monday, May 21, 2012 2:50:06 PM

Share This: 

If you are having trouble viewing this, click here.

logo

Welcome to the inaugural RFF

Energy and Climate Update,

highlighting the latest news and

research from RFF's Center for

Energy Economics and Policy

and Center for Climate and

Electricity Policy. The RFF

Energy and Climate Update will

be distr buted several times per

year.

In this issue

> New Research

> Publications

> News and Events

> Commentaries

On the web

Visit RFF on Facebook, Twitter,

and LinkedIn.

New Research:

The Variability of Potential

Revenue from a Carbon Tax

pic

Karen Palmer, Anthony Paul, and Matt Woerman illustrate how trends

in natural gas prices and electricity demand might influence revenues

from a theoretical U.S. carbon tax.

Publications 

Borrowing to Save Energy: Assessing Market Barriers to Energy

Efficiency Financing 

Karen Palmer, Margaret Walls, and Todd Gerarden

RFF researchers assess loan programs used to finance energy

efficiency improvements in homes and businesses, finding a need for

improved analysis of loan performance and energy savings from

financed investments. 

Improving Fuel Economy in Heavy-Duty Vehicles

Alan J. Krupnick and Winston Harrington

A new issue brief examines recently released fuel economy standards

for heavy-duty vehicles, suggesting improvements in the current

performance-based regulations and noting issues with the

accompanying cost-benefit analysis.

Tradable Standards for Clean Air Act Carbon Policy

2012-08-054_000000000001056
Dallas Burtraw, Arthur G. Fraas, and Nathan Richardson

RFF experts describe how tradable standards might be substantially

more cost-effective than traditional, inflexible performance standards

for regulating CO2 emissions in the context of the Clean Air Act.

News and Events 

Update on the Implementation of AB 32: Cap and Trade in Focus

In late March, Dallas Burtraw testified before members of the

California State Senate on cost management, auctioning allowances,

and uses of revenue in California's cap-and-trade program. Read his

testimony here.

Video and presentations are available for the following events:

Speculators and Oil Prices: What Do We Know and What Should We

Do?

GHG Regulation for Power Plants under the Clean Air Act

Managing the Risks of Shale Gas: Identifying a Pathway toward

Responsible Development

Commentaries 

Visit RFF's new blog, Common Resources, launched in April 2012. 

Beia Spiller: Advanced Technology Vehicles: The Chicken and Egg

Conundrum

Alan Krupnick: Oil Sands, Technology, and Environmental Risk

Nathan Richardson: Reactions to EPA's Proposed Power Plant

Standards 

1616 P Street, NW Suite 600 | Washington, DC 20036 US

This email was sent to katie.berg@do.treas.gov. To ensure that you continue receiving our emails, please add us to

your address book or safe list. 

manage your preferences | opt out using TrueRemoveTM

EmailNow powered by Emma

2012-08-054_000000000001057
From: Jaffe, Judson

To: Metcalf, GilbertDisabled

Subject: CRS Report

Date: Wednesday, September 26, 2012 1:59:00 PM

Attachments: carbon-tax-budget-deficit.pdf

While there's not much new here substantively, some of the tables appear to be interesting

presentations of some key points.

2012-08-054_000000000001058
CRS Report for Congress

Prepared for Members and Committees of Congress 

Carbon Tax: Deficit Reduction and 

Other Considerations 

Jonathan L. Ramseur 

Specialist in Environmental Policy 

Jane A. Leggett 

Specialist in Energy and Environmental Policy 

Molly F. Sherlock 

Specialist in Public Finance 

September 17, 2012 

Congressional Research Service 

7-5700 

www.crs.gov 

R42731 

2012-08-054_000000000001059
Carbon Tax: Deficit Reduction and Other Considerations 

Congressional Research Service 

Summary 

The federal budget deficit has exceeded $1 trillion annually in each fiscal year since 2009, and 

deficits are projected to continue. Over time, unsustainable deficits can lead to reduced savings 

for investment, higher interest rates, and higher levels of inflation. Restoring fiscal balance would 

require spending reductions, revenue increases, or some combination of the two. 

Policymakers have considered a number of options for raising additional federal revenues, 

including a carbon tax. A carbon tax could apply directly to carbon dioxide (CO2) and other 

greenhouse gas (GHG) emissions, or to the inputs (e.g., fossil fuels) that lead to the emissions. 

Unlike a tax on the energy content of each fuel (e.g., Btu tax), a carbon tax would vary with a 

fuel’s carbon content, as there is a direct correlation between a fuel’s carbon content and its CO2 

emissions. 

Carbon taxes have been proposed for many years by economists and some Members of Congress, 

including in the 112th Congress. If Congress were to establish a carbon tax, policymakers would 

face several implementation decisions, including the point and rate of taxation. Although the 

point of taxation does not necessarily reveal who bears the cost of the tax, this decision involves 

trade-offs, such as comprehensiveness versus administrative complexity. 

Several economic approaches could inform the debate over the tax rate. Congress could set a tax 

rate designed to accrue a specific amount of revenues. Some would recommend setting the tax 

rate based on estimated benefits associated with avoiding climate change impacts. Alternatively, 

Congress could set a tax rate based on the carbon prices estimated to meet a specific GHG 

emissions target. 

Carbon tax revenues would vary greatly depending on the design features of the tax, as well as 

market factors that are difficult to predict. One study estimated that a tax rate of $20 per metric 

ton of CO2 would generate approximately $88 billion in 2012, rising to $144 billion by 2020. The 

impact such an amount would have on budget deficits depends on which budget deficit projection 

is used. For example, this estimated revenue source would reduce the 10-year budget deficit by 

50%, using the 2012 baseline projection of the Congressional Budget Office (CBO). However, 

under CBO’s alternative fiscal scenario, the same carbon tax would reduce the 10-year budget 

deficit by about 12%. 

When deciding how to allocate revenues, policymakers would encounter key trade-offs: 

minimizing the costs of the carbon tax to “society” overall versus alleviating the costs borne by 

subgroups in the U.S. population or specific domestic industries. Economic studies indicate that 

using carbon tax revenues to offset reductions in existing taxes—labor, income, and investment—

could yield the greatest benefit to the economy overall. However, the approaches that yield the 

largest overall benefit often impose disproportionate costs on lower-income households. 

In addition, carbon-intensive, trade-exposed industries may face a disproportionate impact within 

a unilateral carbon tax system. Policymakers could alleviate this burden through carbon tax 

revenue distribution or through a border adjustment mechanism. Both approaches may entail 

trade concerns. 

2012-08-054_000000000001060
Carbon Tax: Deficit Reduction and Other Considerations 

Congressional Research Service 

Contents 

Introduction...................................................................................................................................... 1

Design and Implementation............................................................................................................. 4

Point of Taxation ....................................................................................................................... 4

Rate of Taxation......................................................................................................................... 8

Carbon Tax Effects on Fossil Fuel Prices.................................................................................. 9

Framework for Evaluation............................................................................................................. 13

Adequacy—The Potential to Generate Revenues.................................................................... 14

Economic Efficiency ............................................................................................................... 18

Many Taxes Have Distortionary Effects ........................................................................... 18

Taxes May Correct Market Failures.................................................................................. 19

An Economically Efficient Carbon Tax Rate.................................................................... 20

Equity ...................................................................................................................................... 20

Vertical Equity................................................................................................................... 20

Horizontal Equity.............................................................................................................. 21

Individual Equity............................................................................................................... 21

Generational Equity........................................................................................................... 21

Operability............................................................................................................................... 22

Administrative Ease .......................................................................................................... 22

Consistency with Federal and International Norms and Standards................................... 22

Potential Perverse Effects.................................................................................................. 23

Transparency ..................................................................................................................... 23

Political Feasibility.................................................................................................................. 24

Contribution to Deficit Reduction ................................................................................................. 24

Alternative Uses for Carbon Tax Revenues................................................................................... 26

Distribute Carbon Tax Revenues to Households ..................................................................... 26

Address Economy-Wide Costs................................................................................................ 29

Assist Carbon-Intensive, Trade-Exposed Industries................................................................ 30

Concluding Observations............................................................................................................... 31

Figures 

Figure 1. Illustration of Options for Points of Taxation within the Energy Production-toConsumption Chain ...................................................................................................................... 5

Figure 2. FY2011 Federal Receipts by Source .............................................................................. 16

Figure 3. Annual Carbon Tax Revenues in the Electricity Sector.................................................. 17

Figure 4. CBO Estimated Revenues from a $20/mtCO2 Carbon Tax Compared to Two 

CBO Budget Deficit Projections ................................................................................................ 25

Tables 

Table 1. Selected Sources of U.S. GHG Emissions and Potential Applications of a Carbon 

Tax ................................................................................................................................................ 6

2012-08-054_000000000001061
Carbon Tax: Deficit Reduction and Other Considerations 

Congressional Research Service 

Table 2. CO2 Emissions Per Unit of Energy for Fossil Fuels ........................................................ 10

Table 3. Estimated Taxes Levied on Fossil Fuels and Motor Gasoline Based on Selected 

Carbon Tax Rates........................................................................................................................ 11

Table 4. Estimated Revenues from a CBO CO2 Emissions Pricing Model.................................... 15

Table 5. Distributional Effects of Carbon Tax with Different Applications of Carbon Tax 

Revenues..................................................................................................................................... 28

Appendixes 

Appendix. Carbon Tax and Carbon Pricing Proposals in the 111th Congress ................................ 33

Contacts 

Author Contact Information........................................................................................................... 33

2012-08-054_000000000001062
Carbon Tax: Deficit Reduction and Other Considerations 

Congressional Research Service 1 

Introduction 

The federal budget deficit has exceeded $1 trillion annually in each fiscal year since 2009. In 

August 2012, the Congressional Budget Office (CBO) estimated an FY2012 budget deficit of 

$1.1 trillion, or 7.3% of gross domestic product (GDP).1

 Under CBO’s alternative fiscal scenario, 

which assumes continuation of many current policies, the deficit as a percentage of GDP will be 

above 5% and rising from 2021 onward. Budget deficits are projected to continue, as the current 

mix of federal fiscal policies is widely viewed as being unsustainable in the long term.2

 Over 

time, unsustainable deficits can have negative macroeconomic consequences, including reduced 

savings for investment, higher interest rates, and higher levels of inflation.3

 Restoring fiscal 

balance will require spending reductions, revenue increases, or some combination of the two. 

Policymakers have considered a number of options for raising additional federal revenues (see the 

text box below). One potential option is a carbon tax. Several economists and policy analysts 

from across the political spectrum have expressed interest in a carbon tax mechanism in recent 

years.4

 As of the date of this report, Members have introduced two carbon tax bills in the 112th

Congress.5

 Several carbon price systems were proposed in the 111th Congress—as identified in 

the Appendix—most frequently as an efficient means to stimulate greenhouse gas (GHG) 

emission reductions. In addition, some countries have levied carbon taxes (or something similar) 

for over 20 years.6

 

1

 Congressional Budget Office, An Update to the Budget and Economic Outlook: Fiscal Years 2012 to 2022, 

Washington, DC, August 2012, http://www.cbo.gov/publication/43539. 

2

 For background on budget baselines, see CRS Report R42362, The Federal Budget: Issues for FY2013 and Beyond, 

by Mindy R. Levit and CRS Report R41778, Reducing the Budget Deficit: Policy Issues, by Marc Labonte. 

3

 See CRS Report RL33657, Running Deficits: Positives and Pitfalls, by D. Andrew Austin. 

4

 A sampling of recent news and academic articles includes Mark Golden and Mark Shwartz, “Stanford’s George 

Shultz on Energy: It’s Personal,” Stanford University, July 12, 2012; Jon Greenberg, “Laffer Carbon Tax: A Carbon 

Tax With a Twist to Please GOP—Maybe,” New Hampshire News, December 14, 2011; Robert Inglis, “Fixing Market 

Distortions: A Free-Market Solution for Energy and Climate,” University of Chicago Booth School of Business, April 

11, 2012; Gilbert Metcalf, “Designing a Carbon Tax to Reduce U.S. Greenhouse Gas Emissions” Review of 

Environmental Economics and Policy 3, no. 1, pp. 63-83, September 2008; Brad Plumer, “Romney’s One Big Idea on 

Climate—and Why He’s Unlikely to Pursue It,” The Washington Post, March 8, 2012; Amy Wolf, “Economist Arthur 

Laffer Proposes Taxing Pollution Instead of Income,” Vanderbilt University, February 20, 2012. 

5

 See the Save Our Climate Act of 2011 (H.R. 3242) and the Managed Carbon Price Act of 2012 (H.R. 6338). 

6

 For a review of carbon taxes levied in other countries, see Jenny Sumner, et al., Carbon Taxes: A Review of 

Experiences and Policy Design Considerations, National Renewable Energy Laboratory, NREL/TP-6A2-47312, 

December 2009. 

2012-08-054_000000000001063
Carbon Tax: Deficit Reduction and Other Considerations 

Congressional Research Service 2 

Options for Raising Federal Revenues 

Congress could utilize one or more policy options to raise federal revenue. One frequently discussed option is to 

“broaden the tax base” by reforming or eliminating certain tax preferences. Some proponents of tax-base broadening 

suggest that any revenues raised should be used to reduce marginal rates, such that tax reform is revenue neutral.7

Accordingly, tax-base broadening may have limited potential to generate additional federal revenues.8 A second 

option for raising additional revenues is to increase other existing taxes. For example, Social Security reform might 

include increased payroll taxes.9 Another option would be an increase in the motor fuel excise tax (e.g., the gas tax).10

In addition, a number of alternative revenue sources could be used for deficit reduction, many of which are not widely 

used at the federal level. As one example, the United State could consider a value-added tax (VAT).11

For more information, see CRS Report R41641, Reducing the Budget Deficit: Tax Policy Options, by Molly F. Sherlock and 

Congressional Budget Office, Reducing the Deficit: Spending and Revenue Options, Washington, DC, March 2011. 

Other policy considerations, including environmental concerns, may also lead to consideration of 

a carbon tax. GHG in the atmosphere trap radiation as heat, warming the Earth’s surface and 

oceans. The key human-related GHG is carbon dioxide (CO2), primarily generated through the 

combustion of fossil fuels: coal, oil, and natural gas.12 Although fossil fuels have facilitated 

economic growth in the United States and around the world, fossil fuel combustion has 

inadvertently raised the atmospheric concentration of CO2 by about 40% over the past 150 

years.13 Almost all climate scientists agree14 that these CO2 increases have contributed to a 

warmer climate today, and that, if they continue, will contribute to future climate change. 

 

7

 See, e.g., House Committee on the Budget Chairman Paul Ryan’s “Path to Prosperity” report, released to accompany 

the FY2012 Budget Resolution (H.Con.Res. 34), which suggests eliminating unspecified tax expenditures to allow for 

reduced marginal tax rates. This report also states that eliminating tax expenditures would not be for the purpose of 

generating additional tax revenues. President Obama also expressed support for a revenue-neutral corporate tax reform 

as part of his 2012 State of the Union Address. Text of this address is available online at http://www.whitehouse.gov/

the-press-office/2012/01/24/remarks-president-state-union-address. 

8

 CRS Report R42435, The Challenge of Individual Income Tax Reform: An Economic Analysis of Tax Base 

Broadening, by Jane G. Gravelle and Thomas L. Hungerford. 

9

 Both the Fiscal Commission and Debt Reduction Task Force plans would increase the wage base upon which payroll 

taxes are applied, thus increasing payroll tax revenues. 

10 The Fiscal Commission’s deficit reduction proposal included a $0.15 per gallon increase in the federal motor fuel 

excise tax. 

11 See CRS Report R41602, Should the United States Levy a Value-Added Tax for Deficit Reduction?, by James M. 

Bickley and CRS Report R41708, Value-Added Tax (VAT) as a Revenue Option: A Primer, by James M. Bickley. 

12 Carbon dioxide (CO2) accounted for approximately 84% of U.S. GHG emissions in 2010. Approximately 94% of the 

CO2 emissions resulted from fossil fuel combustion activities. See U.S. Environmental Protection Agency, Inventory of 

U.S. Greenhouse Gas Emissions and Sinks, 1990-2010, April 2012, at http://epa.gov/climatechange/ghgemissions/

usinventoryreport html. 

13 For more information on climate change science, see CRS Report RL34266, Climate Change: Science Highlights, or 

CRS Report RL33849, Climate Change: Science and Policy Implications, both by Jane A. Leggett. 

14 See, for example, in 2007, the InterAcademy Council and the International Council of Academies of Engineering and 

Technological Sciences—both representing academies of sciences from dozens of nations—issued statements 

concurring that warming of the climate over the past 50 years is likely to have been caused by increased concentrations 

of GHG emissions in the atmosphere, with that increase having been caused by human-related GHG emissions. The 

views of a relatively small circle of scientists have been widely publicized as opposing mainstream conclusions; 

however, for these individuals the disagreement lies not in whether GHG increases have been caused by human 

activities, but whether these exert a “dangerous” influence on climate. See, for example, Robert M. Carter, “Knock, 

Knock: Where Is the Evidence for Dangerous Human-Caused Global Warming?” Economic Analysis & Policy, 

September 2008; S. Fred Singer, “Human Contribution to Climate Change Remains Questionable.” EOS Transactions

80, April 20, 1999, pp. 183–187. 

2012-08-054_000000000001064
Carbon Tax: Deficit Reduction and Other Considerations 

Congressional Research Service 3 

Many economists have argued that current fossil fuel prices reflect a market failure, because 

GHG emissions from fossil fuels contribute to current and future climate change, yet fossil fuel 

prices do not reflect climate change-related costs. Market failures distort economic efficiency by 

affecting consumer behavior. For example, energy consumers may make choices that are not in 

society’s best interest, consuming more than the optimal amount of GHG emitting fuels, if prices 

do not reflect climate change-related costs. 

Carbon taxes, or GHG fees, have been proposed as one means to correct such a market failure. 

Another option is a cap-and-trade program, which would attach a price to GHG emissions by 

limiting their generation.15 To some extent, a carbon tax and cap-and-trade program would 

produce similar effects: Both would place a price on carbon, and both are estimated to increase 

the price of fossil fuels. Preference between the two approaches ultimately depends on which 

variable one prefers to control—GHG emissions or costs.16 

A tax based on carbon content of fuels is different from a tax based on energy content, such as a 

Btu tax (see the text box below). Placing an emissions fee on CO2 (and possibly other GHG 

emissions) could stimulate lower emissions and spur innovation in new lower-emitting 

technologies. A tax or fee based approach would allow markets to determine the level of 

investment in lower-emissions technologies. In addition, carbon tax revenues could be used to 

support multiple objectives, such as deficit reduction, or to replace existing taxes (e.g., payroll, 

income). 

The 1993 Btu Tax 

The deficit reduction package proposed by President Clinton in 1993 would have levied a tax based on energy 

content, measured in British thermal units (Btu). The 1993 Btu tax proposal called for a levy of 25.7 cents per million 

Btu, with a surcharge of 34 cents/million Btu on petroleum. The goals of the 1993 Btu tax proposal were to promote 

energy conservation and raise revenue. At the time, the proposed tax would have generated a new revenue stream of 

about $30 billion per year. The proposal was met with strong opposition and was not enacted; Congress ultimately 

enacted an (approximately 5-cent per gallon) increase in the motor fuels taxes. 

The first section of this report examines carbon tax design and implementation issues, including 

the point of taxation, the rate of taxation, and the distribution of tax revenue. The second section 

discusses several carbon tax policy considerations: revenue potential, economic efficiency, equity, 

and operability. The final section highlights key issues related to the use of carbon tax revenues. 

Specifically, how might addressing the regressivity of a carbon tax diminish its revenue-raising 

potential, and what is the potential for a carbon tax to contribute to deficit reduction goals? 

 

15 Regulatory approaches can also be used to address market failures. Regulation-based emissions controls that reduce 

emissions would also be expected to increase the price of fossil fuels. The higher price faced by consumers may be 

closer to the true cost associated with consumption of emissions-producing fossil fuels. 

16 For a discussion see CRS Report R40242, Carbon Tax and Greenhouse Gas Control: Options and Considerations 

for Congress, by Jonathan L. Ramseur. 

2012-08-054_000000000001065
Carbon Tax: Deficit Reduction and Other Considerations 

Congressional Research Service 4 

Design and Implementation 

When establishing a carbon tax, there are several implementation decisions to be considered. Key 

considerations include (1) the point of taxation—where to impose the tax and what to tax; and (2) 

the rate of taxation. Information on how a carbon tax might affect fossil fuel prices is also 

provided. 

Point of Taxation 

The point of taxation would influence which entities would be required to (1) make tax payments 

based on emissions or emission inputs (e.g., fossil fuels), (2) monitor emissions or emission 

inputs, and (3) maintain records of relevant activities and transactions. The point of taxation does 

not necessarily reveal who bears the cost of the tax, as the cost may be passed on to intermediate 

producers or consumers. (This will be discussed in a later section.) 

GHG emissions are generated throughout the economy by millions of discrete sources: 

smokestacks, vehicle exhaust pipes, households, commercial buildings, livestock, etc. Although 

CO2 is the primary GHG at many sources, some sources predominantly emit non-CO2 GHGs, 

such as methane.17 When determining which sources and which GHG gases to control through a 

tax, policymakers would need to balance the benefits of comprehensiveness with administrative 

complexity and costs. Applying a carbon tax at the points of emissions from all GHG sources 

would present enormous logistical challenges. 

CO2 emissions are fairly easily to verify from large stationary sources, such as power plants. For 

almost 20 years, measurement devices have been installed in smokestacks of large facilities, 

reporting electronic information to the U.S. Environmental Protection Agency. For smaller 

sources, CO2 emissions are a straightforward and accurate calculation based on the carbon 

content of fossil fuels consumed. Other GHG emissions, such as methane, nitrous oxides, sulfur 

hexafluoride, and others, could be more difficult or less reliable to verify. Thus, administrative 

costs and non-compliance risks would likely increase with a broader scope of an emissions tax. 

However, limiting the tax scope could result in perverse effects, with sources potentially shifting 

processes, facility size, or location to avoid taxes. 

Policymakers may consider limiting the tax to sectors or sources that emit large percentages of 

the total U.S. GHG emissions or those that are relatively easy to measure. Or, the tax could be 

applied to reliable proxies for emissions in the production-to-emission chain. For example, the 

fossil fuel supply chain offers some options. As illustrated in Figure 1, potential emissions could 

be taxed at an “upstream” stage in that process, when the carbon-containing fossil fuel is first sold 

following production. Or, the point of taxation could, theoretically, be “downstream” where the 

pollution is released to the atmosphere.18

 

17 Carbon tax proposals that apply only to CO2 generally attach a price to a metric ton of CO2 emissions (tCO2). NonCO2 GHG emissions could be addressed by attaching a price to a metric ton of CO2 emissions-equivalent (tCO2e). This 

term of measure is used because GHGs vary by global warming potential (GWP). GWP is an index of how much a 

GHG may contribute to global warming over a period of time, typically 100 years. GWPs are used to compare gases to 

CO2, which has a GWP of 1. For example, methane’s GWP is 25, and thus a ton of methane is 25 times more potent a 

GHG than a ton of CO2. 

18 A non-carbon example could be taxing nitrogen-based fertilizers based on their propensity to be emitted from 

(continued...) 

2012-08-054_000000000001066
Carbon Tax: Deficit Reduction and Other Considerations 

Congressional Research Service 5 

Table 1 lists the top emission sources of six principal GHGs in the United States. These sources 

combine to account for approximately 95% of these gases (based on 2010 data).19 Table 1 also 

provides potential points of taxation that would cover the emissions from these sources. For 

example, policymakers could address CO2 emissions from fossil fuel combustion and non-energy 

uses by levying an “upstream”20 carbon tax on fewer than 2,300 entities—in aggregate 80% of 

U.S. GHG emissions. 

Figure 1. Illustration of Options for Points of Taxation within the 

Energy Production-to-Consumption Chain 

Oil wells Natural gas wells Coal mines

Midstream

Upstream

Oil refineries

Downstream

Vehicles

Importers

Electric utilities

Natural gas 

processors/pipelines

Households Commercial 

buildings Industry

Oil wells Natural gas wells Coal mines

Midstream

Upstream

Oil refineries

Downstream

Vehicles

Importers

Electric utilities

Natural gas 

processors/pipelines

Households Commercial 

buildings Industry

Source: Prepared by CRS. 

Note: Electric utilities could be listed as either downstream entities—because they are direct sources of 

emissions—or midstream, because their emissions are tied to the electricity consumption of their customers, 

the further downstream consumers. 

 

(...continued) 

agricultural soils as nitrous oxide (N2O), another GHG the emissions of which would be difficult to measure directly. 

19 There are additional GHGs, but they are smaller influences (though rapidly growing in some cases) and less 

measured. Also, this does not account for the emissions and removals of carbon dioxide from the atmosphere by land 

use, land use change, and forestry (LULUCF). For more information, see CRS Report RL34266, Climate Change: 

Science Highlights, by Jane A. Leggett. 

20 An upstream approach would apply a carbon tax to fossil fuels when they enter the U.S. economy, either at the mine, 

wellhead, or another practical “chokepoint” in the production chain, such as oil refineries. 

2012-08-054_000000000001067
Carbon Tax: Deficit Reduction and Other Considerations 

Congressional Research Service 6 

Alternatively, policymakers could employ a “downstream” approach, applying a carbon tax at the 

point where the gas is released to the atmosphere. For example, the FY2008 Consolidated 

Appropriations Act (P.L. 110-161) requires all large sources to annually report their GHG 

emissions to the EPA’s Greenhouse Gas Reporting Program (GHGRP).21 The program covers 

between 85-90% of all U.S. GHG emissions from approximately 13,000 facilities.22

Table 1. Selected Sources of U.S. GHG Emissions and Potential 

Applications of a Carbon Tax 

Potential Carbon Tax Applications 

GHG Emission Source 

Percentage of U.S. 

GHG Emissions 

(2010 data) Entity Number 

Coal minesa

or 

Coal-fired power plantsb

1,257 

641 

Power plantsc using 

imported coald

26 

Petroleum refineriese 150 

Petroleum importersf

 220 

Natural gas processorsg 530 

CO2 from fossil fuel combustion: 

- electricity generation 

- transportation 

- industrial 

- commercial/residential 

78.9 

Natural gas importersh 45 

N2O from agricultural soils 3.0 Farmsi >2 million 

CO2 from non-energy use of fuels 1.8 Covered by the tax applied to fuels (above)j

CH4 from livestock (enteric 

fermentation) 

2.1 Cattle operationsk 967,440 

CH4 from landfills 1.6 Landfillsl

 1,800 

HFCs from the substitution of ozone 

depleting substances 

1.7 HFC manufacturersm 5 

CH4 from natural gas systems 3.1 Natural gas processors 530 

CH4 from coal mines 1.1 Coal minesn 1,257 

CO2 from iron/steel production 0.8 Raw steel production 

facilities; 

Integrated steel millso

116 

18 

CO2 from cement manufacturing 0.5 Cement plantsp 118 

CH4 from manure management 0.8 Cattle operations; 

Swine operationsq

967,440 

65,640 

Percentage of Total GHG Emissions 95.4 

Source: Prepared by CRS; GHG emission data from EPA, EPA, Inventory of U.S. Greenhouse Gas Emissions and 

Sinks: 1990-2010, April 2012; data for number of entities from multiple sources, cited in notes below. 

 

21 See 40 CFR Part 98. 

22 EPA, Fact Sheet: Mandatory Reporting of Greenhouse Gases (40 CFR Part 98), June 2011. 

2012-08-054_000000000001068
Carbon Tax: Deficit Reduction and Other Considerations 

Congressional Research Service 7 

a. This figure accounts for mines in operation in 2010. EIA, Coal Production and Number of Mines by State and 

Mine Type, (2011). 

b. In 2006, there were 641 plants with at least one coal-fired generating unit (EIA, 860 Database). 

c. Number of plants comes from EIA database, Monthly Nonutility Fuel Receipts and Fuel Quality Data 

(Database 423). CRS was unable to determine the number of companies that act as coal importers, 

analogous to petroleum importers. 

d. In 2006, the United States imported approximately 36 million short tons of coal (EIA, Quarterly Coal Report

(2008), table 4)—3.5% of the amount of coal consumed domestically in that year (EIA, Annual Coal Report 

2006 (2007), table 26). Coal imports have increased by more than 200% since 2002. 

e. This figure represents the number of “operable” refineries. EIA, Refinery Capacity Report (2008). 

f. EIA, Company Level Imports (as of November 2008). Note that some of these companies may import only 

crude oil, whose emissions would be covered by the tax at the domestic refineries. Thus, this figure 

represents an upper bound of petroleum product importers potentially subject to a carbon tax. 

g. EIA, Natural Gas Processing: The Crucial Link Between Natural Gas Production and Its Transportation to 

Market (2006). 

h. This includes pipelines and liquefied natural gas facilities. EIA, About U.S. Natural Gas Pipelines (as of 

September 2008). 

i. U.S. Department of Agriculture, Farms, Land in Farms, and Livestock Operations: 2007 Summary (2008). The 

resource defines a farm as “any place from which $1,000 or more of agricultural products were produced 

and sold, or normally would have been sold, during the year.” 

j. Fossil fuels are used for a wide range of non-energy purposes. EPA estimates that of the total carbon 

consumed for non-energy purposes, approximately 62% is stored in products, and not released to the 

atmosphere (EPA, Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2006 (April 2008), tables 3-14 

and 3-15). The 2% value in Table 4 represents the emissions. In an upstream carbon tax system, fuels would 

be taxed before they are used. Congress could choose to consider providing tax credits for the amount of 

carbon stored in products. 

k. U.S. Department of Agriculture, Farms, Land in Farms, and Livestock Operations: 2007 Summary (2008). 

l. EPA, Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2006 (April 2008), citing BioCycle, 15th

Annual BioCycle Nationwide Survey: The State of Garbage in America (2006). 

m. Intergovernmental Panel on Climate Change, Safeguarding the Ozone Layer and the Global Climate System, 

Issues related to Hydrofluorocarbons and Perfluorocarbons (2005), Figure 11.1. 

n. Methane from underground mines, which accounts for about 61% of coal mine methane, is removed 

through ventilation systems for safety reasons. These emissions would be easier to monitor under a carbon 

tax than aboveground coal mine methane emissions. 

o. Data from U.S. Geological Survey, Mineral Commodity Summary, Iron and Steel Production (2008), at 

http://minerals.usgs.gov/minerals/pubs/commodity/iron_&_steel/. 

p. Cement manufacturing information from Portland Cement Association, at http://www.cement.org/basics/

cementindustry.asp. 

q. U.S. Department of Agriculture, Farms, Land in Farms, and Livestock Operations: 2007 Summary (2008). Other 

animals—chickens, horses, and sheep—contribute approximately 10% of the total emissions from manure 

(EPA, Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2006 (April 2008), table 6-6). 

2012-08-054_000000000001069
Carbon Tax: Deficit Reduction and Other Considerations 

Congressional Research Service 8 

Rate of Taxation 

Although setting the carbon tax rate would likely involve political considerations, several 

economic approaches could be used to inform the debate. As a public finance instrument, the tax 

rate could be based on the estimated revenues needed to reduce or eliminate projected budget 

deficits.23 This approach would be challenging, because estimates of future budget deficits (and 

thus the revenues needed to address them) are “inherently uncertain.”24 Moreover, a carbon tax 

would have some impact on the overall economy (and thus the overall tax base) that would make 

such a calculation more difficult. 

Alternatively, the tax rate could be tied to climate change objectives. For example, Congress 

could set a tax rate based on the estimated benefits associated with avoiding climate change 

impacts. Some economists would say that the optimal level of a carbon tax would be at the 

“marginal cost of climate change,” which is the incremental cost of damages of one more ton of 

emissions. This is sometimes called the Social Cost of Carbon (SCC).25 The rate could include, as 

well, the cost of incremental damages of ocean acidification and other possible effects associated 

with carbon emissions (e.g., related air pollution).26

Estimates of the risks of GHG emissions are uncertain and cover a wide range. Analysts must 

place monetary values on goods and services that may be difficult or controversial to estimate, 

such as human health/life, water supplies, agricultural production, recreational activities. In 

addition, the element of time particularly complicates the valuation. The factor of time would 

demand a consideration of what global society should be willing to pay now to avoid future

damages due to additional emissions generated today.

27 In short, basing the tax rate on a precise 

estimate of GHG emission-related risks would present extraordinary challenges.28

 

23 The ability of a carbon tax to contribute to deficit reduction is analyzed in greater detail elsewhere in this report. See 

the section “Contribution to Deficit Reduction” below. 

24 Congressional Budget Office, The 2012 Long-Term Budget Outlook, June 2012. 

25 The SCC has been estimated for the purposes of allowing government agencies to consider social benefits from 

reduced carbon emissions in cost-benefit analysis. Details on the SCC for this purpose can be found in Interagency 

Working Group on the Social Cost of Carbon, United States Government, Technical Support Document: Social Cost of 

Carbon for Regulatory Impact Analysis Under Executive Order 12866, February 2010. SCC estimates are also 

provided in William D. Nordhaus, Estimates of the Social Cost of Carbon: Background and Results from the Rice-2011 

Model, National Bureau of Economic Research, Working Paper 17540, Cambridge, MA, October 2011. 

26 These costs may be estimated simultaneously, or separately, as is done in National Academy of Sciences, Hidden 

Costs of Energy: Unpriced Consequences of Energy Production and Use, 2010; and Michael Greenstone and Adam 

Looney, A Strategy for America’s Energy Future: Illuminating Energy’s Full Costs, The Hamilton Project, Strategy 

Paper, May 2011. 

27 A critical and controversial assumption here is the discount rate used to discount future dollars into a present value. 

The use of low discount rates, such as some analyzed in Nicholas Stern’s 2007 Review on the Economics of Climate 

Change, imply that aggressive policy action should be taken today to address future costs associated with climate 

change. Higher discount rates, such as those favored by William Nordhaus, would recommend applying fewer of 

today’s resources to addressing climate change in the future (see William D. Nordhaus, “A Review of the Stern Review 

on the Economics of Climate Change,” Journal of Economic Literature, vol. 45, no. 3 (September 2007), pp. 686-702.) 

Higher discount rates mean that costs in the future are worth less today, and less investment is warranted in the present 

to address future costs of climate change impacts. On the other hand, a fairness issues is raised by some in that high 

discount rates place little value on costs borne by generations yet to be born, whose preferences are generally not 

reflected in current generations’ discount rates. There is little agreement in the economics community on appropriate 

discount rates to value such inter-generational problems. 

28 For further details see CRS Report R40242, Carbon Tax and Greenhouse Gas Control: Options and Considerations 

for Congress, by Jonathan L. Ramseur. See also the section on economics-based policy approaches in CRS Report 

(continued...) 

2012-08-054_000000000001070
Carbon Tax: Deficit Reduction and Other Considerations 

Congressional Research Service 9 

An alternative climate change approach would involve basing the tax rate on an estimate of the 

carbon price needed to meet a specific GHG emissions target. Such estimates, though relatively 

more certain than the SCC, are similarly based on multiple assumptions. Accordingly, estimates 

of carbon prices in hypothetical carbon reduction schemes have varied dramatically. For example, 

multiple parties prepared such estimates during the development of H.R. 2454 (in the 111th

Congress), which intended to reduce GHG emissions to 17% below their 2005 levels by 2020.29

The emission allowance price estimates ranged from $16/metric tons of CO2 equivalent (mtCO2e) 

to $49/tCO2e in 2015, with the estimated range increasing over time.30 Moreover, it could be 

challenging to reach political agreement on the GHG emissions target sought as well as the tax 

rate that would achieve it. 

Given the uncertainty in the above estimates and a desire to avoid “shocking” the economy with a 

sudden change in tax policy, some have proposed starting a carbon tax with a rate that is initially 

set at a low rate, with that rate rising annually as announced for a fixed period or indefinitely. 

This approach would have several potential advantages: it is simple to explain and understand; it 

provides predictability to investors and consumers; and it allows policymakers to hedge31 against 

the risks of carbon emissions. 

Carbon Tax Effects on Fossil Fuel Prices 

Different fossil fuels generate different amounts of CO2 emissions per unit of energy. Therefore, a 

carbon tax, which is based on CO2 emissions, would levy a higher charge (per unit of energy) on 

some fuels than others. As indicated in Table 2, coal generates approximately 80% more CO2

emissions per unit of energy than natural gas, and approximately 28% more emissions per energy 

than crude oil. These differences in emissions intensity would lead to different tax rates per unit 

of energy across different fuels in a carbon tax regime. 

 

(...continued) 

R41973, Climate Change: Conceptual Approaches and Policy Tools, by Jane A. Leggett. 

29 H.R. 2454 (the American Clean Energy and Security Act of 2009, often called the “Waxman-Markey” bill) passed 

the House on June 26, 2009. 

30 For more information, see CRS Report R40809, Climate Change: Costs and Benefits of the Cap-and-Trade 

Provisions of H.R. 2454, by Larry Parker and Brent D. Yacobucci. 

31 To “hedge” is to insure oneself against losses. Investors typically face uncertainty and may use “hedging” as a 

strategy to reduce losses if/when adverse conditions occur. Investors may take actions that would offset the risk of 

another investment. Many analysts have recommended that policymakers hedge against future climate change risks by 

making investments, perhaps at a lower rate of return than other options, that would make sense whether or not future 

climate change is seriously adverse. For example, investing in low-emitting technologies may be one kind of hedge 

against climate change; stimulating such investments through a carbon tax may also be considered a hedge by many. 

2012-08-054_000000000001071
Carbon Tax: Deficit Reduction and Other Considerations 

Congressional Research Service 10 

Table 2. CO2 Emissions Per Unit of Energy for Fossil Fuels 

Fossil Fuel 

CO2 Emissions Per Unit of Energy 

(million metric tons/quadrillion BTU) 

Coal 96 

Crude oil 75 

Natural gas 53 

Source: Prepared by CRS, based on Energy Information Administration (EIA), “Emissions 

Factors and Global Warming Potentials,” updated January 2011, at http://www.eia.gov/oiaf/

1605/emission_factors.html. 

Notes: Coal emissions intensity values vary by type of coal, from 93-104 million metric 

tons/quadrillion BTU. The value above is for coal use in the electric power sector. The natural 

gas value above is the weighted national average of all uses, as prepared by EIA. 

Table 3 includes estimates of the tax levied on fossil fuels and motor gasoline at different carbon 

tax rates. The change in price that consumers would see would likely not be the same as the 

carbon tax. Carbon taxes could affect fuel prices in complex ways. For example, energy 

consumers, to the extent possible, would likely shift their preferences to less expensive fuels, and 

the underlying prices of the fuels would change. Actual price increases that result from the 

illustrative carbon taxes in Table 3 would depend on whether 

• a carbon tax is applied at the beginning of the production process (“upstream”) to 

fossil fuels (Figure 1); 

• the price impacts are passed through to end-users and not absorbed by upstream 

energy producers or midstream entities (such as retailers); and 

• consumers modify their behavior in the marketplace—energy conservation, fuel 

substitution, etc. 

2012-08-054_000000000001072
Carbon Tax: Deficit Reduction 

CRS-11 

Table 3. Estimated Taxes Levied on Fossil Fuels and Motor Gasoline Based on Selected Carbon 

Carbon Tax Ratea Coal Crude Oil Natural Gas 

$5/ mtCO2

$9.50/

short ton 

$2.15/ 

barrel 

$0.25/

mcfb

$15/ mtCO2

$28.50/

short ton 

$6.45/ 

barrel 

$0.75/

mcf 

$25/ mtCO2

$47.50/

short ton 

$10.75/ 

barrel 

$1.25/

mcf 

$50/ mtCO2

$95.00/

short ton 

$21.50/ 

barrel 

$2.50/

mcf 

CO2 Emissions Intensities Used in Above Comparison 

Metric tons of CO2 (mtCO2) 

per unit of fuel 

1.9 mtCO2/

short tonc

0.43 mtCO2/ 

barreld

0.05 mtCO2/

mcfe

Recent Market Prices for Each Fuel Type: Average Price Between 2000-2010 (2005 dollars) 

Coal Type ($/short ton)g

Bituminous coal: $37 

Sub-bituminous: $9 

Lignite: $14 

Anthracite: $48 

Production Location($/barrel) 

Domestic first purchase price:h $47 

Import landed costs:i $48 

Economic Sector ($/mcf) 

Residential: $11 

Commercial: $10 

Industrial: $6 

Transportation: $8 

Electric power: $6 

Source: Prepared by CRS. CRS calculated the estimated taxes for each fuel by multiplying a carbon tax rate by the CO2 emissions intensities fo

these inputs (the last row of the table) from the CO2 coefficients (i.e., CO2 emissions per quadrillion BTU) and thermal conversion factors (i.e.

fuel. CO2 coefficients are from EIA, “Emissions Factors and Global Warming Potentials,” updated January 2011, at http://www.eia.gov/oiaf/1605

thermal conversion factors from EIA, Annual Energy Review 2010, October 2011, Appendices A1 (motor gasoline), A2 (crude oil), A4 (natural ga

Fuel prices: Coal prices from EIA, Annual Energy Review 2010, Table 7.9, October 2011. Crude oil prices from Table 5.18 (domestic) and Table converted the nominal dollar values in Table 5.19 to $2005, using the GDP implicit price deflator provided in Appendix D of the Annual Energy 

prices from Table 6.8. Gasoline prices from Table 5.24. a. The tax rates in the table were selected for comparison purposes. The initial carbon tax rates in recent legislative proposals fall within the 

proposals include annual rate increases, some of which generating tax rates that would approach the upper end of the range after several y

b. MCF is thousand cubic feet. 

20
Carbon Tax: Deficit Reduction 

CRS-12 

c. This value represents the CO2 coefficient for coal (electric power sector) and the thermal conversion factor for coal consumption from th

(2010). 

d. This value represents the CO2 coefficient for crude oil and the thermal conversion factor for “unfinished oil.” 

e. This value represents CO2 coefficient for natural gas (“weighted national average”) and the thermal conversion factor for end-use sectors 

f. This value represents the CO2 coefficient for “motor gasoline” and the thermal conversion factor for motor gasoline (conventional). 

g. Bituminous and Subbituminous coal, in aggregate, accounted for 93% of U.S. coal production in 2010 (EIA, Annual Energy Review 2010, Tabl

h. EIA defines this price as “the price for domestic crude oil reported by the company that owns the crude oil the first time it is removed fro

(Annual Energy Review 2010, Glossary). 

i. EIA defines this price as “Crude Oil Landed Cost: The price of crude oil at the port of discharge, including charges associated with purcha

insuring a cargo from the purchase point to the port of discharge. The cost does not include charges incurred at the discharge port (e.g., iwharfage charges, and demurrage).” (Annual Energy Review 2010, Glossary). 

20
Carbon Tax: Deficit Reduction and Other Considerations 

Congressional Research Service 13 

Framework for Evaluation 

Policymakers may consider a carbon tax based on a number of policy motivations and potential 

benefits, including 

• increased federal revenues, 

• reduced federal budget deficits, 

• reduced GHG emissions, climate change, and ocean acidification,32

• enhanced energy security, 

• improved economic efficiency, and/or 

• reduced tax rates from other revenue sources. 

In recent years in the United States, most carbon tax proposals have aimed primarily to 

discourage GHG emissions.33 In these proposals, a tax or fee would be levied on GHG emissions 

or the inputs (i.e., fossil fuels) that lead to emissions. The tax or fee raises the price of the 

emission-generating products, and therefore can, on the one hand, motivate suppliers to reduce 

the emissions involved in making the product and, on the other hand, encourage consumers to 

buy less of the product. This policy instrument sets the tax (cost) per unit of emissions and relies 

on private decision-makers to find the most efficient means to reduce the emissions. A carbon tax 

is one of several “market mechanisms” that relies on the efficiencies of markets to maximize costeffectiveness. 

Though this policy instrument is commonly called a “carbon tax,” its application could be 

broader than this term suggests. First, the policy may apply not just to CO2 emissions, but also to 

multiple GHGs (e.g., methane or sulfur hexafluoride), including some that may have no 

molecular carbon.34 Second, if the levy’s primary purpose were to charge those who use the 

atmosphere to absorb the full cost of their GHG emissions, the levy might instead be considered a 

“user fee.”35 Regardless, this report uses the term “carbon tax,” because this report focuses on the 

policy instrument’s potential to raise revenues and reduce the federal budget deficit. 

 

32 For explanation of how carbon emissions may acidify oceans and the potential effects, see CRS Report R40143, 

Ocean Acidification, by Eugene H. Buck and Peter Folger. 

33 Most legislative attention to reduce GHG emissions, however, has been given to emissions cap-and-trade schemes 

and tax incentives. See for example, CRS Report R40242, Carbon Tax and Greenhouse Gas Control: Options and 

Considerations for Congress, by Jonathan L. Ramseur; CRS Report R40556, Market-Based Greenhouse Gas Control: 

Selected Proposals in the 111th Congress, by Brent D. Yacobucci, and Jonathan L. Ramseur. For other policy 

instruments, see CRS Report R41973, Climate Change: Conceptual Approaches and Policy Tools, by Jane A. Leggett, 

and CRS Report R41769, Energy Tax Policy: Issues in the 112th Congress, by Molly F. Sherlock and Margot L. 

Crandall-Hollick. 

34 Non-carbon GHGs could be subject to the tax based on their contribution to global warming in relation to CO2. 

Global warming potential (GWP) is an index of how much a GHG may contribute to the average annual increase in 

worldwide temperature integrated over a period of time, typically 100 years but sometimes as short as 20 years. GWPs 

are used to compare gases to carbon dioxide, which has a GWP of 1. For example, methane’s GWP is 25, and is thus 

25 times more potent a GHG than CO2. The GWPs listed in this report are from: Intergovernmental Panel on Climate 

Change, Climate Change 2007: The Physical Science Basis, 2007, p. 212. 

35 The Congressional Budget Office defines user charges as fees or taxes that are based on benefits individuals or firms 

receive from the federal government or that in some way compensate for costs they might impose on society or its 

(continued...) 

2012-08-054_000000000001075
Carbon Tax: Deficit Reduction and Other Considerations 

Congressional Research Service 14 

There are a number of issues to be considered when evaluating tax policy proposals.36 The 

following sections analyze a generic carbon tax option using the criteria listed below: 

• adequacy—the ability to generate a desired amount of revenues; 

• economic efficiency—the potential to enhance or diminish the productivity of the 

U.S. economy; 

• equity—the subjective determination of a proposal’s fairness; 

• operability—the combination of multiple factors, including administrative ease, 

transparency, avoidance of perverse outcomes, and consistency with federal and 

international norms and standards;37 and 

• political feasibility—the likelihood of enactment given a tax’s visibility to the 

public and public opinion, differential regional implications, contribution to 

deficit reduction or other objectives, pledges made by some lawmakers not to 

raise taxes, etc.38

Adequacy—The Potential to Generate Revenues 

The revenues that would be generated under a carbon tax vary greatly depending on the design 

features of the tax, namely the tax scope (i.e., base) and rate, as well as such independent factors 

as prices in global energy markets. Several recent proposals to price or tax carbon, where revenue 

estimates are available, are presented below. 

In 2011, the Congressional Budget Office (CBO) evaluated a hypothetical cap-and-trade program 

in which CO2 emission allowances (i.e., permits to emit one metric ton of CO2 emissions) would 

be sold at auction and traded in a carbon market. The auction revenues generated in this program 

would be analogous to tax revenues under a carbon tax system. CBO estimated the allowance 

price, which, under an actual program, would be determined by market forces, would begin at 

$20 per metric ton of CO2 (mtCO2) in 2012 and increase 5.6% annually. This allowance price 

estimate, and its projected annual increase, is akin to a prescribed carbon tax rate. CBO estimated 

that such a regime would raise $1.2 trillion over the 2012 to 2021 budget window (Table 4). 

 

(...continued) 

resources. See Congressional Budget Office, The Growth of Federal User Charges, August 1993. See also GAO, 

Federal User Fees: A Design Guide, GAO-08-386SP, May 2008. 

36 See, for example, the evaluation criteria identified in American Institute of CPAs. “AICPA Tax Policy and Tax 

Reform Materials: No.1 Guiding Principles of Good Tax Policy: A Framework for Evaluating Tax Proposals”, 2001, 

available at http://www.aicpa.org/INTERESTAREAS/TAX/RESOURCES/TAXLEGISLATIONPOLICY/Pages/

TaxReform.aspx. 

37 See this categorization in, for example, Joseph T. Sneed, “The Criteria of Federal Income Tax Policy,” Stanford Law 

Review 17, no. 4 (April 1, 1965) pp. 567-613; B.G. Peters, The Politics of Taxation: A Comparative Perspective, 1991, 

at http://www.tau.ac.il/law/cegla3/tax2/9%20The%20Politics%20of%20Taxation%20-%20Peters.pdf. 

38 For example, the Taxpayer Protection Pledge promoted by the Americans for Tax Reform interest group; 

Information at http://www.atr.org/taxpayer-protection-pledge and http://www.atr.org/about-grover. 

2012-08-054_000000000001076
Carbon Tax: Deficit Reduction and Other Considerations 

Congressional Research Service 15 

Table 4. Estimated Revenues from a CBO CO2 Emissions Pricing Model 

$20/mtCO2 in 2012, increasing 5.6% annually (billions of dollars) 

 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012-2016 2012-2021 

Revenues 88 93 99 105 112 119 127 136 144 154 499 1,179 

Source: Congressional Budget Office, Reducing the Deficit: Spending and Revenue Options, Washington, DC, March 

2011, pp. 205-206. 

Notes: The CBO assessment does not precisely describe the scope of its carbon tax scenario (i.e., which 

industries would be covered). Also, estimated revenues reflect reductions in income and payroll tax revenues 

that would result from the effects of a charge for emitting carbon.

As a point of reference for the above carbon tax revenue estimates, Figure 2 identifies the major 

sources of federal receipts in FY2011. As the figure illustrates, the range of potential carbon tax 

revenues is comparable (at least in the early years of the carbon tax system) to the revenues 

collected from current federal excise taxes. Nearly half of all federal excise tax receipts come 

from taxes on gasoline and diesel fuels.39

Legislation introduced in the 112th Congress, the Save Our Climate Act of 2011 (H.R. 3242), 

would establish a carbon tax on domestic and imported fossil fuels, as well as the carbon content 

of biomass, municipal solid waste, and any organic material used as fuel. The tax rate would 

begin at $10 per short ton40 of CO2 emissions (tCO2), increasing by $10 annually until total U.S. 

CO2 emissions are 20% or less of CO2 emissions in 1990. The bill states that it would reduce the 

federal budget deficit by a $480 billion over ten years. 

Other revenue estimates have been made in recent years of carbon taxes considered or included in 

a number of deficit and debt reduction proposals.41 As one example, in 2010, the bipartisan Debt 

Reduction Task Force (Domenici-Rivlin) considered, but did not ultimately recommend, a tax on 

CO2 emissions. The report estimated that a tax of $23 per ton of CO2 emissions starting in 2018, 

increasing 5.8% annually, would raise approximately $1.1 trillion in cumulative revenues through 

2025.42

 

39 For data on federal excise tax collections, see Internal Revenue Service (IRS), Statistics of Income (SOI) Historical 

Table 20, http://www.irs.gov/taxstats/article/0,,id=175900,00 html. 

40 In this proposal, a ton is a short ton, or 2,000 pounds. Most of the more recent proposals and models use metric tons 

(or tonnes), which are 2,240 pounds. 

41 The Committee for a Responsible Federal Budget’s (CRFB) online comparison tool is a good starting point for 

comparing various debt and deficit reduction proposals. This tool is available at http://crfb.org/compare/. 

42 Bipartisan Policy Center, Restoring America’s Future: Reviving the Economy, Cutting Spending and Debt, and 

Creating a Simple, Pro-Growth Tax System, November 2010, http://bipartisanpolicy.org/projects/debt-initiative/about. 

2012-08-054_000000000001077
Carbon Tax: Deficit Reduction and Other Considerations 

Congressional Research Service 16 

Figure 2. FY2011 Federal Receipts by Source 

FY2011 

Total Receipts:

$2.3 trillion

Social Insurance and 

Retirement Receipts

$819 billion (36%)

Individual Income Taxes

$1,091 billion (47%)

Corporate Income Taxes

$181 billion (8%)

Excise Taxes

$72 billion (3%)

Other

$140 billion (6%)

FY2011 

Total Receipts:

$2.3 trillion

Social Insurance and 

Retirement Receipts

$819 billion (36%)

Individual Income Taxes

$1,091 billion (47%)

Corporate Income Taxes

$181 billion (8%)

Excise Taxes

$72 billion (3%)

Other

$140 billion (6%)

Source: Prepared by CRS with data from Office of Management and Budget, Historical Tables 2.1 and 2.2, at 

http://www.whitehouse.gov/omb/budget/historicals. 

In addition to a carbon tax design, a 2012 Resources for the Future (RFF) study43 identified 

several factors—electricity demand and natural gas prices—that could influence carbon tax 

revenue. The study found that the magnitude of these factors’ influence increases as the tax rate 

increases. Figure 3 illustrates the RFF study findings. 

In Figure 3, RFF compares tax revenue estimates using assumptions from EIA’s 2009 and 2011 

Annual Energy Outlook (AEO) publications. According to the study, the AEO assumptions 

regarding future electricity demand and fuel prices, namely natural gas, varied dramatically 

between the 2009 and 2011 versions. These variances lead to different estimates of potential 

carbon tax revenue. For example, as illustrated in Figure 3, estimated revenues in 2020 from a 

tax rate of $25/mtCO2 would vary across scenarios by about $10 billion. A $40/mtCO2 tax rate 

would generate an estimated revenue range across scenarios of almost $20 billion in 2020. 

 

43 Karen Palmer et al., The Variability of Potential Revenue from a Tax on Carbon, Resources for the Future, May 

2012. 

2012-08-054_000000000001078
Carbon Tax: Deficit Reduction and Other Considerations 

Congressional Research Service 17 

Further, Figure 3 highlights a key result of a carbon tax that may affect its ability to provide a 

reliable source of revenue. Note that the tax revenues in the electricity sector begin to decline 

around 2030 with the $40/mtCO2 tax rate. The study concluded this decline is due to a 

diminishing reliance on fossil fuels and relatively greater reliance on low-carbon energy sources, 

such as renewables and nuclear. 

The projected scenario in Figure 3 highlights a fundamental revenue adequacy concern 

associated with a carbon tax approach: if a primary goal of a carbon tax is to reduce its own tax 

base (i.e., carbon emissions), would this tax provide a reliable stream of revenues over time? With 

revenue reliability as a primary goal, governments impose taxes on activities to which producers 

and consumers are not very price-sensitive. In other words, the imposed taxes lead to minimal 

changes in market behavior. Researchers debate how much producers and consumers would 

respond to a tax on GHG emissions by reducing emissions or switching to goods and services that 

generate fewer emissions (because they embody lower taxes). With a higher degree of 

responsiveness, either revenues would decline or the tax rate per ton of emissions would need to 

increase over time to maintain the revenue stream (assuming that maintaining certain revenue 

stream is determined to be a policy objective). 

Figure 3. Annual Carbon Tax Revenues in the Electricity Sector

Billions of 2009$ 

Source: Karen Palmer et al, The Variability of Potential Revenue from a Tax on Carbon, Resources for the Future, 

May 2012. 

Notes: AEO09 and AEO11 refer to EIA’s 2009 and 2011 Annual Energy Outlook. The carbon taxes are levied on 

metric tons of CO2 emissions (mtCO2), with rates starting in 2016 and growing 5% annually. 

2012-08-054_000000000001079
Carbon Tax: Deficit Reduction and Other Considerations 

Congressional Research Service 18 

Economic Efficiency 

Economic theory suggests that a carbon tax could improve the efficiency of the economy by at 

least three means:44

• First, markets could produce a more optimal mix of goods and services if the 

costs of emitting GHG while manufacturing products, providing services, or 

using goods were “internalized” into market prices; producers and consumers 

would more fully respond to the full costs of their decisions, resulting in a more 

economically efficient outcome; 

• Second, a tax on an activity that yields pollutants, such as GHG emissions,45

would discourage the polluting activity and therefore could be more efficient than 

an alternative tax that yields the same revenues but discourages a beneficial 

activity (e.g., investment); and 

• Third, adding a smaller tax on a new activity, such as potential carbon emissions, 

could be less distortionary to production and consumption than increasing the tax 

rate on currently taxed activities.46

The difficulty associated with setting an optimal carbon tax rate makes achieving potential 

efficiency gains challenging. Further, a stand-alone carbon tax (e.g., one where revenues were not 

used to offset other taxes) could have efficiency costs, as a carbon tax would increase existing 

distortions on inputs in the production process. The difficulty of implementing an efficiencyenhancing carbon tax is compounded in a tax system that already contains a number of 

distortionary taxes.47 

Many Taxes Have Distortionary Effects48

Many people are concerned about several potentially “distortionary” effects of taxes on society. 

Many economists consider that taxes take money away from people and change the relative prices 

of goods and services compared to what they would be without taxes; thus, taxes are considered 

“distortionary” by altering free market decisions. To minimize distortions (and generate a reliable 

stream of revenues), governments often prefer to tax products or activities for which consumer 

 

44 Achieving economic efficiency means using limited resources such that the production of goods and services is 

maximized at the lowest possible cost. 

45 Though some people contend that GHG emissions may not pose adverse risks, this is the view of a minority of 

scientific and economic experts in the field of climate change, and the suggestion of no adverse risk is not supported by 

empirical evidence to date. 

46 This assumes that a new tax on carbon would ultimately apply to a broader base, and not simply compound existing 

distortions to labor and capital that exist in the current tax system. A stand-alone carbon tax could compound existing 

tax-induced distortions in labor markets, for example. Thus, a carbon tax could have efficiency costs to the extent that a 

carbon tax further reduces labor supply. 

47 For an extensive theoretical exposition of conditions under which a carbon tax can enhance economic efficiency, see 

A. Lans Bovenberg and Lawrence H. Goulder, “Environmental Taxation and Regulation,” in Handbook of Public 

Economics, ed. Alan J. Auerback and Martin Feldstein, vol. 3 (Elsevier, 2002), pp. 1471-1545. 

48 A head tax, or a lump-sum tax levied on individuals regardless of income or wealth, is considered a non-distortionary 

tax since individuals cannot avoid the tax by changing their behavior. Since most taxes can be avoided with changes in 

behavior, non-distortionary taxes often do not exist in practice. 

2012-08-054_000000000001080
Carbon Tax: Deficit Reduction and Other Considerations 

Congressional Research Service 19 

demands are relatively insensitive to price increases.49 Some of these taxed items are recognized 

as essential or socially desirable, such as income, employment, and investment. Taxes may also 

be “distortionary” because they discourage a taxed but beneficial activity. For example, many 

economists argue that payroll and income taxes are distortionary because they discourage 

employment and investment.50 If these taxes were reduced, the incentives to hire/work and invest, 

they argue, would be greater. 

Also, as tax rates (i.e., the tax per unit of a product or service) increase, they become more

distortionary. That is, higher tax rates have greater potential to shift choices away from optimal 

“free market” outcomes. As an example, consumers may respond proportionately more strongly 

to a $1.00 tax per gallon on gasoline than a $0.20 tax per gallon (in other words, the efficiency 

losses associated with a tax increase exponentially with the tax rate). Thus, applying lower tax 

rates to broader tax bases can help minimize inefficiencies.51

Taxes May Correct Market Failures 

Not all results from economic activity are considered desirable—pollution being one example. 

When producers or consumers discharge pollution—including GHG emissions—to another 

person’s private property or a publicly shared resource—such as the atmosphere—without paying 

to do so, they are not paying for the full cost of a product or activity. Economists would describe 

this outcome as a “market failure,” because the costs associated with GHG emissions are not 

captured in the economic decision process. Economists contend that levying a charge on GHG 

emission would be an economically efficient way to correct the failure.52 For example, in terms of 

environmental policy, fossil fuel prices do not reflect the costs—related to climate change and 

ocean acidification damages—associated with the GHG emissions. A pollution discharge fee 

could internalize these external costs into market prices. 

A primary argument in favor of a carbon tax is that it would, in theory, increase the efficiency of 

markets by discouraging “bad” activities. A carbon tax would discourage pollution that imposes 

costs on others who do not necessarily benefit from the polluting activity. These may include 

future generations that bear the dislocations of climate change, or fishery sectors in developing 

countries that experience lower yields in acidified oceans. 

A carbon tax would encourage energy consumers—for example, power plants, industry, 

households, etc.—to (1) switch to less carbon-intensive fuels; (2) use less energy or use energy 

more efficiently; and (3) prefer products or services that are lower-priced by virtue of 

incorporating less emission tax. Each of these activities would reduce GHG emissions compared 

to a business-as-usual track and could improve economic efficiency. 

 

49 In economics parlance, a small response of consumer demand may be termed “price inelastic.” 

50 See, e.g., Gilbert Metcalf, A Green Employment Tax Swap: Using a Carbon Tax to Finance Payroll Tax Relief, 2007; 

Nathaniel Keohane and Sheila Olmstead, Markets and the Environment (Island Press, 2007); Ian Parry “Fiscal 

Interactions and the Case for Carbon Taxes over Grandfathered Carbon Permits,” in Climate Change Policy, Dieter 

Helm, editor, (Oxford University Press, 2005). 

51 A theoretical exposition illustrating how marginal distortionary effects rise with the rate of taxation can be found in 

Jonathan Gruber, Public Finance and Public Policy (New York: Worth Publishers, 2007), pp. 584-585. 

52 Imposing regulations can also correct for market failures. 

2012-08-054_000000000001081
Carbon Tax: Deficit Reduction and Other Considerations 

Congressional Research Service 20 

An Economically Efficient Carbon Tax Rate53

To improve efficiency, a carbon tax would need to be set at the “right” level. According to basic 

economic theory, the “right” level would be one that equilibrates the tax rate to the incremental 

harm, now and in the future, that a ton of GHG emissions imposes. To find this tax rate precisely, 

one would need to know the marginal costs of climate change and ocean acidification. 

However, estimating the effects and placing a monetary value on them is both controversial and 

reliable only over a wide range. Hence, no consensus is likely to emerge regarding a precisely 

“right” carbon tax rate.54 An analytical or political estimate is feasible but may not be the most 

economically efficient outcome. Further, setting carbon tax rates based on revenue needs for 

deficit reduction, or some other purpose, would not necessarily result in setting a rate that is 

proportional to the incremental harm of GHG emissions. 

Equity 

The “equity” or “fairness” of taxes can be evaluated by looking at how different parties are 

affected. How the burden of a tax is ultimately divided between different parties is described as 

the economic incidence of the tax.55 To evaluate the subjective concepts of “equity” and 

“fairness” in tax policy, economists often examine two different types of equity: vertical and 

horizontal. In addition, some economists consider individual and generational equity. A complete 

policy analysis might consider the potential trade-off between economic efficiency and equity.56

These four elements of tax equity are discussed below. 

Vertical Equity 

The notion of vertical equity suggests that those with a greater ability to pay should contribute 

more. Without some of tax revenue redistribution, carbon taxes are generally considered to be 

“regressive,” because lower-income households generally spend a higher percentage of their 

income on energy-related goods and services than do higher-income households.57 The actual or 

perceived regressivity of carbon or fuel taxes can have a strong influence on the political 

feasibility of the instrument.58 For example, the coalition of advocates for low-income people and 

opponents of energy taxes arguably contributed to the failure of President Clinton’s 1993 “Btu 

Tax” proposal (see the text box above), which was introduced as part of a deficit reduction 

package. 

 

53 A related discussion appears in the “Rate of Taxation” section above. 

54 For more information on the challenges of estimating the environmental and health costs of GHG emissions, see 

CRS Report R41973, Climate Change: Conceptual Approaches and Policy Tools, by Jane A. Leggett. 

55 This is in contrast to the statutory incidence, where the statutory incidence falls on the person responsible for 

remitting the tax to the tax authorities. 

56 See CRS Report R41641, Reducing the Budget Deficit: Tax Policy Options, by Molly F. Sherlock. 

57 See CRS Report R40841, Assisting Households with the Costs of a Cap-and-Trade Program: Options and 

Considerations for Congress, by Jonathan L. Ramseur and Libby Perl. 

58 See Stephen Moore, “Federal Budget Issue: Do We Need an Energy Tax?” National Center for Policy Analysis, June 

1993, at http://www ncpa.org/pub/bg127?pg=4, as an example of expressed concerns. 

2012-08-054_000000000001082
Carbon Tax: Deficit Reduction and Other Considerations 

Congressional Research Service 21 

Particular carbon tax design elements could reduce its regressivity. For example, carbon tax 

revenues could be used to reduce other taxes (e.g., income) or be redistributed to lower-income 

households through a variety of funding mechanisms (see the section “Alternative Uses for 

Carbon Tax Revenues” below). 

Horizontal Equity 

Horizontal equity examines whether potential tax-payers with similar characteristics would 

receive equivalent tax treatment. Questions of horizontal equity may arise if particular industries 

or economic sectors that predominately emit non-CO2 GHG emissions (e.g., methane) were 

exempted from the carbon tax regime, while industries or sectors of comparable size were 

included based on their CO2 emissions.59

Individual Equity 

Some people consider taxes unfair when they involve government interference in private 

transactions, including freedom to use one’s resources as one chooses. This is sometimes 

considered a violation of “individual equity.” 60 To minimize infringement of individual equity, 

some would argue that taxes should be levied on, and commensurate with, the benefit an 

individual receives from the taxed activity, or “benefit taxation.”61 (Proponents contend that not to 

violate individual equity would require that the tax be voluntary.) Some might counter that a 

carbon tax is a kind of “benefit taxation,” levied on the benefit the carbon source receives by 

being allowed to discharge the pollution to the atmosphere. 

Generational Equity 

Are the burdens of taxation and benefits from governmental spending fairly distributed across 

generations? This is a particular concern in the context of the federal deficit and GHG-induced 

climate change, both of which would likely shift costs from the current generation to subsequent 

generations. At first glance, a carbon tax could potentially support generational equity by helping 

to slow or reduce GHG-induced climate change and by potentially reducing the deficit 

(depending on the fate of tax revenues). 

However, an assessment of generational equity is complex. Some may argue that a carbon pricing 

mechanism would reduce the wealth of the current generation, consequently reducing the 

productive capacities of future generations. Moreover, some may argue that, instead of a carbon 

price approach, increased investment in technology would yield greater benefits for future 

generations. Others may counter that increased investments today may result in increased 

 

59 During the debates of the 1993 Btu tax proposal, exemptions allowed to various interests may have contributed to a 

perception of its unfairness. For one view of the politics of the Btu tax debate and demise, see Dawn Erlandson, “The 

Btu Tax Experience: What Happened and Why It Happened,” Pace Environmental Law Review 12, no. 1, 1994. 

60 C. Eugene Steuerle, “And Equal (Tax) Justice for All?” in Tax Justice: The Ongoing Debate, edited by Joseph J. 

Thorndike and Dennis J. Ventry (Urban Institute Press, 2002). 

61 Discussions of individual equity and benefit taxation arise mostly in discussions of public finance for education, 

Social Security, and other kinds of programs that offer an explicit benefit. See, for example, American Academy of 

Actuaries, “Social Security Reform: Changes to the Benefit Formula and Taxation of Benefits” at 

http://www.actuary.org/pdf/socialsecurity/benefit_05.pdf; or Kent E. Portney, “Individual Equity And School Finance: 

Implications For Taxation And State Aid.” Journal of Education Finance 2, no. 2, 1976. 

2012-08-054_000000000001083
Carbon Tax: Deficit Reduction and Other Considerations 

Congressional Research Service 22 

consumption, providing minimal benefits for future generations and foregoing the opportunity to 

address climate change impacts. Such an outcome would disproportionately burden future 

generations. 

Operability 

Some tax options may be elegant in terms of economic theory but, in practice, present 

considerable logistical challenges. This section identifies some of the key administrative issues 

that might arise when implementing a carbon tax. 

Administrative Ease 

In previous debates over carbon taxes, which largely focused on discouraging GHG emissions, 

many proponents asserted that carbon taxes would be administratively simple compared to the 

principal emissions control alternatives—notably, a cap-and-trade program62 or emissions 

performance standards. As with other comparisons, the relative advantage of a carbon tax would 

depend on the designs of the instrument alternatives under scrutiny. 

Any new kind of tax would require new administrative systems, but a carbon tax system could 

potentially take advantage of existing frameworks. A well-developed administrative structure for 

collecting taxes already exists in the United States. In addition, approximately 13,000 facilities 

report annual GHG emissions to EPA.63 Therefore, EPA already collects carbon tax emissions 

data covering about 90% of all U.S. GHG emissions. However, a tax program would presumably 

be administered by the Department of the Treasury. Transferring data should not be technically 

difficult, but broader cooperation across agencies would likely be necessary to share respective 

expertise and to promote compliance. 

Consistency with Federal and International Norms and Standards 

Policymakers might consider the degree to which a carbon tax is consistent with other policies 

that support other objectives: pollution control, energy affordability, national security. 

Superficially, carbon taxes would seem to be consistent with other GHG emission control 

standards, but would conflict with incentives to make fossil fuels more affordable. 

In terms of linking a U.S. GHG emission reduction scheme with international efforts, a carbon tax 

may be at a disadvantage, because the most prominent international activity, namely the European 

Union’s Emission Trading Scheme,64 currently involves a cap-and-trade approach. 

 

62 A cap-and-trade system is arguably is more administratively complex than a tax. However, both systems, if they 

apply to all GHG and all large sources of emissions, involve many components. Moreover, as policymakers include 

more flexible design elements—primarily to improve efficiency and control price volatility—a cap-and-trade program 

would increase in complexity. It would be more costly to administer; more open to exploitation (for example, by traders 

of derivative financial instruments); potentially less transparent; and harder for regulators to ensure compliance. 

63 EPA’s Greenhouse Gas Reporting Program in 40 CFR Part 98. 

64 See CRS Report R42392, Aviation and the European Union’s Emission Trading Scheme, by Jane A. Leggett, Bart 

Elias, and Daniel T. Shedd. 

2012-08-054_000000000001084
Carbon Tax: Deficit Reduction and Other Considerations 

Congressional Research Service 23 

Potential Perverse Effects 

Some carbon pricing policies may yield unexpected and unwelcome results. For carbon taxes, one 

such “perverse effect” would be the potential to increase the cost of business activity in the 

United States. Over time, this could result in reduced revenue from both the carbon tax and other 

taxes.65 This consideration has led some other countries to exempt energy-intensive 

manufacturers in specific or strategic sectors from energy or carbon taxes.66 

In addition, a carbon tax could lead to emissions “leakage,” if businesses moved operations 

overseas to avoid the tax. This outcome would depend on a number of factors, however, including 

relative fuel mixes, efficiencies of power production and transportation, border taxes, etc. 

Transparency 

Tax policies that are transparent may be more likely viewed as fair, as taxes being paid are 

understood by those responsible for paying the tax. In recent years, many have grown more 

skeptical of complex financial structures.67 Potential complexity and opaqueness of a cap-andtrade program was one factor that led some advocates of GHG control policies to prefer carbon 

taxes as a policy instrument. 

While a carbon tax could be designed to be simple and transparent, Congress could also choose to 

establish a carbon tax framework that rivals the complexity of a cap-and-trade program. For 

instance, policymakers could provide subsidies or exemptions to the fossil fuel industry or certain 

consumers (e.g., agricultural users) or enact incentives for producing, processing, and exporting 

fossil fuels. In addition, policymakers could allow for tax credits for carbon sequestration 

projects, similar to carbon offsets in a cap-and-trade regime.68 As with carbon offsets in a capand-trade program, this would require a further level of administrative responsibilities, and 

potentially weaken the program.69

Ironically, transparency, particularly in regards to costs, could be a political liability for a carbon 

tax. Although both a carbon tax and a cap-and-trade program would impose higher energy costs, 

the costs from a cap-and-trade program would be more difficult to estimate, because the market 

would determine the price of emission allowances (and thus the overall costs of the program). 

 

65 The CBO takes this into account when estimating net revenues from a carbon tax. 

66 See CRS Report R40936, An Overview of Greenhouse Gas (GHG) Control Policies in Various Countries, by Jane A. 

Leggett et al. 

67 See CRS Report RL34488, Regulating a Carbon Market: Issues Raised By the European Carbon and U.S. Sulfur 

Dioxide Allowance Markets, by Mark Jickling and Larry Parker. 

68 The tax code already contains provisions allowing tax credits for carbon sequestration (see Internal Revenue Code 

§45Q). 

69 See CRS Report RL34436, The Role of Offsets in a Greenhouse Gas Emissions Cap-and-Trade Program: 

Potential Benefits and Concerns, by Jonathan L. Ramseur. 

2012-08-054_000000000001085
Carbon Tax: Deficit Reduction and Other Considerations 

Congressional Research Service 24 

Political Feasibility 

Certain stakeholders are likely to exercise strong opposition to a carbon tax. These include 

energy-intensive manufacturers, farmers, and regional energy interests—especially those whose 

asset values may fall with expected impacts on profitability of owned or leased coal and oil 

resources. One may look to numerous reviews of the histories of both the Clinton Btu tax 

proposal and more recent cap-and-trade bills for lengthier views regarding political feasibility.70

Contribution to Deficit Reduction 

The possible contribution of a carbon tax to deficit reduction would depend on the magnitude and 

scope of the carbon tax, various market factors (discussed above), and assumptions about the size 

of the deficit. In August 2012, CBO released updated budget projections for fiscal years 2012 to 

2022. Under current law, CBO estimated the 10-year budget deficit at $2.3 trillion, or 1.1% of 

GDP.71 However, using an alternative fiscal scenario,72 CBO’s projected a larger deficit—$10.0 

trillion, or 4.9% of GDP. 

Enacting the carbon tax options discussed in the previous section could reduce future budget 

deficits. As illustrated in Figure 4, a $20/mtCO2 price on carbon (increasing by 5.6% annually) 

would have a considerable impact on budget deficits using CBO’s August 2012 baseline 

projection. 

• The 10-year budget deficit could be reduced from $2.3 trillion to $1.1 trillion, or 

from 1.1% to 0.5% of GDP. 

• Overall, a $20/mtCO2 price on carbon would reduce the 10-year budget deficit by 

more than 50%. 

Under CBO’s alternative fiscal scenario, the same carbon tax would have a smaller impact on 

budget deficits. 

• The deficit would be reduced from $10.0 trillion to $8.8 trillion, or from 4.9% to 

4.4% of GDP. 

• Overall, a $20/mtCO2 price on carbon would reduce the 10-year budget deficit by 

about 12%. 

 

70 See, for example, Dawn Erlandson, “The Btu Tax Experience: What Happened and Why It Happened” Pace 

Environmental Law Review 12, no. 1 (Fall 1994); Lisa Lerer, “Is Cap and Trade Dems’ Next ‘BTU’?” Politico, July 13, 

2009; Joseph E. Aldy and Robert N. Stavins, “Using the Market to Address Climate Change: Insights from Theory and 

Experience,” National Bureau of Economic Research Working Paper Series No. 17488 (2011). 

71 The 10-year budget deficit covers fiscal years 2013 through 2022. 

72 This scenario assumes that (1) most expiring tax provisions are extended and the Alternative Minimum Tax (AMT) 

is adjusted for inflation, (2) Medicare’s payment rates for physicians’ are held constant at current levels, and (3) that 

the automatic spending reductions required by the Budget Control Act (BCA) do not occur. 

2012-08-054_000000000001086
Carbon Tax: Deficit Reduction and Other Considerations 

Congressional Research Service 25 

Figure 4. CBO Estimated Revenues from a $20/mtCO2 Carbon Tax Compared to 

Two CBO Budget Deficit Projections 

FY2013-FY2022 

-1,400

-1,200

-1,000

-800

-600

-400

-200

0

200

400

2013201420152016201720182019202020212022

Billions of Dollars

August 2012 Baseline Alternative Fiscal Scenario Carbon Tax Revenue

Source: Prepared by CRS. Carbon tax revenue estimates from CBO, Reducing the Deficit: Spending and Revenue 

Options, Washington, DC, March 2011, pp. 205-206; Budget deficit estimates from CBO, An Update to the Budget 

and Economic Outlook: Fiscal Years 2012 to 2022, August, 2012. 

Notes: The 2012 baseline estimates are based on current law. The alternative scenario assumes that (1) most 

expiring tax provisions are extended and the Alternative Minimum Tax (AMT) is adjusted for inflation, (2) 

Medicare’s payment rates for physicians’ are held constant at current levels, and (3) that the automatic spending 

reductions required by the Budget Control Act (BCA) do not occur. Revenues from the carbon tax are assumed 

to start in FY2013. 

Carbon tax proposals that raise less revenue would contribute less to deficit reduction. The Save 

Our Climate Act of 2011 (H.R. 3242) states that this legislation would reduce the deficit by $480 

billion over the 10-year budget window. Relative to the CBO’s alternative fiscal scenario, the 

$480 billion would reduce the budget deficit by 4.8%, from an estimated $10.0 trillion to roughly 

$9.5 trillion, or 4.9% to 5.7% of GDP. 

The analysis above assumes that 100% of carbon tax revenue would be applied toward deficit 

reduction. The following section explores possible alternative uses for carbon tax revenues. 

2012-08-054_000000000001087
Carbon Tax: Deficit Reduction and Other Considerations 

Congressional Research Service 26 

Alternative Uses for Carbon Tax Revenues 

Carbon tax revenues may be used to achieve a variety of policy goals. However, one revenue use 

necessarily forgoes the opportunity to apply that level of revenue to support other objectives, like 

deficit reduction. Therefore, in deciding how to allocate carbon tax revenues, policymakers would 

encounter trade-offs among objectives. Such trade-offs include 

1. minimizing economy-wide costs resulting from a carbon tax;73

2. alleviating the costs borne by subgroups in the U.S. population, regions, 

economic sectors, and generations; and 

3. supporting specific policy objectives, such as deficit reduction, climate change 

mitigation, energy efficiency, technological advances, domestic employment, or 

energy diversity. 

A comprehensive discussion of alternative uses of carbon tax revenues and the involved tradeoffs is beyond the scope of this report.74 Three possible options, which have received some 

attention in recent years, are discussed below. 

Distribute Carbon Tax Revenues to Households 

If Congress were to consider a carbon tax system, a key debate would likely involve the degree to 

which carbon tax revenues would be returned to households to alleviate the expected financial 

burden imposed by the carbon tax.75 A 2007 study estimated that households and businesses that 

are end users would experience the vast majority (89%) of the private costs under a carbon 

pricing regime (the remaining 13% was attributed to coal, oil, and gas producers and fossil 

electricity generators).76 Moreover, businesses—to the extent they were able—would likely pass 

through to household consumers some of their increased energy/electricity costs in the form of 

higher prices for their goods and services. Costs that are not passed through to consumers in the 

form of higher prices are borne by either labor, through reduced wages, or owners of capital, 

through reduced returns on investment. 

Depending on how and to whom carbon tax revenues are distributed, lower-income households 

could face a disproportionate increase in tax burden. As illustrated in Table 5, a carbon tax “in 

isolation” (i.e., without revenue redistribution of some kind) could have a disproportionately 

greater impact on lower-income households than higher-income households—a regressive 

 

73 One way to interpret this efficiency objective would be to maximize growth of GDP, though other measures of 

broader well-being may be an alternative. However, even using a narrow GDP measure would involve decisions about 

whether economic efficiency pertains to the United States only or international efficiency, or to current taxpayers 

versus future generations. 

74 For more information, see CRS Report R40242, Carbon Tax and Greenhouse Gas Control: Options and 

Considerations for Congress, by Jonathan L. Ramseur and Larry Parker; and CRS Report R40841, Assisting 

Households with the Costs of a Cap-and-Trade Program: Options and Considerations for Congress, by Jonathan L. 

Ramseur and Libby Perl. 

75 This issue received considerable attention during the debate over H.R. 2454 (“Waxman-Markey”) in the 111th

Congress. H.R. 2454, which passed the House on June 26, 2009, would have, among other things, established a price 

on GHG emissions through a cap-and-trade system. 

76 National Commission on Energy Policy, Allocating Allowances in a Greenhouse Gas Trading System, 2007. 

2012-08-054_000000000001088
Carbon Tax: Deficit Reduction and Other Considerations 

Congressional Research Service 27 

outcome.77 As Table 5 illustrates, a carbon tax in isolation would reduce after-tax income for 

taxpayers in the lowest income deciles by 3.4%, while taxpayers in the highest income deciles 

would see their income fall by 0.8%.78 

The remaining rows in Table 5 show how the household impacts would change if carbon tax 

revenues were rebated to households using different rebate mechanisms.79 

• An equal lump-sum rebate of carbon tax revenues would be progressive, 

increasing incomes for those in the lowest income deciles relative to higherincome brackets.80 

• A payroll tax rebate for workers, in this case, would reduce but not eliminate the 

regressivity of the carbon tax. Lower-income households without individuals in 

the workplace would not receive a rebate under this approach.81

• Adding a rebate for Social Security recipients to the payroll tax rebate would 

address the lower-income households with individuals not in the workplace, and 

further enhance the progressivity of this policy option.82

In this scenario, both a lump-sum carbon tax rebate and a carbon tax rebate that includes Social 

Security recipients increase the after-tax income of lower-income households while decreasing 

the after-tax income of higher-income households. Using carbon tax revenues to reduce payroll 

taxes would increase the after-tax income of middle-income households, while lower-income 

households would see their after-tax income fall. 

 

77 As mentioned above, this is the expected outcome because lower-income households generally spend a higher 

percentage of their income on energy-related goods and services than do higher-income households. 

78 This study assumed a carbon tax of $15 per ton of CO2. 

79 For more information on these different mechanisms, see CRS Report R40841, Assisting Households with the Costs 

of a Cap-and-Trade Program: Options and Considerations for Congress, by Jonathan L. Ramseur and Libby Perl. 

80 The per-capita, lump-sum rebate amount assumed in this study was $274. 

81 The credit would cover the first $560 in payroll taxes (or first $3,660 of wages per covered worker, using 2003 data). 

82 Under this option, the maximum credit amount would be $420. 

2012-08-054_000000000001089
Carbon Tax: Deficit Reduction and Other Considerations 

Congressional Research Service 28 

Table 5. Distributional Effects of Carbon Tax with Different Applications of Carbon 

Tax Revenues 

Percentage Change in After-Tax Household Income by Income Bracket 

(1= Lowest, 10=Highest) 

Distributional Scenarios 1 2 3 4 5 6 7 8 9 10 

Carbon Tax in Isolation (before 

revenue redistribution) 

-3.4 -3.1 -2.4 -2.0 -1.8 -1.5 -1.4 -1.2 -1.1 -0.8 

Carbon Tax with a Lump-Sum 

Distribution to Households 

2.1 1.0 0.6 0.4 0.3 0.1 -0.1 -0.1 -0.2 -0.2 

Carbon Tax with Payroll Tax 

Rebate for Workers 

-0.7 -1.0 -0.2 0.1 0.1 0.3 0.2 0.2 0.0 0.0 

Carbon Tax with Payroll Tax 

Rebate for Workers and 

Equivalent Rebate for Social 

Security Recipients 

1.4 1.0 0.6 0.3 0.1 0.1 0.1 -0.1 -0.1 -0.2 

Source: Prepared by CRS with data from the following: Gilbert Metcalf, A Proposal for a U.S. Carbon Tax Swap: An 

Equitable Tax Reform to Address Global Climate Change (2007), The Hamilton Project, Brookings Institution. 

Note: These results do not account for consumers’ behavioral responses to the carbon tax. Metcalf points out 

that the results provide a “reasonable first approximation” of the different impacts to household incomes 

(Metcalf (2008)). 

Amongst the policies surveyed in Table 5, using carbon tax revenues to finance lump-sum rebates 

to households provides the most benefit to the lowest-income. While enhancing the progressivity 

of the overall tax system may be attractive from an equity perspective, lump-sum rebates to 

households offer limited potential for gains in overall economic efficiency. If carbon tax revenues 

are instead used to offset other distortionary taxes in the economy (i.e., payroll, income), the costs 

associated with a carbon tax may be reduced or eliminated. 

Studies that examine the distribution of a carbon tax rely on a number of modeling assumptions. 

Metcalf (2007), for example, assumes that the costs of the carbon tax are related to energy 

expenditure patterns across income groups. An alternative approach is to look at the distribution 

of the carbon tax, assuming that the carbon tax reduces returns to factors of production: labor, 

capital, and fossil fuel resources.83 Under this approach, the regressivity of a carbon tax is 

reduced. If the burden of the carbon tax falls more heavily on owners of capital, as opposed to 

labor, the carbon tax affects higher income households that tend to derive more of their income 

from capital. Further, lower income households that receive a larger share of their income from 

transfer payments (e.g., social security), would be less affected by a carbon tax. While the 

“baseline” distribution of a carbon tax (i.e., the distribution of a carbon tax absent revenue 

recycling) differs under various modeling assumptions, the general conclusions regarding 

different policy choices for uses of carbon tax revenues often remain the same. Lump-sum 

 

83 Studies that use this approach include Sebastian Rausch, et al., “Distributional Impacts of Carbon Pricing: A General 

Equilibrium Approach with Micro-Data For Households,” Energy Economics, vol. 33, no. 1 (March 2011) pp. S20-S33 

and Sebastian Rausch, et al., “Distributional Impacts of a U.S. Greenhouse Gas Policy: A General Equilibrium 

Analysis of Carbon Pricing,” in U.S. Energy Tax Policy, ed. Gilbert E. Metcalf (Cambridge University Press, 2011), pp. 

52-107. 

2012-08-054_000000000001090
Carbon Tax: Deficit Reduction and Other Considerations 

Congressional Research Service 29 

redistribution of carbon tax revenues tends to be more progressive, while policies that reduce 

payroll taxes tend to be less regressive than those that reduce taxes on income or capital. 84 

Address Economy-Wide Costs 

Some are concerned about potential economy-wide costs that a carbon tax would impose. 

Economy-wide costs, or macroeconomic costs, are often measured in terms of changes in 

projected gross domestic product (GDP) or another societal-scale metric, such as efficiency cost 

or welfare changes. 

A tax on carbon would likely lead to increased energy costs, which could reduce GDP growth.85

However, most measures of economic costs imposed by a carbon tax do not consider the climate 

change benefits or ancillary benefits86 that a carbon price would provide. The ultimate economic 

effects would depend on a number of factors, including the magnitude, design, and use of 

revenues of the carbon tax. 

Economic studies indicate that using carbon tax revenues to offset reductions in distortionary 

taxes—labor, income, and investment—would be the most economically efficient use of the 

revenues and yield the greatest benefit to the economy overall. Studies also conclude that using 

tax revenues to lower the federal deficit would yield an economy-wide benefit, because of the 

reduced need to impose distortionary taxes in the future.87 But this benefit would be delayed and 

its realization assumes policymakers would, sometime in the future, address the deficit by raising 

taxes. 

Using carbon tax revenues to offset other distortionary taxes is sometimes described as revenue 

recycling, a fiscal strategy that may yield a “double-dividend:”88 

1. reduced GHG emissions, achieved through the new carbon price, and 

2. reduced market distortions, achieved through lower taxes on desirable behavior. 

 

84 Sebastian Rausch, et al., “Distributional Impacts of a U.S. Greenhouse Gas Policy: A General Equilibrium Analysis 

of Carbon Pricing,” in U.S. Energy Tax Policy, ed. Gilbert E. Metcalf (Cambridge University Press, 2011), pp. 52-107. 

85 Although often used as an economy-wide measurement, GDP is an imperfect measure of the economy or society’s 

well-being. A classic example is that an epidemic may increase measured economic activity because of higher 

expenditures on health care, while reducing well-being. See also Organisation for Economic Co-operation and 

Development. How’s Life?: Measuring Well-Being. Paris, 2011; Mack Ott, “Limitation of NIA as a Gauge of Welfare” 

in The Concise Encyclopedia of Economics: National Income Accounts, Library of Economics and Liberty, at 

http://econlib.org/library/Enc/NationalIncomeAccounts html. 

86 For example, a reduction in GHG emissions from certain sectors may also entail a reduction in hazardous air 

pollutants, which could provide health-related benefits. 

87 Ian Parry and Robertson C. Williams III, Moving U.S. Climate Policy Forward: Are Carbon Taxes the Only Good 

Alternative? Resources for the Future, 2011; Warwick McKibben et al., The Potential Role of a Carbon Tax in U.S. 

Fiscal Reform, The Brookings Institution, 2012. 

88 For further information, see Ian Parry, “Fiscal Interactions and the Case for Carbon Taxes over Grandfathered 

Carbon Permits,” in Climate Change Policy (Dieter Helm, editor), 2005; and Lawrence H. Goulder, “Environmental 

Taxation and the Double Dividend: A Reader’s Guide,” International Tax and Public Finance, vol. 2, no. 2, 1995, pp. 

157-183. 

2012-08-054_000000000001091
Carbon Tax: Deficit Reduction and Other Considerations 

Congressional Research Service 30 

According to a 2011 study,89 economic literature90 generally finds that revenue recycling may 

reduce the economy-wide costs imposed by a carbon tax intended to reduce GHG emissions, but 

may not eliminate them entirely.91 However, the same 2011 study and a 2012 study both provide 

scenarios in which a carbon tax and revenue recycling would produce a net increase in Gross 

Domestic Product.92 In other words, these studies found that, in certain situations, that the 

economic improvements gained by reducing existing distortionary taxes would outweigh the 

costs imposed by the new carbon tax.93 In both studies, the potential benefits of reduced GHG 

emissions were not part of the calculation, largely because these estimates carry considerable 

uncertainty. 

For example, the 2012 study94 projected a net reduction in GDP and employment—a measure of 

economy-wide costs—when carbon tax revenues where used to (1) reduce the deficit, (2) provide 

lump-sum transfers to households, or (3) reduce payroll taxes. However, when carbon tax 

revenues were used to reduce marginal tax rates on capital income (e.g., the corporate tax), 

employment and GDP increased relative to the baseline. While using carbon tax revenues to 

reduce tax rates on capital may enhance economic efficiency, such policies would not offset the 

increased burden imposed by a carbon tax on low-income households.95

Assist Carbon-Intensive, Trade-Exposed Industries 

Carbon-intensive, trade-exposed industries would likely face disproportionate impacts within a 

U.S. carbon tax system. This issue received considerable attention during the debate over H.R. 

2454 in 2009 (the 111th Congress) and would likely receive similar attention if Congress were to 

consider establishing a carbon tax system. 

An industry’s carbon intensity is a function of both direct CO2 emissions from its manufacturing 

process (e.g., CO2 from cement or steel production) and indirect CO2 emissions from the inputs to 

 

89 Ian Parry and Robertson C. Williams III, Moving U.S. Climate Policy Forward: Are Carbon Taxes the Only Good 

Alternative? Resources for the Future, 2011. 

90 For example, the following reports found that a price or tax on carbon would have a small, but negative, impact on 

GDP growth: U.S. Energy Information Administration, Energy Market and Economic Impacts of H.R. 2454, the 

American Clean Energy and Security Act of 2009, Report #: SR-OIAF/2009-05, August 4, 2009, http://www.eia.gov/

oiaf/servicerpt/hr2454/background html and Congressional Budget Office, The Economic Effects of Legislation to 

Reduce Greenhouse-Gas Emissions, Washington, DC, September 2009, http://www.cbo.gov/sites/default/files/cbofiles/

ftpdocs/105xx/doc10573/09-17-greenhouse-gas.pdf. 

91 This is referred to as the “tax-interaction effect” in economic literature. See, e.g., Ian Parry, “Fiscal Interactions and 

the Case for Carbon Taxes over Grandfathered Carbon Permits,” in Climate Change Policy (Dieter Helm, editor), 2005. 

92 See, e.g., Ian Parry and Robertson C. Williams III, Moving U.S. Climate Policy Forward: Are Carbon Taxes the 

Only Good Alternative? Resources for the Future, 2011; Warwick McKibben et al., The Potential Role of a Carbon Tax 

in U.S. Fiscal Reform, The Brookings Institution, 2012. 

93 Note that this net economy-wide gain does not include benefits achieved by reducing GHG emissions. 

94 This study assumed a tax of $15 per ton of CO2, with the tax rate rising at 4% above inflation each year through 

2050. See Warwick McKibben et al., The Potential Role of a Carbon Tax in U.S. Fiscal Reform, The Brookings 

Institution, 2012 

95 For an analysis of the distribution of federal taxes, including corporate taxes, see Congressional Budget Office, The 

Distribution of Household Income and Federal Taxes, 2008 and 2009, Washington, DC, July 2012, 

http://www.cbo.gov/sites/default/files/cbofiles/attachments/43373-06-11-HouseholdIncomeandFedTaxes.pdf. The 

corporate tax is progressive, with 87.4% of the corporate tax burden attributable to the top two income quintiles. Since 

carbon taxes are regressive, and corporate taxes are progressive, using carbon tax revenues to reduce corporate taxes 

would tend to reduce the progressivity of the overall tax system. 

2012-08-054_000000000001092
Carbon Tax: Deficit Reduction and Other Considerations 

Congressional Research Service 31 

the manufacturing process (e.g., electricity, natural gas). In general, trade-exposed industries are 

those that face considerable international competition. A carbon tax would present a particular 

challenge for these industries. Compared to other domestic industries, they would be less able to 

pass along the tax in the form of higher prices, because they may lose global market share (and 

jobs) to competitors in countries lacking comparable carbon policies.96

To address these impacts, policymakers could distribute a portion of the carbon tax revenues to 

these industries. As one point of reference, under H.R. 2454 (111th Congress) such industries 

would have received approximately 15% of the emission allowance value—analogous to 15% of 

carbon tax revenue—through 2025, steadily decreasing to zero thereafter. At the time, some 

questioned whether this allotment was sufficient.97 Regardless, the data and administrative 

resources necessary to implement such a program would be substantial. 

Alternatively, policymakers could supplement a carbon tax scheme with a border adjustment 

mechanism that would essentially apply a tariff to carbon-intensive, imported goods. Such a 

mechanism was included in H.R. 2454 (111th Congress). Under that proposal, EPA would have 

required importers of energy-intensive products from countries with insufficient carbon policies 

to submit a prescribed amount of “international reserve allowances,” for their products to gain 

entry into the United States. Implementation of this approach would present substantial 

administrative challenges, particularly in terms of data from other nations. 

In addition, either the revenue distribution or border adjustment approach would likely raise 

concerns of trade complications. These issues are beyond the scope of this report. For further 

information, see CRS Report R40914, Climate Change: EU and Proposed U.S. Approaches to 

Carbon Leakage and WTO Implications. 

Concluding Observations 

Carbon taxes, or fees on emissions of some or all GHG emissions, have been proposed for many 

years by economists and some Members of Congress. A new carbon price would help reduce 

GHG emissions contributing to climate change and ocean acidification, and tax revenues could 

support a range of policy objectives, including deficit reduction. 

Carbon tax revenues would depend strongly on the scope and rate of the tax and multiple market 

factors, which instill uncertainty in revenue projections. A $20/mtCO2 carbon tax on U.S. CO2 

emissions would generate approximately $90 billion in its first year. If applied toward deficit 

reduction, carbon tax revenue (of this magnitude) could have some impact on projected budget 

deficits, but impacts vary considerably depending on which budgetary baseline is assumed. 

Regardless, if policymakers established a carbon tax, they would likely face pressure from 

multiple stakeholders seeking a portion of the carbon tax revenues. Households would be 

 

96 During debate over H.R. 2454 (in the 111th Congress), the Energy-Intensive Manufacturers’ Working Group on 

Greenhouse Gas Regulation provided detailed testimony on the energy intensity and trade intensity of the U.S. 

manufacturing sector. Testimony of John McMackin for the Energy Intensive Manufacturers’ Working Group on 

Greenhouse Gas Regulation before the House Committee on Ways and Means (March 24, 2009). 

97 For further details, see CRS Report R40914, Climate Change: EU and Proposed U.S. Approaches to Carbon 

Leakage and WTO Implications. 

2012-08-054_000000000001093
Carbon Tax: Deficit Reduction and Other Considerations 

Congressional Research Service 32 

expected to bear a large portion of burden imposed by a carbon tax. Lower-income households, in 

particular, would face a disproportionate impact if revenues were not recycled back to them in 

some fashion. In addition, specific industries may experience disproportionate impacts. Carbon 

tax revenues that are used to offset the burden imposed on various sectors or specific population 

groups would not be available to support other objectives, like deficit reduction. 

2012-08-054_000000000001094
Carbon Tax: Deficit Reduction and Other Considerations 

Congressional Research Service 33 

Appendix. Carbon Tax and Carbon Pricing 

Proposals in the 111th Congress 

In the 111th Congress, policymakers introduced at least 9 stand-alone, market-based proposals that 

sought to reduce GHG emissions.98 These bills included carbon tax, cap-and-trade, and hybrid 

approaches. Of the bills that specified a distribution formula for carbon tax revenue or emission 

allowance value,99 only three (and one draft bill) would have allotted allowance value or tax 

revenue that would explicitly support deficit reduction (listed in order of proposed date): 

• H.R. 2454 (Waxman-Markey), introduced May 15, 2009: 0.2% of emission 

allowance value in 2016-2026, zero in subsequent years. 

• S. 1733 (Kerry-Boxer), introduced September 30, 2009: 10.3% of emission 

allowance value in 2016, increasing to 30% in 2030. 

• S. 2877 (Cantwell), introduced December 11, 2009: 25% of emission allowance 

value (subject to the appropriations process) to a fund, which could be used to 

support a myriad of policy objectives, including deficit reduction. 

• Kerry-Lieberman draft legislation, released May 12, 2010: 6.8% of emission 

allowance value in 2016 and 2030. 

Author Contact Information 

Jonathan L. Ramseur 

Specialist in Environmental Policy 

jramseur@crs.loc.gov, 7-7919 

Molly F. Sherlock 

Specialist in Public Finance 

msherlock@crs.loc.gov, 7-7797 

Jane A. Leggett 

Specialist in Energy and Environmental Policy 

jaleggett@crs.loc.gov, 7-9525 

 

 

98 See CRS Report R40556, Market-Based Greenhouse Gas Control: Selected Proposals in the 111th Congress, by 

Brent D. Yacobucci, and Jonathan L. Ramseur. 

99 Allowance value allocation includes both the use of auction revenues and distribution of allowances to entities (e.g., 

industry or non-covered parties) at no cost. 

2012-08-054_000000000001095
RGE Daily Top 5

From: Roubini Global Economics

To: Berg, Katie

Subject: RGE Daily Top 5, Wednesday, April 25, 2012

Date: Wednesday, April 25, 2012 2:02:04 AM

All Washed Up in Washington: Key Takeaways From an Unscripted IMF Spring

Meeting

By Nouriel Roubini, Arnab Das, Christian Menegatti and Megan Greene: Neither

national politicians/policy makers nor the IMF convinced us that they can make the

world durably safer or grow faster, given inadequacies in new ideas, resources and

coordination to shock expectations beyond policies to kick the can down the road, like

more liquidity. The focus is back on the eurozone, despite efforts to talk up the size of

the firewall and increase the IMF’s resources—what is different this time is the

country most in play, Spain, for which we have a forthcoming analysis. The lack of

coherence and cogency in planning as well as the absence of credible contingencies

argue for continued caution in risky assets and strong liquidity preferences all around.

Read more

Central Bank Watch: Disinflation Will Reign in 2012

By Michael Manetta and the RGE Economic Research Team: Despite a marked

improvement in global sentiment in Q1 2012, it is remarkable how disinflationary the

world still appears to be; we do not see any evidence that recent monetary policy

loosening has been inflationary for the global economy. Our developed

market economists are forecasting headline inflation deceleration almost across the

board this year, with expectations of additional policy easing to come, while in

emerging markets, policy stances are becoming more diverse, with some tightening

in rates later this year looking more likely. The growth/inflation environment over the

next 12 months will not, outside of a few exceptions, push central banks into the

hawkish camp.

Read more

Australian Inflation Slows Sharply in Q1 on Food, Imports; Rate Cut Imminent

Since December we have been arguing that the Australian economy is not on solid

footing, and today's inflation data reaffirmed that the Reserve Bank of Australia (RBA)

has been overly optimistic and is behind the rate cutting curve. In response to the Q1

results (1.6% y/y versus market expectations of a 2.2% increase), we will revise down

our 2012 inflation forecast markedly, probably to closer to 1.8% from 2.4% just a

month ago, though consequently we will revise up our 2013 forecast slightly. Base

effects will feed into price pressures in H2, as will the government's carbon tax and

2012-08-054_000000000001096
still-elevated commodity prices. We still expect to see 50 bps of cuts in Q2, with the

RBA stopping at 3.75% for the year.

Read more

Czech Politics: Government Seeks Majority After VV Party's Split

Following the departure of the junior coalition party, Public Affairs (VV), the Czech

center-right government is facing a confidence vote on April 27, with Prime Minister

Petr Necas counting on the VV’s rebel faction to gather at least 10 votes necessary to

secure a safe majority in the 200-seat parliament and avoid snap elections. The

latest political turmoil comes only a week after VV threatened to resign from

government without a cabinet reshuffle and policy changes; intra-coalition tensions

eased after the three parties agreed to a new set of savings measures necessary to

meet the deficit goal of 2.9% of GDP in 2013. We believe that, aided by the VV rebel

faction, the current cabinet will secure a safe majority in parliament.

Read more

UK Budget Deficit Widens in March With Highest Net Debt on Record

The UK's public-sector net borrowing, excluding financial interventions (such as bank

bailouts), soared to £18.2 billion in March 2012 (down from £17.9 billion in March

2011), while net public-sector debt rose beyond the £1 trillion mark in March,

reaching £1.0225 trillion—at 66% of GDP, a record high. The widening of the deficit

was on account of a surge in government spending of 4.2%, coupled with a meager

increase of 1.4% in tax receipts. In our view, disappointing output expansion would

imply that the Treasury must announce new measures going forward or abandon its

fiscal mandate.

Read more

Manage Your Email | Contact Us | About Us

Rights and Permissions: The preceding newsletter is the copyrighted property of Roubini Global Economics, LLC and meant for the

use of RGE’s clients and newsletter subscribers. No forwarding, reprinting, republication or any other redistr bution of this content is

permissible without expressed consent of Roubini Global Economics, LLC. All rights reserved. RGE is not a certified investment

advisory service and aims to create an intellectual framework for informed financial decisions by its clients.

This message sent to katie.berg@do.treas.gov by info@roubini.com.

Roubini Global Economics

95 Morton Street

6th Floor

New York, NY 10014

You opted in to this list from: The Latest at RGE Monitor (More info...)

Unsubscribe | Update Profile/Email Address | Forward To A Friend

2012-08-054_000000000001097
From: Brookings Alert

To: Tonkonogy, Bella

Subject: U.S.-Africa Trade; Clean Energy; Greek Election

Date: Monday, June 11, 2012 10:20:13 AM

On a mobile device? Having trouble reading this email?

View Online

http://www.brookings.edu/newsletters/brookingsalert/2012/0611

----------------------------------------

Brookings | Alert

June 11, 2012

----------------------------------------

The African Growth and Opportunity Act: Looking Back, Looking Forward

http://www.brookings.edu/research/reports/2012/06/agoa

This week, the U.S. will host the 11th annual U.S.-Sub-Saharan Africa Trade and Economic Cooperation Forum, commonly known as the AGOA Forum. Witney Schneidman and Zenia Lewis examine

the impact of the African Growth and Opportunity Act (AGOA) over the past 12 years, arguing that AGOA continues to be the cornerstone of the U.S.-Africa commercial relationship and should be

extended for ten years beyond its scheduled expiration in 2015. The report joins a series of publications on AGOA’s effectiveness, challenges, and prospects for the future from the Africa Growth

Initiative.

Read the report:

http://www.brookings.edu/research/reports/2012/06/agoa

----------------

Clean Energy: Revisiting the Challenges of Industrial Policy

http://www.brookings.edu/research/papers/2012/06/04-clean-energy-morris-nivola-schultze

While the United States has doubled clean energy subsides in recent years, Adele Morris, Pietro Nivola and Charles Schultze write that, apart from basic research, most subsidies directed toward

clean energy without a policy that charges for carbon dioxide emissions will produce little lasting environmental benefit. They argue for a carbon tax as the most effective climate policy and one that

would also spur energy innovation.

Read the paper:

http://www.brookings.edu/research/papers/2012/06/04-clean-energy-morris-nivola-schultze

----------------

The Greek Election and the Future of the Euro

http://www brookings edu/events/2012/06/14-greek-election

Greek voters will soon head to the polls for the second time in six weeks after the May elections resulted in political gridlock. The fate of the eurozone is widely perceived to hang in the balance

with markets bracing for turbulence after the new elections on June 17. On June 14, Brookings will host a discussion previewing the legislative elections and their implications on the euro crisis.

Register to attend:

http://www.brookings.edu/events/2012/06/14-greek-election

----------------------------------------

UPCOMING EVENTS

----------------------------------------

THIS WEEK AT BROOKINGS

Financial Inclusion Around the World: Implications for Development and the G-20

http://www.brookings.edu/events/2012/06/11-financial-inclusion

June 11, 2012, 2:30 PM to 4:00 PM

----------------

How to Further the Mobile Technology Revolution

http://www.brookings.edu/events/2012/06/12-mobile-technology-revolution

June 12, 2012, 10:00 AM to 11:30 AM

----------------

The Challenges and Opportunities of Arctic Energy and Resources Development

http://www.brookings.edu/events/2012/06/12-arctic-energy-development

June 12, 2012, 1 00 PM to 5:00 PM

----------------

LIVE WEBCAST: The Africa Growth and Opportunity Act: Looking Back, Looking Forward

http://www.brookings.edu/events/2012/06/13-africa-growth-opportunity

June 13, 2012, 1 00 PM to 5:30 PM

----------------

The Greek Election and the Future of the Euro

http://www.brookings.edu/events/2012/06/14-greek-election

June 14, 2012, 2 00 PM to 3:30 PM

----------------

Improving Spectrum Access Through Reverse Auctions

http://www.brookings.edu/events/2012/06/15-spectrum-access

June 15, 2012, 1:30 PM to 3:00 PM

ON THE HORIZON

Annual State of Biomedical Innovation Conference

Wednesday, June 27, Engelberg Center for Health Care Reform

----------------

The First 365 Days in South Sudan: Sound Policies for the Way Forward

Thursday, June 28, Africa Growth Initiative

Event Archive:

http://www.brookings.edu/events/past-events

----------------------------------------

RESEARCH AND COMMENTARY

----------------------------------------

@ Brookings Podcast: The American Community Survey

http://www brookings edu/research/podcasts/2012/06/08-at-brookings-podcast

William H. Frey, The Brookings Institution

----------------

2012-08-054_000000000001098
The G-20 Los Cabos Summit 2012: Bolstering the World Economy Amid Growing Fears of Recession

http://www.brookings.edu/research/reports/2012/06/g20

----------------

Previewing the 2012 Presidential Election: A Live Web Chat with William Galston

http://www brookings edu/events/2012/06/06-presidential-election-chat

June 6, 2012, 12:30 PM to 1:00 PM

----------------

Islam’s Place in Europe

http://www.brookings.edu/research/opinions/2012/06/07-europe-islam-laurence

Jonathan Laurence, CNN

----------------

Rio+20: Coalitions Driving Bottom-Up Change

http://www.brookings.edu/research/reports/2012/06/rio20

----------------

Still Seriously Unmatched

http://www.brookings.edu/research/opinions/2012/06/07-india-china-schaffer

Howard Schaffer and Teresita C. Schaffer, The Hindu

----------------

Switzerland May Find Itself In a Currency War

http://www.brookings.edu/research/opinions/2012/06/07-swiss-currency-klein

Michael W. Klein, Real Clear Markets

----------------

A Bill that Cracks Down on Russian Corruption

http://www.brookings.edu/research/opinions/2012/06/06-russia-corruption-bill-kagan

Robert Kagan and David J. Kramer, The Washington Post

----------------

Brother Number One: A Profile of Egyptian Presidential Candidate Mohamed Morsi

http://www.brookings.edu/research/opinions/2012/06/07-egypt-morsi-hamid

Shadi Hamid, Foreign Policy

----------------

Memorial Day with Muslims in America

http://www.brookings.edu/research/opinions/2012/06/06-muslims-america-skerry

Peter Skerry, The Telegram

----------------

What if Democrats Hang Tough at Fiscal Cliff?

http://www.brookings.edu/research/opinions/2012/06/06-fiscal-cliff-sawhill

Isabel V. Sawhill, POLITICO

----------------

The African Growth and Opportunity Act (AGOA): Looking Back, Looking Forward

http://www.brookings.edu/research/reports/2012/06/agoa

Witney Schneidman and Zenia Lewis, The Brookings Institution

----------------

Be Quick, Be Useable, Be On Time: Lessons in Agile Delivery of Defense Analytic Tools

http://www.brookings.edu/research/papers/2012/06/06-defense-practices-duvall

Lourdes M. Duvall, The Brookings Institution

----------------

Free Education Programs and Quality: A Tale of Two Amazing Old Men

http://www brookings edu/research/opinions/2012/06/06-free-education-kimenyi

Mwangi S. Kimenyi, The Brookings Institution

----------------

The Flame Cyber Espionage Attack: Five Questions We Should Ask

http://www.brookings.edu/research/opinions/2012/06/05-cyber-spy-villasenor

John Villasenor, Forbes

----------------

Toward Inclusive Growth in Nigeria

http://www.brookings.edu/research/papers/2012/06/growth-nigeria-ogbu

Osita Ogbu, The Brookings Institution

----------------

Inside the Mind of a Terrorist

http://www.brookings.edu/research/opinions/2012/06/05-terrorist-mind-wilder

Ursula Wilder, The National Interest

----------------

Will Greece Kill the Euro?

http://www.brookings.edu/research/opinions/2012/06/05-greece-euro-elliott

Douglas J. Elliott, Real Clear Markets

----------------

Nepal, on the Brink of Collapse

http://www.brookings.edu/research/opinions/2012/06/05-nepal-collapse-felbabbrown

Seyom Brown and Vanda Felbab-Brown, The New York Times

----------------

Combating Poverty: Understanding New Challenges for Families

http://www.brookings.edu/research/testimony/2012/06/05-poverty-families-haskins

Ron Haskins, United States Senate Committee on Finance

----------------

Federalism and Economic Growth

2012-08-054_000000000001099
http://www.brookings.edu/research/expert-qa/2012/06/04-federalism-katz

Bruce Katz and Benjamin Wittes, The Brookings Institution

----------------

Clean Energy: Revisiting the Challenges of Industrial Policy

http://www brookings edu/research/papers/2012/06/04-clean-energy-morris-nivola-schultze

Adele Morris, Pietro S. Nivola and Charles L. Schultze, The Brookings Institution

----------------

Egypt's Innocent Murderers

http://www.brookings.edu/research/opinions/2012/06/04-mubarak-trial-ashour

Omar Ashour, Project Syndicate

----------------

How to Repair the U.S.-Pakistan Relationship

http://www.brookings.edu/research/opinions/2012/06/04-us-pakistan-relations-riedel

Bruce Riedel, The Daily Beast

----------------

Iran’s Nuclear Crisis: Domestic, Regional and International Pressures

http://www.brookings.edu/research/opinions/2012/06/04-iran-nuclear-talks-santini

Ruth H. Santini and Aniseh Bassiri Tabrizi, The Aspen Institute

----------------

Think Tank 20: New Challenges for the Global Economy, New Uncertainties for the G-20

http://www.brookings.edu/research/reports/2012/06/think-tank-20

Kemal Derviş and Homi Kharas , The Brookings Institution

----------------

Political Division and Dysfunction in Congress

http://www.brookings.edu/research/interviews/2012/06/04-political-division-mann

Thomas E. Mann and Norm Ornstein, The Daily Show with Jon Stewart

----------------

Why Not Venture-Capital Philanthropy?

http://www.brookings.edu/research/opinions/2012/06/03-philanthropy-pozen

Robert C. Pozen, Wall Street Journal

----------------

Promise of Arab Spring Eluding Egypt?

http://www.brookings.edu/research/opinions/2012/06/02-egypt-presidency-hamid

Shadi Hamid, CNN

More Research and Commentary:

http://www.brookings.edu/research

----------------------------------------

UP FRONT BLOG

----------------------------------------

The Absurd Politics of Green Jobs Counting

http://www.brookings.edu/up-front/posts/2012/06/08-green-jobs-muro-rothwell

Mark Muro and Jonathan Rothwell, The Avenue, The New Republic

----------------

A Pathway for Education to 2015 and Beyond

http://www.brookings.edu/up-front/posts/2012/06/06-beyond-education-van-fleet

Justin W. van Fleet, The Brookings Institution

----------------

How Dallas is Going Global

http://www brookings edu/up-front/posts/2012/06/05-dallas-global-cities-berube

Alan Berube, The Avenue, The New Republic

----------------

Perspectives on the Global Economy from G-20 Countries

http://www.brookings.edu/up-front/posts/2012/06/05-g20-countries-dervis-kharas

Kemal Derviş and Homi Kharas, The Brookings Institution

Up Front Blog Archives:

http://www.brookings.edu/up-front

----------------------------------------

BROOKINGS PRESS

----------------------------------------

Campaign 2012

http://www.brookings.edu/research/books/2012/campaign2012

Benjamin Wittes, ed., Brookings Institution Press

----------------

Deadly Embrace

http://www.brookings.edu/research/books/2012/deadlyembracerevised

Bruce Riedel, Brookings Institution Press

More Books:

http://www.brookings.edu/about/press

----------------------------------------

EXECUTIVE EDUCATION PROGRAMS

----------------------------------------

Science and Technology Policy Issues

http://www.brookings.edu/about/execed/programs/sciencetech/201206

June 18, 2012, Washington, DC

----------------

Accountability for Results

http://www.brookings.edu/about/execed/programs/accountabilityforresults/201206

June 19, 2012, Washington, DC

2012-08-054_000000000001100
More Executive Education:

http://www.brookings.edu/about/execed

----------------------------------------

STAY CONNECTED

----------------------------------------

Sign up for Global Update

http://www.brookings.edu/newsletters/globalupdate

Brookings RSS Feeds

http://www.brookings.edu/rss

Follow us on Twitter

http://twitter.com/#!/brookingsinst

Brookings on Facebook

http://www.facebook.com/brookings

Brookings Mobile Applications

http://www.brookings.edu/mobile

----------------------------------------

You are receiving this email because you signed up for the

Brookings Alert newsletter.

Unsubscribe:

http://www.brookings.edu/newsletters?manage=true&u=7dfe5ede-732f-469b-9b8f-a7a2dde7d558http://sm.brookings.edu:80/track?

type=unsubscribe&eas=1&mailingid=17477&messageid=17408&databaseid=910&serial=16785310&emailid=bella.tonkonogy@treasury.gov&userid=1_50469&targetid=&fl=&extra=MultivariateId=&&&

----------------------------------------

BROOKINGS

1775 Massachusetts Ave, NW, Washington, DC 20036

Phone: 202-797-6000

http://www.brookings.edu

Email Brookings: communications@brookings.edu

Privacy Policy: http://www.brookings.edu/about/privacy-policy

2012-08-054_000000000001101