When presented with a new carbon tax proposal, many climate policy observers ask: If the United States enacts a carbon tax, should Congress repeal the Clean Power Plan—the Environmental Protection Agency’s, or EPA’s, forthcoming rule to cut carbon pollution from power plants?
The answer to this question is a resounding no. A carbon tax should not come at the expense of the Clean Power Plan, which promises to cut carbon pollution from the power sector by 30 percent below 2005 levels by 2030. In fact, the Clean Power Plan and a potential carbon tax are mutually reinforcing rather than mutually exclusive. The Clean Power Plan will guarantee emissions reductions from the largest uncontrolled source of carbon pollution in the United States and reduce the power sector’s cost of complying with a future carbon tax. Meanwhile, a carbon tax will elicit additional pollution reductions from all sectors of the U.S. economy.
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