Washington, D.C. – In recent months, several members of Congress have introduced legislation to assess a tax on carbon pollution in order to avert dangerous climate change. Some observers have asked how a carbon tax would work with the Environmental Protection Agency’s Clean Power Plan and even suggested that a carbon tax could supplant the Clean Power Plan. The Center for American Progress has issued a paper showing that policymakers should consider the Clean Power Plan and a carbon tax as complementary tools to tackle the critical challenge of cutting carbon pollution.
“Policymakers should not think of a carbon tax and the Clean Power Plan as an either-or proposition. The Clean Power Plan and a carbon tax would work best in tandem to achieve much-needed reductions in carbon pollution,” said Alison Cassady, CAP Director of Domestic Energy Policy and co-author of the paper.
“History shows that market mechanisms and regulatory policies often work best in combination to achieve important environmental goals,” said Alexandra Thornton, CAP Senior Director of Tax Policy and co-author of the paper. “A carbon tax and the Clean Power Plan would strengthen each other and together would ensure that all people and businesses understand the value of a low-carbon economy.”
The paper provides two case studies showing how tax policy and a regulatory framework can work hand-in-hand to cut pollution, improve economic efficiency, and ensure a smooth transition to less-polluting processes.
The paper is available here.
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