In this edition:
- Analysis on how to revise the tax code to address climate change
- Examining California’s climate policy
Federal Budget and Taxes
The White House’s recent $4 trillion annual budget request included a number of proposed changes aimed at addressing climate change through the US tax code. The plan would “strip an estimated $44 billion tax breaks over a decade” from oil and gas producers, while also permanently extending tax credits for wind and solar-energy systems.
Policymakers can also use the tax code to mitigate climate by imposing a carbon tax. Such a tax would reduce harmful emissions while raising “billions of dollars each year,” according to RFF’s Marc Hafstead and Stanford University’s Lawrence Goulder. This revenue can "serve a wide range of purposes" such as financing energy efficiency investments, financing payments to negatively affected households or firms, or reducing the federal deficit. Hafstead also notes that the revenue could be used to finance corporate tax reform to "discourage corporate tax inversions.”
California Carbon Permits
California’s manufacturing costs are expected to rise as regulators reduce the state’s supply of emissions credits. Observers have expressed concern that the “lack of a national and global carbon-emissions market” may be negatively impacting California’s economy, which is on track to achieve a 15 percent reduction in its emissions by 2020.
On February 25, RFF will host a seminar on California’s cap-and-trade program that invites panelists to discuss the current and future direction of the state’s climate policy. Experts from the Environmental Defense Fund will also present their recent analysis of California’s emissions reduction efforts under AB 32. Register to attend the event or watch the live webcast.
