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Addressing Climate Change: Executive Summary
Addressing Climate Change: Executive Summary
Figure 1. NEMS Estimates of CO2 Emissions under the Carbon-Based Tax Program
and Two Cap-and-Trade Proposals, 1990-2030
8,000
No Action
7,500
Bingaman-
7,000
Specter
(S.1766)
6,500
Lieberman-
McCain
6,000 (S.280)
Carbon Tax
5,500
5,000
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Addressing Climate Change Without Impairing the U.S. Economy • Executive Summary
The U.S. Climate Task Force
two leading cap-and-trade proposals (Figure 1). than one percent less than the $22.5 trillion projected
By 2030, this strategy would drive down U.S. CO2 if no action is taken on climate change (2005 dollars).
emissions by about 30 percent compared to what The direct and indirect effects of this approach for
they would be under the EIA’s business-as-usual creating an emissions path to preserve the climate
scenario (Figure 2). American GDP in 2030 would be also would have little effect on the economic
an estimated $22.3 trillion under this approach, or less prospects of average households: U.S. households
would earn an average of $88,330 per-year under the
Figure 2. Impact of the Carbon-Based Tax carbon-based tax package over this 20-year period,
Package on U.S. CO2 Emissions compared to $89,761 under current trends. The
approach would modestly reduce projected overall
energy use. Its greatest effects, however, would
8000
involve changes in the forms of energy used, shifting
7000 gradually away from carbon-intensive fuels such as
6000 coal, and towards non-carbon based alternative fuels
and less carbon intensive forms of energy (Figure 3).
5000
Every approach to climate change necessarily will
4000 involve higher energy prices. By capturing those
3000 price increases in a tax, this program can recycle its
revenues and sharply reduce both the direct costs
2000
of the tax for most businesses and people, as well
1000 as moderating many of the indirect costs.
0 The analysis and projections in the study fairly
2010 2020 2030
establish that the United States should be able to
G Business-As-Usual G Carbon-Based Tax use this approach to reduce its emissions levels
consistent with a long-term path to safe levels for
CO2 Emissions the global climate, at an annual cost of 1.6 percent
(million metric tons) of an average household’s annual income.
300
225
Liquid
150
Natural Gas
Percentage Difference
Coal
Nuclear
75
Biofuels
Renewables
0
-75
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Addressing Climate Change Without Impairing the U.S. Economy • Executive Summary