Plugged In

Plugged In

More than wires - exploring the connections between energy, environment, and our lives

How EPA could push a carbon tax


Carbon tax has been popping back up on the radar this week. First, the Congressional Budget Office included a carbon tax in a myriad of ideas to reduce the federal deficit. There are a bunch of energy-related measures in there but the one that stands out to me is the carbon tax. According to the CBO's estimates a tax on greenhouse gas emissions would reduce the deficit by $1.06 trillion over the next ten years.


Now, Brad Plumer at The Washington Post asks the trillion dollar question: "Could the EPA push a carbon tax on its own?"

The answer is: maybe.

Basically, EPA has authority to set federal guidelines for carbon emissions from existing power plants and states can meet these in a bunch of different ways. A state-specific carbon tax could be one of the approved methods for complying with EPA's rules.

Or states could implement a cap & trade scheme a la California/RGGI/Quebec.

Either will likely be more economically efficient than say hard limits on GHGs per kWh, and in the end, a carbon tax or trading scheme should result in the same outcome. How you get there is a matter of what your priorities are. Do you care more about the price of the externality? Then you set a dollar amount (tax). Do you care more about the amount of emissions? Then you set a cap and let people figure out the best way to meet it.

I probably wouldn't hold my breath for a carbon tax, but it is at least a possibility. Of course, a nationwide carbon tax would just be simpler to implement than separate state programs, but alas.

The views expressed are those of the author and are not necessarily those of Scientific American.

Share this Article:


You must sign in or register as a member to submit a comment.

Starting Thanksgiving

Enter code: HOLIDAY 2015
at checkout

Get 20% off now! >


Email this Article