Study: Carbon Tax Would Create Jobs If Refunded To Households

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While the argument is often (incorrectly) made that the actions needed to adequately address greenhouse gas emissions and climate change are too expensive to realistically be taken, the reality appears to be quite a bit different, as study after study seems to show.

Continuing in that tradition is a recent study from Regional Economic Models Inc (REMI) that has found that taxing carbon can not only reduce greenhouse gas emissions but also add jobs to the economy.

China To Implement Carbon TaxImage: Coal power plant pollution via Shutterstock

The idea is that, if revenue from the tax is returned to households, it would end up creating jobs.

The press release provides more:

The study examined a tax on the carbon-dioxide content of fossil fuels. The tax would start at $10 per ton, increasing at $10 per ton each year. Revenue from the tax would be returned to households in equal shares as direct payments. Under this approach, the REMI study found that recycling the revenue back into the economy would add 2.1 million jobs over ten years. Improvements in air quality would save 13,000 lives a year. Emissions would decline by 33%.

“Detractors have said that a carbon tax will kill jobs,” stated Mark Reynolds, executive director of Citizens Climate Lobby, which commissioned the study. “The REMI study turns that assumption on its head.”


Given the fact that the impacts of climate change are already beginning to be felt, such a move has been a long time coming. On that note, last week the Obama administration revealed new regulations from the EPA that aim to limit carbon emissions from power plants.

“If Republicans don’t want more EPA regulations, their best recourse is to deliver a revenue-neutral carbon tax, which is supported by conservatives from George Shultz to Greg Mankiw,” Reynolds continued. “With the REMI study showing a carbon tax that returns revenue to households will add millions of jobs, this is the option everyone can embrace.”

Those interested in reading the study can find it here.

In related news, a new report published by the World Energy Council is warning that the energy sector is going to be facing more and more difficulties caused by climate change in the coming years. The general takeaway of the report is summed up rather nicely by this quote here: “The energy sector is facing increasing pressure from climate change … all segments of the industry will be affected by the changing global climate and the policy responses to it.”

Not really news to anyone already familiar with the topic of course, but interesting to hear on such a big stage nonetheless. The next couple of decades certainly look like they are going to be interesting, don’t they?


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James Ayre

James Ayre's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy.

James Ayre has 4830 posts and counting. See all posts by James Ayre