Comparing the Clean Air Act and a Carbon Price

Nathan Richardson () and Arthur G. Fraas ()
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Nathan Richardson: Resources for the Future
Arthur G. Fraas: Resources for the Future

RFF Working Paper Series from Resources for the Future

Abstract: Over the last half decade, a variety of federal legislative proposals for limiting greenhouse gas (GHG) emissions have been put forward, most of which would set a price on carbon. As of early 2013, the one politically plausible policy appears to be a carbon tax, passed as part of a larger fiscal reform package. Meanwhile, the US Environmental Protection Agency has begun regulating GHG emissions from a variety of sources using its authority under the Clean Air Act. It may be necessary to choose between these two policies, however. The Waxman–Markey cap-and-trade bill that failed in 2009 would have preempted much of this authority, and it appears likely that a carbon tax law would do the same. But how can one make this choice? What are the key questions and issues to consider? The purpose of this paper is to compare these policies. Our aim here is therefore not to determine whether an exchange is wise or unwise. Instead, our intention is to give policymakers and other interested readers an impartial assessment of both policies and, in particular, the features that are important to a comparative evaluation. We don’t give answers, but hope at least to give the right questions to ask.

Keywords: Clean Air Act; carbon pricing; greenhouse gas emissions; cap and trade; climate policy (search for similar items in EconPapers)
JEL-codes: H20 H23 Q50 Q54 Q58 (search for similar items in EconPapers)
Date: 2013-05-09
New Economics Papers: this item is included in nep-ene, nep-env and nep-res
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Citations: View citations in EconPapers (3)

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