Abstract
The Energy Modeling Forum (EMF) 32 study on carbon tax scenarios analyzed a set of illustrative policies in the United States that place an economy-wide tax on fossil-fuel-related carbon dioxide (CO2) emissions, a carbon tax for short. Eleven modeling teams ran these stylized scenarios, which vary by the initial carbon tax rate, the rate at which the tax escalates over time, and the use of the revenues. Modelers reported their results for the effects of the policies, relative to a reference scenario that does not include a carbon tax, on emissions, economic activity, and outcomes within the U.S. energy system. This paper explains the scenario design, presents an overview of the results, and compares results from the participating models. In particular, we compare various outcomes across the models, such as emissions, revenue, gross domestic product, sectoral impacts, and welfare.
Highlights
The Stanford Energy Modeling Forum (EMF) was established in 1977 as an organization to convene international working groups of modelers and model users in energy, economics, and the environment to undertake specific studies, identify important issues, and share insights
This study gathered together 11 modeling teams to run a common set of carbon tax scenarios, in order to explore how environmental and economic outcomes depend on the initial carbon tax rates, the rate at which the tax escalates, and how the government uses the revenue collected by the carbon tax
The reference scenario projects a future for emissions and economic activity without new climate policy or greenhouse gas (GHG) regulations on stationary sources by the U.S Environmental Protection Agency (EPA)
Summary
The Stanford Energy Modeling Forum (EMF) was established in 1977 as an organization to convene international working groups of modelers and model users in energy, economics, and the environment to undertake specific studies, identify important issues, and share insights. The study is motivated by a desire to inform critical policy design decisions with information such as: the policies’ expected revenue and tax rate outcomes; options for balancing distributional and efficiency goals; the likely significance of international emissions leakage and competitiveness effects; and the outcomes of an emissions tax approach relative to regulation under the Clean Air Act. A key objective of this model inter-comparison project is to understand which insights are robust across models and scenarios and which are more sensitive. This paper provides a technical overview of the core modeling results, and Barron et al (this issue) summarize the policy-relevant insights. It reviews the scenarios’ emissions reductions, revenue raised, macroeconomic, sectoral, and welfare outcomes.
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