Kennedy authors handbook for US policymakers on pricing carbon
Putting a Price on Carbon: A Handbook for U.S. Policymakers is the first in a series of papers that the World Resources Institute will produce with the aim of providing a clear and comprehensive understanding of the key issues that will need to be addressed if the United States ultimately imposes a national price on carbon. The Handbook lays out what is already known about the design and effects of different approaches to pricing carbon, with a focus on carbon taxes and cap-and-trade programs.
We believe that pricing carbon should be a core element of the United States’ long-term strategy for achieving significant reductions in greenhouse gas emissions in the coming decades. However, in writing the Handbook, we recognize that many who are, or could become, interested in carbon pricing might be motivated by the potential for benefits that are unrelated to climate change. Carbon price programs can be designed with an eye toward other possible policy goals, such as reforming the tax code to be more efficient. Even when carbon pricing is approached with non-climate priorities in mind, the emission reduction potential provides an insurance policy against the risk of significant climate impacts.
The Handbook provides an overview of carbon pricing—the types of decisions that need to be made in designing a program (including the political decisions about the use of revenue) and the expected economic impacts of alternative approaches. We conducted a thorough review of the literature, selecting a broad array of well-regarded and highly cited studies that represent a range of viewpoints. We expect this Handbook to be useful in the public debate in the United States on whether, how, and when to implement a national carbon price.