Before Congress can move forward to address greenhouse gas emissions with a transparent, market-based and revenue-neutral price on carbon, it first should move to unwind the multiple federal policies that already price carbon in economically and administratively expensive ways, according to a new policy short from the R Street Institute.
In the brief, R Street Senior Fellow Catrina Rorke details why pre-emption is necessary and lays out the particular policies Congress should target for elimination before adopting a federal carbon price alternative.
"Congressional interest in restraining the Environmental Protection Agency’s authority to regulate carbon under the Clean Air Act is apparent, but legislators have paid little attention to additional authorities seized by EPA, the U.S. Energy Department, the U.S. Interior Department or the Council on Environmental Quality. For this reason, sweeping reform is warranted," Rorke notes.
As Rorke argues, legislation to eliminate these authorities outright would curb market distortions; clarify opportunities for new technologies and solutions; and shrink the footprint of bureaucratic influence in energy decision-making. However, sound federal policy to address the challenge of climate change remains necessary.
“A market-based pricing instrument like R Street’s preferred revenue-neutral carbon tax could replace such inefficient policies; achieve faster reductions in greenhouse gas emissions; and provide the market with clarity and certainty around the costs of climate risk,” writes Rorke.