A brand new study of a national, revenue-neutral carbon tax was released earlier today by the policy-neutral economic modelers Regional Economic Models, Inc. (REMI) and Synapse Energy Economics, Inc. The key findings are as follows.
- Millions of jobs created. "National employment increases by 2.1 million jobs after 10 years, and 2.8 million after 20 years. This is more than a 1% increase in total US employment we don't get without a carbon tax!"
- Significantly greater economic output. "$70-$85 billion increase in GDP from 2020 on, with a cumulative increase in national GDP due to [a "Fee and Dividend," revenue-neutral carbon tax] of $1.375 trillion. "
- Enormous health benefits. "13,000 lives are saved annually after 10 years, with a cumulative 227,000 American lives saved over 20 years.
- Dramatic declines in fossil-fuel-plant pollution. For instance: "CO2 emissions decline 33% after only 10 years, and 52% after 20 relative to baseline."
- Thousands of dollars back to the average family. "The [revenue-neutral "Fee and Dividend" carbon tax] rebates return nearly $400 billion to households—or almost $300 per month for a family of four."
- Major boost to wind and solar power. "The carbon tax aids in retirements of coal plants and accelerates investments in wind, solar, and nuclear power...Nationally, wind and solar represent about 5% of 2014 generation and, by 2040, this grows to 37% in the alternative case."
- Power price increases level off and reverse starting in 2026. "Electricity...can switch out of carbon-intensive coal and natural gas and into zero-carbon nuclear, wind, and solar, which reduces the [price] impact in the 2020s and 2030s. All these have a negative effect, but the macroeconomic balance is positive, and it does generate revenues for the FAD and incentivize the significant reduction of national and regional level emissions."
- Employment and economic output increases in most economic sectors and regions. "Regional Gross Product is steady or rising in 8 of 9 regions," with the only economic sectors impacted negatively being those that are highly fossil-fuel intensive (e.g., mining).
Finally, the REMI/Synapse analysts explain why previous carbon tax studies haven't shown such positive results. Namely: "The majority of previous reports considering a carbon tax have not modeled a completely revenue-neutral carbon tax, do not envision a policy with such an aggressive rate of increase, do not have the same detail as REMI can provide, do not consider a 100% dividend, and do not report health benefits." Even so, 'the results of REMI's work are largely consistent with previous studies in terms a benefit to the economy, industry effects, and emissions reductions."
The bottom line of all this is striking. According to REMI: "there is no economic argument against Fee and Dividend. It creates jobs, grows the economy, saves lives, and makes Americans richer." Which means: "To be against doing anything is to be against jobs, against a larger economy, and against saving American lives. We know of no politician who wants to be against these things, and so we hope that this study will clear the way to rapid passage of FAD. " We couldn't agree more.