Costs of Climate Protection

By Robert Repetto and Duncan Austin
Washington, DC (January 1, 1997)- This brief provides readers a tool by which to form their own judgment about the likely economic impact of climate protection policy. The United States and other nations are committed under the Framework Convention on Climate Change to prevent greenhouse gases from accumulating in the atmosphere, but the economic impacts of limiting greenhouse gas emissions are almost as uncertain as the impacts of climate change themselves.

The Costs of Climate Protection breaks down the economic models currently used to analyze climate policy options by examining the key assumptions built into these models.
The Costs of Climate Protection looks at how assumptions affect predicted costs and offers favorable policy options. These options include:
* How the United States can and should negotiate with other nations in stabilizing carbon emissions through a system of joint implementation;
* How the federal government can restructure the tax system to lower income and payroll tax by making up the revenues through energy taxes; and
* How to make renewable, non-fossil energy sources more widely available at lower prices.
The authors conclude that if the United States and other countries follow the basic measures outlined in the report, climate protection will not adversely affect the economy.
This report was the first in a series produced by the Climate Protection Initiative, a partnership between WRI and private firms to identify acceptable policies and business strategies for achieving strong climate protection goals.
About the Green Fees Initiative
The federal tax code can have a significant impact on the environment. Fiscal policy is used to encourage as well as discourage various business activities and consumer decisions. These activities affect the environment and human health by influencing how much we consume, how we use natural resources, and how much pollution is released into our air and water.
The President’s recent call for tax reform and the presence of persistent budget deficits provide opportunities for policy makers to consider changes to the federal tax code that could lead to not only greater fiscal responsibility, but also improved human and environmental health.
The World Resources Institute’s Green Fees initiative seeks to identify and analyze a portfolio of tax reforms that would be both fiscally prudent and environmentally sound. WRI and partners will educate policymakers, interest groups, and opinion leaders in order to build support for these measures.
The portfolio of reforms WRI will address include:
* Eliminating existing tax expenditures that forego revenue and that encourage activities reducing the quality of our air, the cleanliness of our water, and the abundance of our natural resources;
* Introducing environmental charges on pollution and waste to discourage environmental degradation, stimulate technological innovation, and improve the federal budget situation.
For more information, visit the World Resources Institute.