1150 Seventeenth Street, N.W., Washington, D.C. 20036
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Conventional wisdom says that national regulation to control greenhouse gas emissions is dead for the foreseeable future. Even environmentalists have
Download Audio as MP3 administered the last rites to cap-and-trade legislation, reorienting their policy focus on protecting the Environmental Protection Agency's regulatory authority and promoting "green energy," via subsidies and state and federal "clean energy standards." But some economists remain interested in a national carbon tax as a way to reduce greenhouse gas emissions and possibly address the ongoing budget deficits and national debt. This panel will explore potential positive and negative economic and environmental impacts from a national carbon tax in the post-cap-and-trade policy environment.
ROBERT J. SHAPIRO, Sonecon LLC and Georgetown University McDonough School of Business
ROBERTON WILLIAMS, University of Maryland and Resources for the Future
DAVID KREUTZER, Heritage Foundation
WASHINGTON, JUNE 1, 2011--With efforts to establish a cap-and-trade system failing, panelists at an AEI event Wednesday debated whether carbon taxation should be the next frontier of climate policy. Carbon taxation could generate revenue for reducing the deficit or reducing taxes, which would create an extra benefit to society by also reducing market distortions from inefficient taxes. Roberton Williams of the University of Maryland and Resources for the Future emphasized that the primary rationale for carbon taxation is to put a price on the negative costs of pollution that are not being captured by market prices. Robert J. Shapiro of Sonecon LLC and Georgetown University noted that the problem with cap-and-trade is that it controls the quantity of emissions, rather than the price, resulting in volatile price movements and less incentive to develop cleaner technologies. Carbon taxation is generally considered more efficient than cap-and-trade systems, but AEI scholar Kenneth P. Green expressed doubts that a carbon tax would offer significant benefits, and said it would likely cause economic harm, particularly to the poor. David Kreutzer of the Heritage Foundation added that any policy to contain greenhouse gas emissions is likely to be ineffective due to booming growth in emerging economies such as China and India, and that no carbon tax should be pursued.
Robert J. Shapiro is the chairman and cofounder of Sonecon LLC, a private firm that provides advice and analysis to senior executives and officials of US and foreign businesses, governments, and nonprofit organizations. He is also a senior policy fellow of the Georgetown University McDonough School of Business, adviser to the International Monetary Fund, chairman of the US Climate Task Force, director of the Globalization Initiative at the NDN, cochair of American Task Force Argentina, and a director of the Ax:son-Johnson Foundation. Mr. Shapiro was undersecretary of commerce for economic affairs from 1997 to 2001. Before that, he was cofounder and vice president of the Progressive Policy Institute and the Progressive Foundation. He was the principal economic adviser to Bill Clinton in his 1992 campaign and a senior economic adviser to the Gore, Kerry, and Obama presidential campaigns. Mr. Shapiro also served as legislative director and economic counsel for Senator Daniel Patrick Moynihan (D-NY) and as a fellow of Harvard University (where he received his PhD), the Brookings Institution, and the National Bureau of Economic Research.
Roberton Williams is an associate professor in the Department of Agricultural and Resource Economics at the University of Maryland-College Park, senior fellow and director of academic affairs at Resources for the Future, a research associate of the National Bureau of Economic Research, and a coeditor of the Journal of Public Economics. He recently moved from the University of Texas at Austin, where he was an associate professor of economics, and has held visiting research positions at the Brookings Institution and Stanford University. Mr. Williams's research focuses on taxation and environmental regulation, both at a theoretical level and in specific policy contexts such as gasoline taxation and climate change policy.
David Kreutzer is the research fellow in energy economics and climate change at the Heritage Foundation's Center for Data Analysis. Before joining Heritage in 2008, he was an economist at Berman and Company, a Washington-based public-affairs firm. From 1984 to 2007, Mr. Kreutzer taught economics at Madison University, where he also served as director of the international business program. In addition, he was a visiting economist at the US Food and Drug Administration in 1994 and a visiting economics instructor at Ohio University in the early 1980s. Mr. Kreutzer's research has appeared in academic journals such as the Journal of Political Economy, the National Tax Journal, and Economic Inquiry. He has also written for mainstream media outlets, including the Wall Street Journal and the Washington Times.
Kenneth P. Green is a resident scholar at AEI, where he studies energy and environmental policy. For more than sixteen years, he has studied public policy involving risk, regulation, and the environment at public policy research institutions across North America. He has twice served as an expert reviewer for the United Nations Intergovernmental Panel on Climate Change and is a frequent contributor to AEI's Energy and Environment Outlook series.
is the director of economic policy studies and a senior fellow at AEI. Before joining AEI, he was a senior economist at the Board of Governors of the Federal Reserve System and an associate professor of economics and finance at the Graduate School of Business of Columbia University, as well as a policy consultant to the Treasury Department during the George H. W. Bush and Clinton administrations. He served as an economic adviser to the George W. Bush 2004 presidential campaign, chief economic adviser to Senator John McCain during the 2000 presidential primaries, and senior economic adviser to the McCain 2008 presidential campaign. Mr. Hassett also writes a column for National Review.