PSU study: Carbon tax would have negligible impact on economy

The study found that a $30 per ton tax would bring the state’s emissions back down to those of the late 20th century.

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The study found that a $30 per ton tax would bring the state’s emissions back down to those of the late 20th century.

From the university’s news release:

The study modeled a range of policy options. Among its findings is that a pricing rate of $60 per ton of carbon emissions would raise more than $2.3 billion in revenue for Oregon and have a significant impact on emissions reductions by reducing overall demand and creating incentives for behavioral change. Even at a lower rate of $30 per ton of carbon emissions, Oregon emissions would fall significantly below 1990 levels—allowing the state to reach its ambitious emissions reduction goals by 2020. An analysis of 70 specific industries found only minimal impacts resulting from such a carbon pricing policy, which could be offset through other tax reductions. Similarly, effects on household income would be small, with varying options to offset impacts through existing tax and public assistance programs. 

The study, commissioned by the Legislature during the 2013 session through Senate Bill 306, is the most thorough analysis of a state-level carbon tax in the U.S. and includes detailed data about potential impacts and benefits of carbon pricing on specific regions and industries throughout Oregon. NERC worked with two PSU physicists, Andrew Rice and Christopher Butenhoff, to develop a finely tuned emissions model to accurately portray the benefits to Oregon resulting from reduced carbon emissions.