Environmental and Economic Benefits (REMI Study)

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Description
This training explores the Regional Economic Models, Inc. (REMI) analysis of the effect of a revenue-neutral carbon price on the American economy as well as its conclusion that such a system would have strong positive economic effects on the nation’s health and prosperity alike.
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TOC and Guide Section
 
Background

CCL wanted to find out how well a carbon fee and dividend would work, so in 2014, they hired an independent modeling firm – Regional Economic Models Inc. (REMI) – to do just that. The REMI study examined the effects of a carbon fee starting at $10 per metric ton of CO2 [1] and going up $10 a year for 20 years, with all proceeds returned to households. 

This is a little less ambitious than the Energy Innovation and Carbon Dividend Act, but is a fair representation of the type of policy proposed in the bill.

Comparative Results

In addition to the national economy, emissions, and changes in energy industries, the REMI study looked at economic impacts across the U.S. The study then compared these results to a business-as-usual case where there is no price on carbon.

Here are the results, compared to business as usual:

  • CO2 emissions decline by 33 percent after 10 years and 52 percent after 20 years. That’s because of strong, steady market-driven changes in the ways we make and consume energy.
  • National employment increases by 2.1 million jobs after 10 years, and 2.8 million after 20 years. These are jobs that wouldn’t happen without a carbon fee!
  • Reduced air pollution saves 13,000 lives annually after 10 years, with a cumulative 227,000 American lives saved over 20 years.
  • Gross Domestic Product (GDP) increases by $70 to $85 billion from 2020 on, with a cumulative increase of $1.4 trillion after 20 years.

The take-home message is that a plan like the Energy Innovation and Carbon Dividend Act will strengthen the economy and creates jobs while slashing CO2 emissions and improving Americans’ health. More details, regional summaries, graphics, and slides can be found on the REMI report web page.

1. There are three main differences from CCL’s proposal in that (a) REMI modeled the carbon fee starting at $10 per metric ton of CO2 instead of the $15 proposed by CCL; (b) REMI did not consider the possibility of raising the annual escalation from $10 to $15 as specified in H.R.7173; and (c) REMI did not apply the carbon fee to any greenhouse gases other than CO2.

Length
Press play to start the video (60m 47s)
Instructor(s)
Danny Richter
Joe Robertson
Go Deeper
Explore the Economics Policy Network.
Discussion Topic
To Print
Instructions for printing this page on Community.
Category
Training
Topics
Climate Policy
Format
Audio / Video, XVideo, Presentation
File Type
Google Slides, PowerPoint (.pptx)
Training Resources
REMI Report Resources 

See all resources associated with Studies & Reports.