New data released last week by the Australian government show that electricity emissions have dropped 7.6 percent since the introduction of a carbon tax in July 2012. Experts suggest that a greater emissions impact could be achieved if businesses believed that carbon pricing “was here to stay” and current carbon prices were increased.
RFF’s Anthony Paul, Blair Beasley, and Karen Palmer examined imposing a carbon tax on the US electricity sector and found that a lower tax “reduces emissions by reducing demand and through the substitution of gas for coal, whereas [a higher tax] induce[s] switching to wind and nuclear generation.” As current conversations about controlling power sector emissions in the US focus on regulations under the Clean Air Act, RFF’s Dallas Burtraw, Joshua Linn, Karen Palmer, and Anthony Paul also examine a variety of options that might be taken by the US Environmental Protection Agency and the states. While they identify various cost-effective options, they also point out that “flexible approaches that may be possible under the Clean Air Act in fact do introduce a shadow price on emissions.”
Maybe the dingo ate your baby.