Speaking at a May 19 hearing of the Subcommittee on Energy of the Committee on Energy and Commerce, Congressman Scott H. Peters referenced a Working Paper authored by MIT CEEPR Research Affiliate Emil G. Dimanchev and Faculty Director Christopher R. Knittel. In an exchange with U.S. Secretary of Energy Jennifer Granholm, Peters highlighted a central message of the MIT CEEPR study, which found that inclusion of a carbon price can meaningfully lower the cost of implementing a climate policy portfolio. “Even a modest carbon price is essential to reduce the cost of decarbonization, generate billions in new revenue, and drive fuel switching to zero-carbon alternatives”, Peters concluded. He also suggested that inclusion of a carbon price could reduce the cost of implementing the American Jobs Plan proposed by the Administration of President Biden. “Researchers at MIT found that a climate package that includes a modest carbon price cuts costs in half compared to a package that lacks a carbon price,” he explained. Peters went on to reference the experience in his home state California, which has relied on a combination of a carbon price and more targeted policies to achieve its ambitious policy objectives.
The MIT CEEPR Working Paper WP-2020-020, “Trade-offs in Climate Policy: Combining Low-Carbon Standards with Modest Carbon Pricing”, was jointly authored Emil G. Dimanchev and Christopher R. Knittel, and published in November 2020. It can be downloaded here. A recording of the May 19 hearing on the fiscal year 2022 budget of the Department of Energy can be accessed here.