A Carbon Fee
Can Speed Deployment
Developing innovate technologies is key to solving climate change. But we also need to ensure new, low-carbon technologies are rolled out across the economy.
History shows that deployment of new
innovations isn’t always quick or automatic.
Take the invention of the automobile: it took 30 years to replace
the horse in the U.S. transportation system.
Without some sort of a market pull, even the most
promising climate solutions might stay on the sidelines,
slowing our efforts to address climate change.
The government is a large investor in research and development that has the potential to create innovative breakthroughs for climate and energy:
In 2019, the U.S. Department of Energy spent $14 billion on R&D.
Total federal spending on non-health R&D topped $60 billion that year, including both direct spending and tax breaks for companies’ own R&D efforts.
The private sector invests more than 4x as much every year.
To get a return on this investment for the
environment and the economy, we need to see the
best technologies brought to market–and fast.
So, how do we ensure climate technologies
quickly find their place in the economy?
There are essentialy three policy tools:
1
Subsidies to cut the cost of technologies
2
Regulations to mandate the use of technologies
3
An economy-wide carbon price to create a market incentive for technologies
Of these three tools, an economy-wide carbon
fee is the only one that can achieve the rapid uptake of carbon-
efficient technologies at scale, across sectors.
A carbon fee…
Offers a price advantage
for carbon-efficient
solutions that is stable
and predictable
Doesn’t depend
on future
government action
to be effective
Stokes demand
for low-carbon
solutions across the
economy, not just
in certain sectors
A carbon price is the best tool we have for
expediting the deployment of low-carbon technologies