Carbon Pricing Works: An Opportunity For Pennsylvania To Lead On Clean Energy

A Businesses for a Healthy Climate report

PA Report Cover

The Clean Power Plan, issued by the EPA in August 2015, requires certain carbon-pollution reductions from the electric-power sector by 2030 and gives states the flexibility to design their own implementation plans. This Clean Air Act rule-making provides an unprecedented opportunity for Pennsylvania to put in place a carbon-pricing program that accelerates the state’s shift to a vibrant economy, one powered by clean energy and one in which clean energy provides opportunities for both employment and significant capital investments.

Businesses for a Healthy Climate, a project of the Wind Energy Foundation, has been working with community leaders in Pennsylvania to educate Pennsylvania citizens and decision-makers about the business reasons for, and economic opportunities around, reducing carbon pollution. Our initiative is focused on mobilizing support for carbon pricing as a key market-based solution to climate change while avoiding taking a position about which approach to pricing would best suit Pennsylvania.

This report highlights the importance of seizing the opportunity provided by the Clean Power Plan to have a robust debate in Pennsylvania about solutions to carbon pollution. It provides the following important context for this debate:

  • Business leaders, government leaders, and economists from across the political spectrum are strongly advocating for carbon pricing because it is a proven market-based solution to carbon pollution and can help drive a shift toward a vibrant clean-energy economy.
  • The Clean Power Plan gives states the flexibility to enact a variety of types of carbon pricing to meet their Clean Air Act responsibilities, and thus Pennsylvania has the opportunity to design a program that meets the specific needs of its businesses and residents.
  • Pennsylvania can achieve multiple goals beyond cutting carbon pollution with a carbon-pricing program, including stimulating job growth and economic development, reducing distortionary taxes, protecting consumers from rate spikes, and reducing hazardous pollutants from coal-fired power plants.
  • Lessons from three carbon-pricing programs under way in the U.S. and Canada can inform the state’s decision-making on which carbon-pricing approach to take.

In summary, Pennsylvania can transform its economy and become a leader on climate change by seizing the historic opportunity provided by the Clean Power Plan to enact a strong market-based carbon-pricing program. Enacting a well-designed carbon-pricing program in Pennsylvania also will help build momentum for an economy-wide carbon-pricing program at the national level, which will be critical in order for the United States to exercise global leadership on climate change.

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