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The Center for Climate and Energy Solutions seeks to inform the design and implementation of federal policies that will significantly reduce greenhouse gas emissions. Drawing from its extensive peer-reviewed published works, in-house policy analyses, and tracking of current legislative proposals, the Center provides research, analysis, and recommendations to policymakers in Congress and the Executive Branch. Read More
 

Climate Change & International Security: The Arctic as a Bellwether

Climate Change & International Security: The Arctic as a Bellwether

May 2012

by Rob Huebert, Heather Exner-Pirot, Adam Lajeunesse, and Jay Gulledge

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Executive Summary

In its most recent assessment of global climate change, the U.S. National Academy of Sciences concluded, “A strong body of scientific evidence shows that climate change is occurring, is caused largely by human activities, and poses significant risks for a broad range of human and natural systems.” Impacts and rates of change are greatest in the Arctic, where temperatures have been increasing at about twice the global rate over the past four decades. The rapid decline in summer sea ice cover in the past decade has outpaced scientific projections and is drawing international attention to emerging commercial development and transport opportunities previously blocked by the frozen sea. The Arctic is therefore a bellwether for how climate change may reshape geopolitics in the post–Cold War era.

The trend toward seasonally open waters is driving increased interest and investment in oil and gas exploration, shipping, and fishing in the Arctic. The recent economic recession has not affected these developments significantly, as they were always intended to be middle- to long-term developments following the progression of sea ice retreat. Indeed, high oil prices and advances in technology continue to support the drive toward offshore drilling in Arctic waters. The global economy, which has begun to show signs of recovery, is likely to rebound long before oil and gas exploration and shipping could be scaled up in the Arctic. China, India and the rest of the developing world’s growing middle classes will need oil and gas and other resources, and the world’s shipping routes are already so congested that the development of northern shipping routes is not a question of if, but when.

In response to these changes, many of the Arctic states have begun to re-examine their military capabilities to operate in the Arctic region. Some have started to rebuild their military forces, while most of the other states are drawing up plans to begin the rebuilding process. Multilateral organizations and non-Arctic states are also looking for new roles in the Arctic. All of these actors are attempting to come to terms with the meaning of Arctic security, a concept that was relatively simple during the icy decades of the Cold War. Recent national policy developments arising from the effects of climate change on the Arctic commons demonstrate that climate change is indeed a national and international security interest in the traditional strategic sense.

As the emerging Arctic security environment is in a very early stage of development, whether it will ultimately be predominantly cooperative or predominantly competitive remains an open question. Although the Arctic states invariably emphasize their desire to maintain a cooperative environment, several have stated that they will defend their national interests in the region if necessary. To gauge the geopolitical winds in the Arctic, this study catalogs and analyzes dozens of major policy statements and actions by the Arctic states, other states with Arctic interests, and multilateral organizations between 2008 and 2012.

As a framework for interpreting the totality of these statements and actions, we compare geopolitical developments to date with three future security scenarios posited by the Arctic Council in its Arctic Marine Shipping Assessment 2009 Report. We adopt these scenarios as testable hypotheses for the purposes of this study:

  • Hypothesis 1: There is no emerging security environment and the circumpolar states have no new interests that would increase competition or conflict in the region. If this hypothesis is correct, a close examination of the actions of the circumpolar world should reveal no significant new foreign and defense policies and defense procurement decisions in relation to the Arctic.
  • Hypothesis 2: While showing renewed interest in the Arctic, the interested states are committed to developing and strengthening multilateral instruments of cooperation. New military capabilities are directed towards building local constabulary capacity and largely eschew escalation of war-fighting capability.
  • Hypothesis 3: Increasing accessibility to Arctic resources because of climate change, along with a growing and increasingly modern military presence of strategic rivals in the region, becomes a recipe for competition and potential conflict. Under this hypothesis, the circumpolar states should be actively examining their core interests in the region, expressing concern over what other states are planning or doing in the region, and developing more assertive northern defense postures, including rebuilding their northern war-fighting capabilities. It is also expected that the various actors would be commencing the process of developing new defensive relationships and either strengthening old alliances or building new ones.

We assess which of these hypotheses most closely resembles the behavior of the key actors as revealed in their statements and actions. On the basis of the prevailing scenario(s), we consider the potential for instability and conflict in the Arctic and offer recommendations on how the states should proceed to ensure the region develops in a cooperative and peaceful manner.
 

Main Findings

Finding 1: Unprecedented national attention to Arctic policy.

A confluence of major policy announcements between 2008–2012 have followed Russia planting its flag at the North Pole in August 2007, the same week that Canada announced significant new Arctic military investments. Since then, major Arctic policy announcements have been made by Canada, Denmark, Norway, Russia, the United States, the European Union, the Nordic countries (Nordic Supportive Defence Structures, NORDSUP) and the North Atlantic Treaty Organization (NATO). It is unprecedented to have numerous, major policy announcements—not just for the Arctic but for international affairs in general—from so many major players in such a short timeframe.

Finding 2: Emphasis on environmental security.

By 2005 all Arctic governments and many others had come to officially accept that climate change was melting the Arctic ice cover, which meant that the Arctic was becoming more accessible to both the Arctic states and to the international community. This new accessibility raised two main concerns for the Arctic states. First was the need to maintain environmental security. In this context, environmental security can be understood as avoiding or mitigating acts leading to environmental damage or deterioration that could violate the interests of states and their populations, in particular their northern and northern indigenous peoples. The need to maintain the region’s environmental integrity in the face of increased economic activity was a prevalent theme in much of the Canadian, American, and Russian documentation. The second concern was the need for a constabulary capacity to monitor who arrives in each state’s waters and what they are doing there. Most of the Arctic states said they had inadequate means to police the area. Much of the proposed Arctic security policy has been justified as improving the states’ abilities to meet these new environmental and constabulary needs.

Finding 3: Desire for cooperation but resolve to protect national interests.

In most of their statements, the states have reiterated their commitment to collegiality and the principles of international law to ensure that an accessible Arctic is developed in a peaceful and cooperative manner. On the other hand, many of the Arctic states’ actions and statements make it clear that they intend to develop the military capacity to protect their national interests in the region. This approach implies that while diplomacy and cooperation are preferred, the Arctic nations will reserve the right to use unilateral force to defend their interests if necessary.

Finding 4: Remilitarization of the Arctic.

While the two previous findings suggest that the Arctic states are focused on building a cooperative security environment in the region, there is a third, apparently contradictory trend toward modernizing their military forces in the Arctic. Some have already begun rebuilding their Arctic military capabilities, and most of the others are drawing up plans to do so. Consequently, if political cooperation in the region should sour, most of the Arctic nations will have forces that are prepared to compete in a hostile environment.

Finding 5: Non-Arctic states and organizations seek roles in the Arctic.

The EU and NATO have been examining the issues of governance and security in the Arctic. NATO’s initial focus appears to be on improving coordination of security-related issues, such as search and rescue. Given the importance of the region to NATO members such as Canada, Norway and the United States, it seems likely that NATO will remain engaged in the region. The EU’s interest is framed in the context of ensuring that new governance mechanisms are designed to include the interests of all European states. The EU has also issued policy statements that place a strong emphasis on protecting the environment. Separate from the EU, France has announced that it plans to provide its military with some Arctic capabilities. Although it has not expressed geopolitical interest in the Arctic, China plans to increase its scientific research activities in the region and has added a strategic studies department to its Polar Research Institute.

Finding 6: Underlying causes of policy developments.

The principal cause of renewed national interest in the Arctic is the increasing accessibility of Arctic waters resulting from global warming and new maritime technologies. Accessibility leads to the potential for new sea routes or the expansion of old ones, an important issue for both Russia and Canada. Western nations have focused on augmenting scientific research, environmental protection, sustainable development, and a constabulary and military presence. The United States stake in the Arctic is comparatively small, and historically it has tended to act with minimal interest in the region compared with the other Arctic states. Russia has invested tens of billions of dollars in Arctic oil projects, and its recent policy statements and actions suggest that it will act assertively to safeguard its oil wealth and position in the Arctic. Although oil and gas are less central to the core interests of the rest of the circumpolar powers, the importance of Arctic oil will grow for all nations as oil prices continue to rise and the desire for energy security grows.
 

Conclusions & Recommendations

Taken as a whole, the Arctic policy statements and actions taken since 2008 clearly disprove Hypothesis 1. There can be no doubt that there is renewed national and international interest in the Arctic along both economic and strategic lines. However, distinguishing between Hypothesis 2 and Hypothesis 3 is more difficult, as many of the statements and actions of the polar states indicate both a sincere desire for peaceful cooperation and serious preparations for strong military capabilities to defend core national interests in the region.

While Hypothesis 2 is the preferred outcome of all Arctic states, significant national investments in establishing a modern military capability in the north signals that core national interests are the top priority of most of them. Under these circumstances, competition and conflict (i.e. Hypothesis 3) could become the Arctic reality if cooperative mechanisms cannot keep pace with developments or otherwise prove inadequate to settle international disputes in the region. Continued monitoring of national and international developments in the Arctic will help clarify whether conditions are tipping more toward cooperation or more toward competition. A living component of this study will continue to track these developments over time and can be accessed via the Web at http://cmss.ucalgary.ca/arcticsecurity.

Maintaining security and peace in the Arctic will require adapting policies and institutions to the emerging environment there. First, the Arctic states need to strengthen existing multilateral institutions and agreements, especially those related to security. The U.S. Department of Defense, for example, wisely advocates the accession of the United States to the United Nations Convention on the Law of the Sea, which provides an important framework by which to resolve disputes over, for example, the delimitation of the continental shelf in the Arctic. States also need to develop practical bilateral and multilateral agreements whereby their new Arctic capabilities can work together. Where practices develop to allow cooperation, that cooperation is easier to maintain should relations become strained due to factors developing outside of the Arctic. An early example of such practices is the development of a search and rescue treaty, the first legally binding agreement to come out of the Arctic Council, which was signed by member states in May 2011. Joining these multilateral regimes, however, is not enough; Arctic states must renew a commitment to comply with existing obligations and implement their commitments as well.

Second, the Arctic states will need to acknowledge and deal with the renewal of military strength in the Arctic. This need runs counter to the tendency of states to publicly downplay the potential for military conflict in the Arctic in order to emphasize their legitimate desire for cooperation. The Arctic Council should reconsider its existing prohibition on discussing military security issues. Failure to do so may encourage the development of alternative forums such as the “Arctic Five” group of states (Canada, Denmark, Norway, Russia and the United States) that met at Ilulissat, Greenland in May 2008 and Quebec, Canada in March 2010. The challenges facing the Arctic are multi-dimensional and require both bilateral solutions, such as the Russian-Norwegian maritime border agreement, as well as a unified international response. A sectoral response to the multitude of issues that are increasingly developing in the region threatens to create a piecemeal, ad hoc governance system that may act to prevent the level of coordination needed to resolve future disputes.

The widely held notion that climate change will occur gradually over the 21st century, allowing ample time for society to adapt, is belied by the unprecedented pace of both climate change and policy developments in the Arctic today. Such rapid changes will challenge governments’ abilities to anticipate and diplomatically resolve international disputes within the region. The lesson to the rest of the world might be to anticipate changes and adapt and/or react as soon as possible, using new and existing diplomatic tools, before core national interests take center stage and promote competition and possibly conflict. With global warming, time is of the essence, not only for mitigation, but for adaptation at both the community level and the international level.

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Low-Carbon Innovation Forum

Promoted in Energy Efficiency section: 
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Watch the videos of the low-carbon innovation forum.

Low-Carbon Innovation Forum

Tuesday, April 24, 2012
8:45 am - 12:00 pm 
7th Floor Knight Conference Center at the Newseum 
555 Pennsylvania Ave., N.W., Washington, DC
 

Innovating the next generation of low-carbon technologies is essential for combating climate change. It is also an enormous economic opportunity, especially for early market leaders. The troubles encountered by clean tech ventures such as Solyndra have sparked debate in Washington over government’s role in advancing low-carbon technologies. This Forum brings together representatives of industry and government to explore the vital roles played by each along the path to commercialization – from development and demonstration to scale-up, then mass deployment – and how to ensure U.S. success in the growing low-carbon market. Topics will include collaborative R&D in electric power, the military’s role in driving energy efficiency, and how tougher fuel economy standards have helped revitalize the U.S. auto industry.


Keynote Remarks


 

Teaming Up on R&D

  • Dr. Cheryl Martin, Deputy Director for Commercialization, ARPA-E
  • David Mohler, Chief Technology Officer, Duke Energy
  • Revis James, Director, Energy Technology Assessment Center, EPRI


 

The Power of Procurement

  • Dr. Dorothy Robyn, Deputy Undersecretary for Installations & Environment, 
    U.S. Department of Defense
  • Mark Wagner, Vice President, Government Relations, Johnson Controls Inc.
  • John Sindelar, Client Industry Executive, HP Enterprise Service


 

Driving Mass Deployment

  • Ronald Medford, Deputy Administrator, NHTSA
  • Mike Robinson, Vice President, Sustainability and Global Regulatory Affairs, 
    General Motors
  • Brad Markell, International Representative, United Auto Workers

 

Listen to a podcast of C2ES President Eileen Claussen discussing the roles business and government play in advancing low-carbon innovation.

Follow the event on Twitter using #BizInnovate

Can Nuclear Be Part of Our Clean Energy Future?

Nuclear energy is often touted as a reliable, carbon-free element in our electricity portfolio, but three major challenges must be overcome before it can play a bigger role in our energy mix: cost, reactor safety, and waste disposal. Recent progress on each of these fronts shows that nuclear energy may indeed be a greater component of our clean energy future.

As a zero-carbon energy source that also has the highest capacity factor, new nuclear generation is especially well suited to provide baseload generation, which is an emerging gap in our electricity system. As electricity demand rises, aging coal plants are retired, and we pursue greenhouse gas emission reductions, there is a growing need for new low- and zero-carbon baseload electricity generation. Without technological breakthroughs in electricity storage technology, wind, and solar, energy cannot adequately meet baseload demand due to intermittency. Natural gas is lower emitting than coal, but it still emits greenhouse gases and has historically been vulnerable to price volatility.  

March 2012 Newsletter

Click here to view our March 2012 newsletter.

Learn about new EPA power plant rules, an action plan to get more electric vehicles on the road, recommendations from the National Enhanced Oil Recovery Intiative to boost domestic oil production while cutting CO2 emissions from power plants, and more in C2ES's March 2012 newsletter.

Bloomberg Editors Endorse NEORI Recommendation

March 27, 2012
Bloomberg Editorial

In a March 27 editorial, Bloomberg editors addressed how the U.S. can learn from China's push for capturing carbon and highlighted the work of the National Enhanced Oil Recovery Initiative (NEORI), a group of industry, state, environmental and labor leaders convened by C2ES and the Great Plains Institute. In the piece, Bloomberg endorses NEORI’s recommendation that Congress create a production tax credit for power companies that capture CO2 and send it to oil companies for enhanced oil recovery. Below is an excerpt from the editorial.

The federal government, too, could help push the technology forward, by taking up a smart strategy that has been suggested by a coalition of oil industry executives, environmentalists and state officials called the National Enhanced Oil Recovery Initiative. It has to do with the other side of the carbon- capture equation -- what to do with the CO2 once you’ve taken it out of the power-plant exhaust.

China’s Huaneng plant sells its carbon dioxide to companies that make carbonated drinks and dry ice. Duke envisions turning it into solid carbonate to be used for building materials or road construction. Some innovators are feeding CO2 to microscopic algae to produce either fuel or proteins used in nutrition supplements or animal feed.

But it can also be used to coax more oil out of the earth. Since 1972, oil companies have injected carbon dioxide taken from natural sources to free up crude trapped in rock formations. The industry operates 3,900 miles of pipelines carrying 65 million tons of CO2 per year, and “enhanced oil recovery,” as the technique is known, accounts for 6 percent of U.S. oil production.

With new technology and enough CO2, the industry could use enhanced recovery to increase production by 67 billion to 137 billion barrels, according to a report from the National Enhanced Oil Recovery Initiative. The report envisions using 20 billion to 45 billion metric tons of CO2 from carbon capture -- the total amount expected to be produced by power plants for the next 10 to 20 years.

We endorse the coalition’s recommendation that Congress create a production tax credit for power companies that capture CO2 and send it to oil companies for enhanced recovery. By increasing domestic oil production, such a credit is estimated to be able to pay for itself within a decade.

Click here to read the full editorial

 

Greenhouse Gas Standards for Refineries

What are New Source Performance Standards (NSPS)?

The Clean Air Act requires the Environmental Protection Agency (EPA) to regulate pollution from new, modified and reconstructed facilities through the New Source Performance Standards (NSPS) program, established in Sec. 111 of the Act. (Confusingly, the New Source Performance Standard provisions of the Clean Air Act also require EPA to set standards for existing sources, as described below.) NSPS are technology-based standards which apply to specific categories of stationary sources. As with many other Clean Air Act programs, EPA establishes a federal standard for a given category of facility, which state environmental agencies then translate into requirements for individual facilities. On March 27, 2012 EPA proposed NSPS for electric power plants. None have yet been proposed for refineries.

Under Section 111(b), EPA must establish performance standards for new and modified sources. An NSPS requires facilities to attain an emissions level that "reflects the degree of emissions limitation achievable through the application of the best system of emissions reduction which (taking into account the cost of achieving such reduction and any non-air quality health and environmental impact and energy requirements) the Administrator determines has been adequately demonstrated." In setting this performance standard, EPA has some discretion to distinguish among classes, types, and sizes of facilities within source categories. However, the limit EPA sets must take the form of a standard, and it may not prescribe a particular technology itself. The law ostensibly requires EPA to review the technological options available for emissions reduction and, if appropriate, establish a new standard every eight years, but in practice, standards have typically remained unexamined and unchanged for much longer than eight years, often because of resource constraints at EPA.

Under Sec. 111(d) of the Clean Air Act, EPA is required to set standards for existing stationary sources. Again, EPA designates categories and establishes minimum technology-based standards, and states are delegated the authority for establishment, implementation, and enforcement of these performance standards. As with implementation of the National Ambient Air Quality Standards (NAAQS) program, EPA must approve state plans for meeting the requirements of Sec. 111(d) or implement a federal implementation plan if the state plan is not satisfactory. Unlike the NAAQS program, Sec. 111(d) appears to allow EPA to give the states broad discretion in establishing their programs.

Who are the covered entities?

The definition of "refinery" EPA uses comprises establishments primarily engaged in refining crude petroleum into finished petroleum products, including gasoline, kerosene, asphalt, lubricants, and solvents, among others. Under this definition, there are 147 refineries in the United States.

Why a Refinery NSPS for greenhouse gases?

Petroleum refineries have been subject to new source performance standards for a variety of pollutants since the Clean Air Act was passed in 1970. EPA is required to establish NSPS for GHGs under the Clean Air Act, as was clarified in the US Supreme Court case Massachusetts v. EPA.

Following other required regulatory steps, in a 2010 judicial settlement, EPA committed to a timeline for promulgating NSPS for greenhouse gases for two existing source categories: power plants and oil refineries. It held five, broad-based, sector specific listening sessions on the topic and received comments from numerous stakeholders. The deadline for a proposed refinery rule outlined in the settlement was December 10, 2011. At EPA's request, this deadline was extended to September 30, 2011, and then a further delay was agreed to. It is not clear when EPA will release proposed regulation for refineries, but under the court-approved settlement agreement, the final refinery NSPS were due on November 10, 2012.

C2ES Resources:

  • Learn more about Power Plant NSPS
  • Statement: Eileen Claussen comments EPA's proposed greenhouse gas standard for new power plants

References:


1. Despite the name "New Source Performance Standard," Sec. 111 requires the regulation of both new and of existing sources for pollutants that are not otherwise regulated as toxic pollutants or through the National Ambient Air Quality Standards Program. Because GHGs are not regulated in either of these manners, Sec. 111 would apply.

 

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Eileen Claussen Comments on EPA's Proposed Greenhouse Gas Standard for New Power Plants

Statement of Eileen Claussen
President, Center for Climate and Energy Solutions

March 27, 2012

We welcome EPA's proposal today to limit greenhouse gas emissions from new power plants and urge the Administration to quickly move forward with rules for existing plants, which account for 40 percent of U.S. carbon dioxide emissions. Power companies face huge investment decisions as they meet new pollution standards and retire or upgrade outdated plants. They need to know the full picture - including future greenhouse gas requirements - in order to keep our electricity supply as reliable and affordable as possible.

While highly efficient natural gas-fired power plants would meet the standard proposed today, new coal-fired power plants not already in the pipeline could likely meet the standard only by capturing and permanently sequestering their greenhouse gas emissions. This underscores the urgency of stronger public and private investment in carbon capture and storage technologies. The United States, China and India - the world's three largest greenhouse gas emitters - all have substantial coal reserves. If we can't figure out how to get the energy value out of coal with a minimal carbon footprint, we will not solve the climate problem.

With prospects for substantial public investment in CCS unclear, C2ES is now working with policymakers and stakeholders on ways to expand enhanced oil recovery using captured carbon dioxide - an approach that can boost domestic oil production, reduce greenhouse gas emissions, and help lay the groundwork for full-scale carbon capture and storage.

Contact: Rebecca Matulka, 703-516-4146

Learn more about EPA's greenhouse gas standard for new power plants.

 

Capturing CO2 Emissions to Produce Domestic Oil: NEORI and CO2-EOR’s Unique Solution

Bloomberg editors endorse NEORI's production tax credit recommendations

Few policy options can be a win-win for both political parties, as well as industry, environmental advocates, and labor. Similarly, increasing oil production and decreasing carbon emissions are thought of as conflicting goals. Yet, a solution may be on the horizon. On February 28, the National Enhanced Oil Recovery Initiative (NEORI) released its recommendations for advancing enhanced oil recovery with carbon dioxide (CO2-EOR). NEORI is a broad coalition of industry, state officials, labor, and environmental advocates

While NEORI participants might not agree on many energy and environmental issues, each participant recognizes the vast potential of CO2-EOR and worked toward producing a set of policy recommendations for its expansion. CO2-EOR already produces 6 percent of U.S. oil, and it could potentially double or triple existing U.S. oil reserves. In comparison to other options, CO2-EOR offers an extraordinarily large potential expansion of domestic oil production, while also advancing an important environmental technology.

Market Mechanisms: Understanding the Options

Market Mechanisms: Understanding the Options

March 2012

Download the full brief (PDF)

Resources:

 

The most recent study on climate change by the U.S. National Academy of Sciences concluded that, “Climate change is occurring, is caused largely by human activities, and poses significant risks for—and in many cases is already affecting—a broad range of human and natural systems. (See Climate Change 101: Science and Impacts.) The combustion of fossil fuels has contributed to the expansion of the global economy since the start of the Industrial Revolution. It has also substantially increased the concentration of carbon dioxide, the primary greenhouse gas in the atmosphere. The cumulative impact of these emissions poses significant economic risks. Policies to reduce emissions are required if we are to avoid the most costly damages of a rapidly changing climate. This brief describes how market-based policies can achieve climate goals more cheaply and efficiently than alternative policy structures—all while driving innovation to develop more cost effective, clean energy solutions that will serve as the foundation for strong economic growth throughout the 21st century.

 

 

 

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Carbon Tax

The most basic form of a market-based policy is a tax that sets a price on each unit of pollution. A tax on pollution provides an incentive for an entity to reduce the quantity of pollution produced by changing its processes or adopting new technology. Taxes on greenhouse gases (GHGs) can come in two broad forms: an emissions tax, which is based on the quantity of emissions an entity produces; and a tax on goods or services that are generally GHG-intensive, such as a carbon tax on gasoline.

A pollution tax differs from a cap-and-trade system in that the latter places a quantitative limit on emissions while the former places a limit on the price of the pollutant. Both policy instruments can be equally effective in reducing pollution.

Internationally, a number of countries, along with a number of local and regional governments, have implemented a carbon tax or energy taxes related to their carbon content. For example, South Africa is considering the introduction of a carbon tax from 2016 onwards. In July 2014, Australia repealed its carbon tax, which was to transition to a cap-and-trade program.

In the United States, the last several Congresses have seen the introduction of carbon tax proposals. In the current Congress (2013-2014), five carbon pricing proposals have been introduced.

There has been increased attention on a revenue-neutral carbon tax as a way to pay for reductions in taxes on productive activities, such as income tax, or tax territoriality reform, and offsetting those reductions by taxing harmful activities. Recent studies estimate a $20 tax on carbon could raise between $1.2 to $1.5 trillion in the next 10 years.

Neither Congressional leadership nor President Obama have expressed interest in a carbon tax. Nevertheless, the need for new revenues to address the looming fiscal shortfall may shape the discussion of a carbon tax in the current Congress.

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