WASHINGTON (Sept. 28, 2016) – Though current policies restricting the emission of carbon dioxide and other greenhouse gases tend to expand the size of government dramatically, a new policy study from R Street Energy Policy Director Catrina Rorke argues that a fresh perspective would call for removing burdensome taxes and regulations in a way that empower markets to find innovative solutions for the future.

“It’s time for carbon policy that ignites, rather than restrains, the power of markets. …this approach would do better to reduce greenhouse-gas emissions and provide more predictability and flexibility for the market,” Rorke writes. “Most importantly, a properly designed revenue-neutral price on carbon would create the impetus to shrink the size of government at a time when it has been growing perpetually.”

The report notes that while current environmental regulations tend to be both insufficient – failing to adequately address certain types of environmental harm – and prohibitively expensive. In lieu of this approach, Rorke suggests pricing carbon directly, a method that would be both more effective and in keeping with free-market principles.

“A direct carbon price elevates behaviors that result in fewer emissions above behaviors that result in more emissions – like searching out a car with better fuel efficiency – by including some approximate cost for climate damage into every decision,” Rorke explains. “If it costs less to reduce emissions than to pay the tax, those investments will be realized. This isn’t a radical policy that seeks to transform the economy overnight, but rather a steady expression of carbon risk through a transparent signal that lets the market decide how best to reduce emissions over time.”

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