A Carbon Tax Paper Published!

Previously I have conducted an extensive study on the impact of a carbon tax in Washington state. The initial study was for my master's degree as well as for the Washington State Energy Strategy, a state energy planning project that I worked for at the Washington State Department of Commerce; this phase of the study was completed last summer.

Since I left the US to begin my work for the Japanese government, I continued to refine the model to forecast the impact of a carbon tax on greenhouse gas emissions. At the same time, I wanted to share my study more broadly with other energy policy experts, so I decided to publish my study on an academic journal called Energy Policy.

The publication process on an academic journal typically stretches over a year, but I am glad to announce that my article is published much sooner than expected on its September edition. This article focuses on the methodology and analysis results of my forecasting model called C-TAM, which stands for carbon tax analysis model.

Through the review process, several comments were directed toward how C-TAM treats the impact on the electric grid, and in response I added a new scenario called "aggressive fuel mix change scenario" where a carbon tax curb the demand for coal in respect to its high carbon content (= coal-fired power plants are most carbon intensive means to generate electricity).

This scenario results in larger impact on greenhouse gas emissions as the above figure shows. While I noted this scenario as an alternative scenario to the base scenario called "standard fuel mix change scenario," it may actually be more realistic than the base scenario.

A large uncertainties associated with the impact on the electric grid is still the major weakness of the model. Furthermore, I believe that the price elasticity of demand, an indicator of the degree to which a change in price induces a change in energy demand, for transportation fuels may need reassessment after the gas price began to rise dramatically since 2007.

C-TAM still has rooms for improvement, but this publication can be a significant milestone to rationalize the discussions about a carbon tax, or more broadly the development of energy policy portfolio. I have been receiving inquiries from various folks about C-TAM from other parts of the US, and I hope it can play a pivotal role in implementing a carbon tax worldwide to reduce greenhouse gas emissions on a global scale.

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