Carbon taxes and emissions trading systems have been instituted in many places, such as Denmark and California. But a federal measure in the United States, setting a cap on carbon emissions and letting companies trade their allotments, failed in 2010.
Auto industry. Until now, taxpayers could get up to $7,500 in tax credits for purchasing an electric vehicle, but there was a cap on how many cars from each manufacturer were eligible. The new law will eliminate this cap and extend the tax credit until 2032; used cars will also qualify for a credit of up to $4,000.
Energy industry. The legislation will provide billions of dollars in rebates for Americans who buy energy efficient and electric appliances. Companies will get tax credits for building new sources of emissions-free electricity. The package also includes $60 billion set aside to encourage clean energy manufacturing and penalties for methane emissions that exceed federal limits starting in 2024.
Health care. For the first time, Medicare will be allowed to negotiate with drugmakers on the price of some prescription medicines. The law also extends subsidies available under the Affordable Care Act, which were set to expire at the end of the year, for an additional three years.
Tax code. The law introduces a new 15 percent corporate minimum tax on the profits companies report to shareholders, applying to companies that report more than $1 billion in annual income but are able to use credits, deductions and other tax treatments to lower their effective tax rates. The legislation will bolster the I.R.S. with an investment of about $80 billion.
Low-income communities. The package includes over $60 billion in support of low-income communities and communities of color that are disproportionately burdened by climate change. Among the provisions are grants for zero-emissions technology and money to mitigate the negative effects of highways and other transportation facilities.
West Virginia. The law is expected to bring big benefits to Mr. Manchin’s state, the nation’s second-largest producer of coal, making permanent a federal trust fund to support miners with black lung disease and offering new incentives to build wind and solar farms in areas where coal mines or coal plants have recently closed.
At the same time, Dr. Nordhaus’s model was drawing criticism for underestimating the havoc that climate change would wreak. Like other models, it has been revised several times, but it still relies on broad assumptions and places less value on harm to future generations than it places on harm to those today. It also doesn’t fully incorporate the risk of less likely but substantially worse trajectories of warming.
Dr. Nordhaus dismissed the criticisms. “They are all subjective and based on selective interpretation of science and economics,” he wrote in an email. “Some people hold these views, as would be expected in any controversial subject, but many others do not.”
Heather Boushey, a member of the White House’s Council of Economic Advisers who handles climate issues, says the field is learning that simply tinkering with prices won’t be enough as the climate nears catastrophic tipping points, like the evaporation of rivers, choking off whole regions and setting off a cascade of economic effects.
“So much of economics is about marginal changes,” Dr. Boushey said. “With climate, that no longer makes sense, because you have these systemic risks.” She sees her current assignment as similar to her previous work, running a think tank focused on inequality: “It profoundly alters the way people think about economics.”
To many economists, the approach pioneered by Dr. Nordhaus was increasingly out of step with the urgency that climate scientists were trying to communicate to policymakers. But a carbon tax remained at the center of a bipartisan effort on climate change, supported by a panoply of large corporations and more than 3,600 economists, that also called for removing “cumbersome regulations.”
Article source: https://www.nytimes.com/2022/08/25/business/economy/economy-climate-change.html
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