Abstract

http://ssrn.com/abstract=2440925
 


 



A State Tax Approach to Regulating Greenhouse Gases Under the Clean Air Act


Samuel D. Eisenberg


Stanford Law School

Michael W. Wara


Stanford Law School

Adele C. Morris


The Brookings Institution

Marta Darby


Stanford University

Joel Minor


Independent

May 22, 2014


Abstract:     
The economic literature supports the case that an emissions excise tax is one of the most cost- effective approaches to reducing greenhouse gas (GHG) emissions. The United States Environmental Protection Agency (EPA) has begun the process of regulating GHG emissions under section 111(d) of the Clean Air Act. Under this provision, EPA issues an emission guideline for states based on the agency’s assessment of the best system of emission reduction (BSER) for a particular type of stationary air pollution source. States then develop compliance plans that include standards of performance for pollution sources that reflect the BSER and are consistent with the emission guideline. The states submit these compliance plans to EPA for approval. This paper walks through the legal framework to show that EPA can allow states to adopt a tax on carbon dioxide (CO2) or other GHGs as a standard of performance. We also show that EPA can encourage this approach by providing the states with model tax levels and compliance schedules in its emission guideline. We conclude that a state-level carbon tax is a viable legal mechanism for cutting greenhouse gas emissions from power plants and other stationary sources under the Clean Air Act.

Number of Pages in PDF File: 18

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Date posted: May 24, 2014  

Suggested Citation

Eisenberg, Samuel D. and Wara, Michael W. and Morris, Adele C. and Darby, Marta and Minor, Joel, A State Tax Approach to Regulating Greenhouse Gases Under the Clean Air Act (May 22, 2014). Available at SSRN: http://ssrn.com/abstract=2440925 or http://dx.doi.org/10.2139/ssrn.2440925

Contact Information

Samuel D. Eisenberg
Stanford Law School ( email )
559 Nathan Abbott Way
Stanford, CA 94305-8610
United States
Michael W. Wara (Contact Author)
Stanford Law School ( email )
559 Nathan Abbott Way
Stanford, CA 94305-8610
United States
Adele C. Morris
The Brookings Institution ( email )
1775 Massachusetts Ave, NW
Washington, DC 20036
United States
HOME PAGE: http://www.brookings.edu/experts/morrisa.aspx
Marta Darby
Stanford University ( email )
Stanford, CA 94305
United States
Joel Minor
Independent ( email )
No Address Available
United States
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