Policy Options For Reducing Co2 Emissions A Cbo Study February 2008

There is a growing scientific consensus that rising concentrations of carbon dioxide (CO2) and other greenhouse gases, which result from the burning of fossil fuels, are gradually warming the Earth's climate. The amount of damage associated with that warming remains uncertain, but there is some risk that it could be large and perhaps even catastrophic. Reducing that risk would require restraining the growth of CO2 emissions and ultimately limiting those emissions to a level that would stabilize atmospheric concentrations which would involve costs that are also uncertain but could be substantial. The most efficient approaches to reducing emissions of CO2 involve giving businesses and households an economic incentive for such reductions. Such an incentive could be provided in various ways, including a tax on emissions, a cap on the total annual level of emissions combined with a system of tradable emission allowances, or a modified cap-and-trade program that includes features to constrain the cost of emission reductions that would be undertaken in an effort to meet the cap. This Congressional Budget Office (CBO) study prepared at the request of the Chairman of the Senate Committee on Energy and Natural Resources compares those policy options on the basis of three key criteria: their potential to reduce emissions efficiently, to be implemented with relatively low administrative costs, and to create incentives for emission reductions that are consistent with incentives in other countries. In keeping with CBO's mandate to provide objective, impartial analysis, the report contains no recommendations.

This Congressional Budget Office (CBO) study--prepared at the request of the Ranking Member of the House Committee on Science--presents an overview of issues related to climate change, focusing primarily on its economic aspects. The study draws from numerous published sources to summarize the current state of climate science and provide a conceptual framework for addressing climate change as an economic problem. It also examines public policy options and discusses the potential complications and benefits of international coordination. In keeping with CBO's mandate to provide impartial analysis, the study makes no recommendations.

"TRB Special Report 307: Policy Options for Reducing Energy Use and Greenhouse Gas Emissions from U.S. Transportation examines the potential for policies to yield major changes in transportation energy use and emissions trends by policy measures targeting cars and light trucks, medium and heavy trucks, and commercial airliners. These three modes are by far the largest users of energy by U.S. transportation because they account for the vast majority of passenger trips and freight. According to the committee that produced the report, it will take more than tougher fuel economy standards for U.S. transportation to significantly cut national petroleum use over the next half century. It will likely require a combination of measures that foster consumer and supplier interest in vehicle fuel economy, alternative fuels, and a more efficient transportation system. Major policy options examined in the report-fuel taxes, vehicle efficiency standards, fuel standards, infrastructure investments, and coordinated transportation and land use planning-have the potential to bring about large energy and emissions savings from these modes over time; however, each option presents particular challenges with respect to the scope and timing of its impacts. The report suggests that combining transportation policy options to increase the timeliness and expand the scale and scope of the response may be warranted. Saving energy in transportation can have important implications for the cost of securing the world's oil supplies, since transportation accounts for most of the petroleum consumed in the United States. It can also help with controlling the buildup of greenhouse gases (GHGs), which will require major reductions in carbon dioxide (CO2) emissions from economic sectors that are heavy users of carbon-rich fossil fuels. Scientific analyses and models indicate a need to stabilize atmospheric concentrations of CO2 and other GHGs by the middle of this century to reduce the risks of climate change. A response by the transportation sector to this energy and emissions challenge will be important because it produces between one-quarter and one-third of all of the CO2 emitted from the country's energy consumption."--Publisher's website.