By Robinson Meyer

Over the past year, my climate reporting has had a few preoccupations. They include:

  1. Whether President Joe Biden will succeed in passing a major climate bill;
  2. The degree to which climate change is already a profound concern to the economy, and indeed whether the climate problem is more about “money” than “science”; and
  3. Carbon taxes.

Now, I have an occasion to bring all three together! A new analysis from researchers at the University of Chicago and the Rhodium Group, an energy-research firm, finds that one of President Joe Biden’s marquee energy proposals—the one of the most likely to make it through Congress—has a good chance of working.

Biden’s clean-energy tax credits—a set of incentives that would push the United States to generate more electricity through wind, solar, and other zero-carbon resources—would be one of the most cost-effective climate policies in American history, according to the analysis.

The researchers’ study, which has not been peer-reviewed, finds that the policy’s benefits will be three to four times larger than its costs, creating as much as projected $1.5 trillion in economic surplus while eliminating more than 5 billion tons of planet-warming carbon pollution through 2050.

“I will confess I was always a little skeptical of the tax incentives. I was concerned that they were expensive on a cost-per-ton-abated basis,” Michael Greenstone, a co-author of the study and the Milton Friedman Distinguished Service Professor in Economics at the University of Chicago, told me. “I came away from this quite surprised at how beneficial this was.” (I should disclose that I worked with Greenstone last year when I was a journalist in residence at the University of Chicago’s Energy Policy Institute.)

“It’s very rare that we get opportunities to have policies with a benefit-to-cost ratio of 3 or 4 to 1. Normally it’s, like, 1.3 to 1, and we economists get very excited,” he said.

Continue Reading at The Atlantic…

Areas of Focus: Energy Markets
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Energy Markets
Well-functioning markets are essential for providing access to reliable, affordable energy. EPIC research is uncovering the policies, prices and information needed to help energy markets work efficiently.
Renewable Energy
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Renewable Energy
Lower technology costs and supportive public policies are driving an increase in renewable energy in markets around the world. EPIC research is assessing the costs, benefits, and efficiency of policies...
Climate Change
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Climate Change
Climate change is an urgent global challenge. EPIC research is helping to assess its impacts, quantify its costs, and identify an efficient set of policies to reduce emissions and adapt...
Climate Law & Policy
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Climate Law & Policy
As countries around the world implement policies to confront climate change, EPIC research is calculating which policies will have the most impact for the least cost.
Assessing the Costs and Benefits of Clean Electricity Tax Credits
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Assessing the Costs and Benefits of Clean Electricity Tax Credits
EPIC and Rhodium Group measure the costs and benefits of clean energy tax incentives and find the benefits are about four times greater than the costs and would lead to...