Decarbonization of the United States with a CO2 price?

We have modelled the effectiveness of a CO2 price for decarbonizing the United States, using a granular model of US emissions, built up commodity-by-commodity and sector-by-sector.

We find that a real $40/ton CO2 price, starting in 2021, escalating by 5% pa above inflation, has potential to decarbonize the entire country by 2050. A c57% reduction is possible by 2035, under the latest proposals from the Climate Leadership Council.

Our model calculates the incremental impacts on energy, oil, gas, coal, electricity, investment and jobs (charts below). Input assumptions can be flexed in Cells F6:14 of the ‘Charts’ tab, and in the ‘TransitionThemes’ model.

Please downlaod the model to flex and stress-test assumptions.