REMI Report

The Impact of a Carbon Fee and Dividend Policy

In 2013, CCE commissioned Regional Economic Models, Inc. (REMI) to study the effect of a revenue-neutral carbon price on the American economy. Chosen for its track record of providing analysis to both governmental bodies and the fossil fuel corporations, REMI’s analysis concluded that such a system would have strong positive economic effects on the nation’s health and prosperity alike.

REMI’s analysis concluded that, during the first 20 years alone, a CF&D policy would lead to:

  • A 50% reduction of carbon emissions below 1990 levels
  • The addition of 2.8 million jobs above baseline, driven by the steady economic stimulus of the energy dividend
  • The avoidance of 230,000 premature deaths due to reduction in air pollutants that often accompany carbon emissions

These remarkably positive results were due to REMI’s detailed modeling, which included an aggressive rate of increase, a 100% dividend minus administrative costs, and consideration of the economic effects of associated health benefits. REMI’s findings at a given level of a carbon fee are consistent with other studies; for example, a May 2013 study by the Congressional Budget Office found that a $20 per ton carbon fee would result in an 8% reduction in national emissions. The results of the REMI report are thus supported by complementary studies as well as by the organization’s long track record of analysis for both governmental bodies and the fossil-fuel industry.

A common reason for opposing climate action is the belief that any reduction in carbon emissions must be accompanied by reductions in economic activity. The REMI report has proven to be one of CCE’s most powerful educational tools, allowing citizens to directly address economic concerns—and to demonstrate the substantial economic upsides to a CF&D system.