The E-axes Forum on Climate Change, Macroeconomics, and Finance
September 9, 2024
Catherine D. Wolfram

“Climate Policy Reform Options in 2025”

Event Description

From the Abstract: With the expiration of many tax cuts and unmet climate targets, 2025 could be a crucial year for climate policy in the United States. Using an integrated model of energy supply and demand, this paper aims to assess climate policies that the U.S. federal government may consider in 2025 and to evaluate emissions reductions, fiscal costs and revenues, and household energy expenditures across a range of policy scenarios. Model results suggest that the emissions reductions of the Inflation Reduction Act are significantly augmented under scenarios that add a modest carbon fee or, to a lesser extent, that implement a clean electricity standard in the power sector. Second, net fiscal costs can be substantially reduced in scenarios that include a carbon fee, especially if fossil fuel exports are taxed. Third, expanding the IRA tax credits yields modest additional emissions reductions with higher fiscal costs. Finally, although none of the policy combinations across these scenarios achieve the U.S. target of a 50-52% economy-wide emissions reduction by 2030 from 2005 levels, the carbon fee and clean electricity standard scenarios achieve these levels between 2030 and 2035.


Anastasia Pappas
Founder, E-Axes Forum

Catherine D. Wolfram

Catherine Wolfram is the William F. Pounds Professor of Energy Economics and a Professor of Applied Economics at the MIT Sloan School of Management.

She was previously the Cora Jane Flood Professor of Business Administration at the Haas School of Business at UC Berkeley. From March 2021 to October 2022, she served as the Deputy Assistant Secretary for Climate and Energy Economics at the U.S. Treasury.

Wolfram was the Program Director of the National Bureau of Economic Research’s Environment and Energy Economics Program and a research affiliate at the Energy Institute at Haas and prior, was an Assistant Professor of Economics at Harvard.

She is currently working on several projects at the intersection of climate, energy, and trade.
She received a PhD in Economics from MIT in 1996 and an AB from Harvard in 1989.

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