Making Buildings Part of the Climate Solution by Pricing Carbon Efficiently
Brown, Marilyn A.
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This report examines the impact of instituting an economy-wide tax on CO₂ emissions in the United States, focusing especially on the changes such a tax would have on the energy and carbon profile of the commercial buildings sector. In terms of energy intensity, a carbon tax is estimated to deliver faster and deeper reductions in the commercial sector than in the rest of the economy. Still, its 6.3% energy intensity improvement falls short of the Better Buildings goal of a 20% increase in the energy efficiency of commercial buildings by 2020. On the other hand, the carbon tax scenario nearly meets the Waxman-Markey and Copenhagen economy-wide carbon reduction goals for 2020, due partly to a more carbon-lean power sector. The effects of carbon taxes on commercial buildings would be technologically transformational and geographically widespread. While energy expenditures would rise and more capital would be required for energy-efficiency upgrades, the avoided pollution and the reduced CO₂ emissions would generate significant human health and ecosystem benefits. To be successful, a broad community of constituents would need to accept the temporal mismatch between immediate costs and long-term benefits.