The Buckeye Institute announced on Apr. 14 that its new policy report, Damaging Consequences, uses economic modeling to examine the effects of a federal carbon tax on the U.S. economy. The analysis found that an $800 billion annual carbon tax could cost each American $2,900 per year and lead to a $1.2 trillion loss in economic output by 2034.
The findings are significant as policymakers and activists debate climate strategies and their potential impact on jobs, consumer spending, and business investment.
Rea S. Hederman Jr., executive director of the Economic Research Center and vice president of policy at The Buckeye Institute, said, “Climate activists have pursued extreme net-zero polices for decades. As The Buckeye Institute’s modeling reveals, if successful, their efforts could result in the largest one-year tax increase in U.S. history, deprive workers of more than 2.4 million jobs, and curb economic growth by a devastating 10 percent in the first year alone.”
The institute used its dynamic scoring model STELA (state tax and economic long-run analysis) to simulate an $800 billion annual carbon tax as a stand-in for net-zero policies promoted under environmental, social, and governance agendas. According to projections outlined in the report for both 2027 and 2034: total job losses would reach up to 2 million by 2027 and increase to over 2.4 million by 2034; consumer spending would fall by nearly $484 billion; business investment would decline by about $470 billion; while overall economic loss could exceed $1 trillion.
Recent attempts to achieve net-zero emissions have included public nuisance litigation such as Suncor Energy v. County Commissioners of Boulder County—pending before the U.S. Supreme Court—which plaintiffs’ legal advisors describe as aiming for “an indirect carbon tax.” Previous legislative or regulatory approaches like cap-and-trade bills or participation in international agreements such as the Paris Climate Accords have not succeeded at imposing nationwide net-zero mandates.
According to the official website, The Buckeye Institute depended on private funding from individuals, corporations, and foundations; had offices on Capitol Square in Columbus, Ohio; worked to promote free-market public policy via research and data analysis; concentrated primarily on Ohio but also advocated nationally; aided policymakers with research supporting free-market principles; and was classified as a nonprofit under section 501(c)(3) of the Internal Revenue Code.
Hederman co-authored Damaging Consequences along with Sai C. Martha and Aswin Prabhakar.
