The Congressional Budget Office found that the U.S. budgetary deficit will be reduced by up to $865.4 billion by 2032 if the government imposes taxes on greenhouse gas emissions starting this year.
The agency on Monday released figures on the budgetary effects of climate change and how different options to tax carbon emissions would decrease federal deficit in the long term.
Joseph Kile, CBO assistant director for microeconomic studies, presented the findings on Monday to the National Academies of Sciences, Engineering, and Medicine.
According to the report, federal spending on hurricane damage is projected to surpass economic growth rate by the year 2075. The percentage of U.S. population that will be affected by substantial hurricanes is slated to increase from 1.2 million this year to 10 million by 2075.
Climate change has been hampering gross domestic product since 2020, and is expected to continue reducing GDP by 0.03 percentage points until 2050, CBO stated.
To progressively lower federal deficit from 2023 to 2032, CBO presented taxation options such as a $25 tariff per metric ton of GHG footprint, combined with either a 5 percent or 2 percent annual tax increase, or the same per-metric ton tax — but excluding gasoline — combined with a 2 percent annual tax hike.
