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believe that carbon capture and sequestration should be part of a U.S. energy transition and future, either in a transitional or permanent role. Because carbon capture and sequestration is still in demonstration, however, it is uncertain whether it will play a substantial role in the energy technology transition, as more mature, cleaner technologies (nuclear, wind, and solar) are already available as alternatives. Because of the promise it holds both for the United States and developing countries, however, Congress should continue to support research efforts. Impact of Hydrocarbon Transition Policies on National Objectives Energy Independence and Security Each hydrocarbon transition policy introduced will reduce the use of hydrocarbon resources, both domestic and foreign, throughout the United States. Reduced reliance on foreign fuels in the transportation sector, largely as a result of price adjustments due to the national carbon tax on retail gas, will reduce the volatility of energy prices in the United States and the susceptibility of the United States to geopolitical conflict. Economic Impact and Feasibility A carbon tax would be costly but fair, affecting both the producers and users of carbon dioxide emitting activities. Taxed entities—including electricity generators and EPA- regulated industrial sites—are expected either to shift the entire incidence of the tax on to consumers through higher prices, to reduce operations, and/or to absorb the cost of the tax, whichever is most profitable. The carbon tax will significantly affect the economy by increasing the cost of electricity from coal, natural gas, and oil; therefore, prices of all goods and services will likely increase. This short term increase in cost, however, is necessary for the prosperity of the nation in the long term. The total economic impact of these policy proposals will largely depend on how Congress intends to shape exemptions, rebates to working-class Americans; and how consumers adjust their use of energy in reaction to pricing in a carbon tax regime. Environmental Impact By increasing the cost of emitting carbon, the carbon tax will encourage the use of cleaner methods of electricity generation and transportation propulsion. Investments in technology that either reduces emissions from hydrocarbon energy generation or captures and sequesters emissions will reduce the negative impact that energy from hydrocarbons will have on the environment. By reducing their environmental impact, continued use of hydrocarbon resources will be more feasible when conversion to alternative resources is not feasible for U.S. regions. Transportation Innovation Policies The goal of the transportation policy presented in this section is to facilitate a two-step transition from the dominant use of traditional, gas-powered vehicles to pure electric or 169PDF Image | Shaping Energy Technology Transition
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