Carbon tax ‘risk’ already driving down emissions, San Francisco Fed says

The prospect of a carbon tax being enacted in the next year is already driving companies to make decisions that reduce overall capital and emissions, even before the fee is in place.

“Our findings suggest that the risk of the United States adopting a climate policy in the future causes businesses to shift current investment to less carbon-intensive capital and reduce overall investment,” wrote a group of researchers in a report released Monday by the Federal Reserve Bank of San Francisco.

“This response leads to lower emissions, even though no actual climate...