November 9, 2011

Embedding a Carbon Tax in Broader Tax Reform

Adele Morris, Brookings Institute


AP Photo
The potential role for a carbon tax in a broader tax reform package is timely and economically important.  This paper addresses two aspects of the issue: the economics and the politics. It makes good economic sense to embed a carbon tax in a broader tax reform package.  If you’re going to “go big” on deficit reduction, it makes sense to include a carbon tax, and likewise if you’re going to do serious climate policy, it makes sense to raise revenue for deficit reduction or to offset other taxes.  Despite the strong economic case, the political challenges to a carbon tax are many, and they aren’t just from anti-tax Republicans who don’t believe in the science of climate change. Some of...
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TAGGED: U.S. environmental policy, carbon emissions, economy, carbon tax, Brookings Institute

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