With the growing need for reform in the US fiscal system, the idea of a tax on carbon has emerged as a possible solution. On Tuesday at AEI, four panels explored the merits and challenges of implementing a tax on carbon, discussing topics ranging from its distributional effects to its potential impact on international trade.
Roberton Williams of Resources for the Future began by highlighting three advantages that a carbon tax has over outright regulation, while AEI's Aparna Mathur explained the economic reasoning behind a theoretical tax on carbon to correct for externalities of pollution. Panelists also discussed how carbon taxes would function in an international framework and their potential macroeconomic effects.
Karen Palmer of Resources for the Future emphasized the difficulties posed by the complex structure of American government for a carbon tax. Donald Marron of the Urban Institute argued that carbon tax revenues could be used to lower corporate tax rates to increase economic efficiency in the US. Panelists overwhelmingly agreed that more research on the effects of a carbon tax is needed, but that it raises important questions for academics and policymakers alike.
-- Emma Bennett
Williams panel 3 presentation
Williams panel 1 presentation
Mathur AEI Presentation
The pros and cons of introducing a carbon tax in the US are the topic of many spirited debates, yet discussion of the consequences from alternative tax designs remains largely confined to academia.
In an effort to shed more light on this topic and its budgetary impact, AEI, the Climate and Energy Economics Project at the Brookings Institution, the International Monetary Fund, and Resources for the Future are cohosting a conference to discuss ideas for US carbon tax design and options for the potential use of carbon tax revenues. The conference will feature four panels with presentations of policy briefs by leading experts, each of which will tackle a particular design or implementation issue. Speakers will take audience questions following their remarks.
If you are unable to attend, we welcome you to watch the event live on this page. Full video will be posted within 24 hours.