Carbon taxes, deficits, and energy policy interactions

Joint Program Reprint • Journal Article
Carbon taxes, deficits, and energy policy interactions
Rausch, S. and J. Reilly (2015)
National Tax Journal, 68(1): 157–178

Reprint 2015-12 [Download]

Abstract/Summary:

The United States faces the challenge of bringing its federal budget deficit under control, while also reducing its greenhouse gas emissions. Current energy policy has not been very effective in reducing greenhouse gas emissions, although that has not necessarily been its sole purpose. And rather than raise revenue, much energy policy involves subsidies through the tax system that reduce revenue or regulatory policy that may indirectly reduce revenue through its effects on economic activity. This paper focuses on the role of a carbon tax as one option to raise revenue while also reducing greenhouse gases. We also examine the interaction with other regulatory policies, namely renewable portfolio standards, which have been implemented in many states, and the corporate average fuel economy standards.

© 2015 National Tax Association

Citation:

Rausch, S. and J. Reilly (2015): Carbon taxes, deficits, and energy policy interactions. National Tax Journal, 68(1): 157–178 (http://globalchange.mit.edu/publication/16180)
  • Joint Program Reprint
  • Journal Article
Carbon taxes, deficits, and energy policy interactions

Rausch, S. and J. Reilly

2015-12
68(1): 157–178

Abstract/Summary: 

The United States faces the challenge of bringing its federal budget deficit under control, while also reducing its greenhouse gas emissions. Current energy policy has not been very effective in reducing greenhouse gas emissions, although that has not necessarily been its sole purpose. And rather than raise revenue, much energy policy involves subsidies through the tax system that reduce revenue or regulatory policy that may indirectly reduce revenue through its effects on economic activity. This paper focuses on the role of a carbon tax as one option to raise revenue while also reducing greenhouse gases. We also examine the interaction with other regulatory policies, namely renewable portfolio standards, which have been implemented in many states, and the corporate average fuel economy standards.

© 2015 National Tax Association

Supersedes: 

Carbon Tax Revenue and the Budget Deficit: A Win-Win-Win Solution?