US Carbon Tax Design: Options and Implications
How does a society pay for the environmental and social costs of industrial and commercial activity? This question is front and center as nations work to address climate change across the globe. Economists broadly agree about the cost effectiveness of a market-based approach to reducing the emissions associated with climate change, with a carbon tax being one of the most popular of systems under consideration.
In the United States, opposition to any system that would address the costs of climate change—even one based on market principles—remains significant. Yet there has been a recent uptick in interest in a carbon tax, including from prominent members of both parties. The possibility of greater future legislative interest in a carbon tax means that a number of important policy design questions may need to be considered, and there has been considerable exploration of these questions to date by various research institutes and universities.
Building on this work, the Center on Global Energy Policy at Columbia University’s School of International and Public Affairs is undertaking a research effort in collaboration with external partners to explore the range of issues that policymakers will need to understand, model the effects of different scenarios that policymakers may choose to consider, and produce insights that will inform the policymaking process. This Carbon Tax Design research initiative will serve as a resource for both stakeholders and policymakers through a series of papers, public events, workshops, and policymaker briefings about the key design choices and the implications of those choices in the implementation of a carbon tax.