Full Title: The Case for a US Carbon Tax
Author(s): Joseph E. Aldy
Publisher(s): Oxford Energy Forum
Publication Date: February 1, 2013
Full Text: Download Resource
Description (excerpt):
Every aspect of economic activity affects greenhouse gas emissions and, hence, the global climate. Since individuals and businesses bear virtually no cost for emitting greenhouse gases in the absence of public policy, and thus have no incentive to reduce these emissions, the government has a strong case for climate change policy. US policymakers may choose among three general approaches to drive more climate-friendly economic activity: (1) subsidise businesses and individuals to invest in and use lower-emitting goods and services; (2) mandate businesses and individuals to change their behaviour regarding technology choice and emissions; or (3) price the greenhouse gas externality, so that decisions take account of this external cost. Let’s consider these options in turn.