Implementing a Carbon Tax
This report provides new thinking on the design and implementation of a carbon tax as well as a discussion of various options for border adjustments, regulatory reform, and federal–state program interactions.
This report updates earlier work by Metcalf and Weisbach (2009) on design considerations for a national carbon tax. It maintains that 75 to 85 percent of US greenhouse gas emissions could reasonably be covered by a carbon tax. In contrast to the earlier paper, it argues that natural gas should be taxed downstream, given the large fraction of marketed gas that does not go through processing plants. The report also describes various approaches to setting the tax rate on emissions and suggests that a Pigouvian approach where the tax rate is periodically updated to reflect new estimates of the social cost of carbon (and other greenhouse gases) reasonably approximates the optimal nonlinear carbon tax. Finally, it discusses the interplay between federal and state carbon pricing policies.
Issue Brief — May 12, 2022
Industrial Decarbonization and Competitiveness: A Domestic Benchmark Intensity Approach
This issue brief suggests an approach to decarbonizing the industrial sector that involves a performance metric, providing equal treatment for foreign and domestically produced industrial goods while addressing competitiveness concerns.
Journal Article — Jan 5, 2022
Potential Impacts and Challenges of Border Carbon Adjustments
This article for Nature Climate Change examines the potential impacts of border carbon adjustments on leakage, competitiveness, and cooperation.
Common Resources — Dec 20, 2021
RFF’s Top Stories of the Past Year
Catch up on coverage of the most important issues in economics, energy, and the environment as 2021 comes to a close. Here’s a selection of notable blog posts, magazine articles, and podcast episodes from the past year at Resources for the Future.