This literature review systematically evaluates potential climate policy outcomes when a carbon tax and carbon capture utilization and storage (CCUS) are jointly utilized to lower the cost of CO2 emissions reductions for the CO2 emissions-intensive industrial sector.

Relevant studies suggest that carbon tax revenues can cost-effectively subsidize CCUS research, development and implementation, and coordinate with CCUS subsidies to reduce the burden of a carbon tax on affected firms.

Near-term CCUS investment can assist firms in achieving CO2 emissions reduction goals and smooth the transition from a fossil fuel-based energy system to a reduced carbon energy system.