Approximately four years ago a group of conservatives wrote a book about carbon pricing. Edited by American Enterprise Institute (AEI) Senior Fellow Alex Brill, “Carbon Tax Policy: A Conservative Dialogue on Pro-Growth Opportunities” answered practical and theoretical questions about establishing a revenue-neutral carbon tax in the United States.
Since then, Republicans, particularly Republican policymakers, have made significant progress in our country’s fight against climate change. They no longer deny the issue and are discussing, even proposing, policies to address it.
And as Republican orthodoxy shifted, the forecasted impact of climate change became more dire, and our country’s fiscal condition deteriorated due, in part, to a pandemic. An effective, pro-growth climate policy is now more important than ever.
Yet support for carbon pricing among policymakers and voters is low. And the politics of it remain difficult, despite the possibility that a carbon tax of $15 per metric ton would replace slightly more than half of corporate income tax revenues or 11.4 percent of personal income tax revenues (pg. 57).
It is promising that the Senate Finance Committee recently included carbon pricing among the list of reconciliation bill pay-fors. Despite the current politics of reconciliation and climate policy, a carbon tax is the genuinely conservative response to climate change.
A carbon tax is thus a double win: advancing a clean-energy economy while moving forward with pro-growth tax reform that improves the economy. – Phillip Swagel, Congressional Budget Office
A price mechanism, such as a carbon tax, is more efficient than a regulatory strategy because it ensures that the least costly emission abatements are adopted. Regulators lack the information required to replicate that outcome. – Alan D. Viard, AEI
Replacing the current “seesaw” of the carbon regulatory framework with a national carbon tax is a more stable approach that would reduce the burden of regulatory uncertainty. – John D. Graham, Indiana University
One advantage of a carbon tax in comparison with the current rule-based CO2 abatement approach is that it raises revenue that can then be used for other purposes. – Robert J. Carroll, EY
A carbon tax would address the negative externality that arises from the combustion of fossil fuels, encourage firms to shift away from polluting activities, and thereby spur investments in cleaner technologies. – Aparna Mathur, Amazon