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POLICY INSIGHT
BEYOND THE NUMBERS

House Resolution Against Carbon Tax Woefully Off-Base

The House is expected to vote on a resolution this week expressing that “a carbon tax would be detrimental to the United States economy.” That contrasts sharply with the findings of knowledgeable scientists and economists.

Scientists recognize that unabated greenhouse gas pollution from burning carbon-based fossil fuels risks serious and potentially catastrophic damage to the environment. Economists recognize that “putting a price on carbon” to make it more expensive to use fossil-based energy and encourage the development and use of alternative clean technologies is one of the most cost-effective ways to avoid high and potentially catastrophic economic costs arising from that environmental damage.

The resolution’s bill of particulars against a carbon tax doesn’t mention the environmental and economic benefits of reducing greenhouse gas emissions. Moreover, in claiming that a carbon tax would hurt American families, especially poor families, it focuses exclusively on the effects of higher energy prices on family budgets, while ignoring the substantial revenue a carbon tax would generate. 

Moreover, the ultimate distributional effects of a carbon tax will depend on how those revenues are used. As I explain here,

Well-designed carbon-tax legislation can generate enough revenue to fully offset the hit to the most vulnerable households’ budgets from higher energy prices, cushion the impact for many other households, and leave plenty to spare for other uses (whether deficit reduction, tax reform, or spending for other public purposes).