- Investigates the causes of economic imbalances.
- Investigates the effect of the global financial system and/or the monetary system in fostering a sustainable economy.
- Investigates causes tending to destroy or impair the free-market system.
- Explores and develops market-based solutions.
The Brookings Carbon Tax Initiative will analyze the potential role of a carbon tax within broader tax reform in the United States, both to reduce the federal budget deficit and to finance reductions in other taxes. It will summarize evidence on how an effectively structured price on carbon can reduce greenhouse gas emissions in the United States. Additionally, it will explore important design features of a carbon tax, including its price trajectory and possible linkages to deficit reduction, changes in command-and-control regulation of greenhouse gases, and options for concomitant reforms of taxes on labor and capital income. The Initiative will involve new analysis of the likely distributional effects of a carbon tax embedded in fundamental tax reforms, including by income class, region, and industry.
Brookings Hamilton Project Meeting 2-26-13 where Adele Morris, second from left, presented a paper "The Many Benefits of a Carbon Tax". The Washington Post gave the paper a rave review in a March 2nd editorial that began: "What if there were a policy that could cut future deficits, slash taxes, eliminate wasteful government spending and reduce climate change? As sequestration kicks in, you’d think every politician in Washington would be desperate to embrace such a win-win-win-win. Last week the Brookings Institution’s Adele Morris laid out what an intelligent tax on carbon emissions could accomplish, and the results will astonish anyone — seemingly much of Congress — who hasn’t given the idea the consideration it deserves."
This project, part of the broader Brookings Carbon Tax Initiative, involved the organization of a joint Brookings-American Enterprise Institute-International Monetary Fund (IMF) conference in November 2012, held at the IMF, along with related scholarly work. Brookings and AEI scholars plan to co-author a short, non-technical paper relating to the distributional implications of carbon tax and present it at that meeting. This grant will help fund Brookings’ contributions to these joint AEI-Brookings non-partisan projects.
This grant will contribute directly to the Walker Foundation’s purposes:
• It investigates policies to address the market failure associated with climate changes.
• It investigates solutions to foster a more sustainable economy, both fiscally and environmentally.
• It explores how to incorporate the costs of environmental damage into prices and economic incentives, an inherently market-based approach, in lieu of command and control pollution regulation.
• It focuses on the communication of the results and findings to policymakers, stakeholders, and the public.
A set of reports and a related meeting will offer insights into the economic effects and environmental potential for a carbon tax in the U.S. The work will investigate how to link the introduction of a carbon tax with other tax reforms and environmental regulation reform to a way that increases the efficiency of both. In addition, the project will include new analysis of the regressivity and other distributional effects of greenhouse gas charges, including by region and income class, along with proposals to address any untoward distributional effects.
(Check sent: 7/2/2012)