Project Report:
Carbon Pricing and Environmental Justice
- Explores and develops market-based solutions.


A carbon price, or tax, is an essential part of a market-based approach to reducing greenhouse gas emissions. By pursuing original research on novel implementations of carbon pricing revenue swaps and reporting the results, our work will address the following goals of the Walker Foundation: "explore and develop market-based solutions" and "disseminate information on the results and findings."


With support of the Walker Foundation, the Niskanen Center will commission a new study, to be done with external collaborators, to study how tax reform coinciding with the levying of a carbon tax price can meet new fiscal policy objectives that have trans-partisan support. Examples include expansion of the child tax credit and the earned income tax credit. Similar tax reforms have successfully been used to compensate for the regressivity of motor fuel excise taxes and could be implemented again in the coming years alongside a carbon tax. The study will assess both how carbon tax revenue could be used to expand these targeted benefits and how those targeted benefits would modify the distributional and economic impact of the carbon tax, in a way that previous studies have assessed the impacts of policies like carbon dividends or reductions in payroll tax rates.


The findings of this study will be useful by allowing policymakers to understand the connections between recent tax policy priorities and carbon taxation. We have identified a research partner who could help us develop a rigorous study of these questions with best-in-class tax and fiscal policy models. The Niskanen Center will publish, along with an external co-author, a report on the results of this study. In addition to publishing results, the Niskanen Center will communicate these results to allied organizations, climate advocates, anti-poverty advocates, tax and fiscal policy experts, policymakers, and the public. The goal of this work is to publish results before fall 2020.

Amount Approved
$50,000.00 on 6/8/2021 (Check sent: 6/11/2021)

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Posted 3/22/2021 12:26 PM
Updated   7/13/2021 2:54 PM

  • Nonprofit

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