On the Economics of a Carbon Tax for the United States

On the Economics of a Carbon Tax for the United States

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The Paris Agreement on climate change homes in on curbing greenhouse gases (GHGs), specifically carbon dioxide. While 27 governing districts, including nations and states, currently operate under a carbon tax architecture, the United States does not impose such a levy. Professor Gilbert E. Metcalf argues that a US carbon tax would help abate GHGs, and it would do so more effectively than a cap-and-trade scheme. Business leaders, analysts and policy experts can explore the details and effects of a US carbon tax in this informative and comprehensive report.


Most world leaders view climate change as a systemic crisis that will imperil future generations. At the root of climate change is the emission of greenhouse gases (GHGs) into the atmosphere. Of these GHGs, carbon dioxide (CO2) represents the largest component, some 75% globally and 82% in the United States. Analysts calculate that a one-degree Celsius [1.8-degree Fahrenheit] increase in global temperatures would cut US GDP by 1.2%. From a global perspective, GDP drops as much as 8% if temperatures climb by six degrees Celsius. Leaders in 27 locales have instituted...

About the Author

Gilbert E. Metcalf is an economics professor at Tufts University and a researcher at the National Bureau of Economic Research.

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