Working Paper: NBER ID: w31104
Authors: Gilbert E. Metcalf
Abstract: While carbon pricing, in general, and carbon taxes, in particular, are popular with economists, they are subject to considerable misunderstanding among policy makers and the public. In this paper I consider and refute five myths about carbon taxes: 1) that a carbon price will hurt economic growth; 2) that carbon pricing will kill jobs; 3) that a carbon tax and cap and trade program have the same economic impacts; 4) that we can’t achieve carbon reduction targets with a carbon tax; and 5) that carbon pricing is regressive. I then discuss implications for policy making.
Keywords: No keywords provided
JEL Codes: H23; Q43; Q48; Q54
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| carbon pricing (Q58) | economic growth (O49) |
| carbon pricing (Q58) | employment (J68) |
| carbon pricing (Q58) | shift in employment from carbon-intensive to non-carbon-intensive sectors (O14) |
| carbon tax (H23) | carbon reduction targets (Q54) |
| carbon pricing (Q58) | regressive effects (H23) |