Carbon Taxes: The Most Efficient Way to Reduce Emissions

Published: August 29, 2018

A revenue neutral carbon tax would automatically encourage consumers and producers to shift toward energy sources that emit less carbon. Carbon taxes are economically efficient because they make people pay for the costs they create. And a revenue neutral carbon tax would keep the government from using new revenue to subsidize other programs.

Discussion Questions

1. How much revenue might a carbon tax raise?
2. How could a carbon tax affect the economy, employment, other taxes, and the deficit?
3. Could a U.S. carbon tax affect global carbon emissions?

Additional Resources

• Read “Why We Support a Revenue-Neutral Carbon Tax” by George P. Shultz, Gary S. Becker, available here. 
• Read why enacting a carbon tax would free up private firms to find the most efficient ways to cut emissions in “A Conservative Answer to Climate Change” by George P. Shultz and James A. Baker III, available here.
• Read “There Is One Climate Solution That’s Best For The Environment – And For Business” by George P. Shultz and Lawrence H. Summers, available here.
• Watch as George P. Shultz, James A. Baker III, and Henry Paulson discuss “Is There Deal Space for Carbon Pricing In 2017?” Available here.
• Listen as George Shultz joins The World Today to explain why he supports a carbon tax, available here.
• John Cochrane discusses George P. Shultz and James A. Baker III oped "A Conservative Answer to Climate Change." Available here. 
• Read “Let the Carbon-Dividends Debate Begin” by George P. Shultz and Ted Halstead, available here.