Economic Outcomes of a US Carbon Tax

Sun Feb 17 15:24:00 EST 2013
By Dr. Anne E. Smith, Dr. David Harrison, Dr. W. David Montgomery, Dr. Paul Bernstein, Scott Bloomberg, Dr. Sugandha Tuladhar, et al.

In this report, prepared for the National Association of Manufacturers, a NERA team led by Senior Vice Presidents Dr. Anne E. Smith and Dr. David Harrison evaluates the potential impacts on the US economy from possible future carbon taxes whose revenues would be devoted to a combination of debt and tax rate reduction. NERA's project team -- which also included Senior Vice President Dr. W. David Montgomery, Vice Presidents Dr. Paul Bernstein, Scott Bloomberg, and Dr. Sugandha Tuladhar, Senior Consultant Dr. Mei Yuan, and Consultant Sebastian Mankowski -- used NERA's NewERA model to develop estimates of the effects of a carbon tax on the US economy as well as on emissions and energy markets. Such economic consequences are important so that the economic effects of a specific carbon tax policy can be compared to estimates of the environmental effects of the policy. The results take into account the varied economic effects of fossil fuel cost increases due to a carbon tax as well as the positive economic effects of the assumption that carbon tax revenues would be used to reduce Federal government debt and Federal taxes.