Carbon Tax Resource Center

Carbon Tax Research & Analysis

Greenhouse gas emissions—foremost carbon dioxide (CO2) but also methane, nitrous oxide, and F-gases—have been driving changes in global temperatures, imposing costs on economic, human, and natural systems. A carbon tax is a form of carbon pricing and, as a market-based approach, it is generally seen as a cost-effective way to reduce greenhouse gas emissions. The tax is levied on the carbon content of fossil fuels. The term can also refer to taxing other types of greenhouse gas emissions, such as methane. A carbon tax puts a price on those emissions to encourage consumers, businesses, and governments to produce less of them. 

Amidst bipartisan climate negotiations on Capitol Hill, there have been renewed calls for a carbon tax. Carbon taxes have long been magnets for political controversy. But from an economic standpoint, they deserve to be taken seriously. And as with anything in tax policy, the details and design matter greatly. Federal policy analyst Alex Muresianu recently joined Jesse Solis on The Deduction podcast to talk through the history of climate tax policy, how a pro-growth carbon tax could be designed, and what its chances in DC actually are as the climate crisis worsens.

The economic theory behind such taxes is simple, but transforming the theory into a real-world policy is more challenging. You can learn more about carbon tax basics, the distributional and economic implications of a the tax, and relevant carbon policies and proposals across the globe, including those in Finland and Sweden, which were the first carbon taxes enacted in the world.

 

Breaking Down the Inflation Reduction Act’s Green Energy Tax Credits

September 14, 2022

The Inflation Reduction Act created numerous tax subsidy programs intended to accelerate the transition to a greener economy.

Carbon Taxes in the Global Market: Changes on the Way?

June 27, 2022

As policymakers on both sides of the Atlantic debate the way forward on carbon border adjustment mechanisms, it is important to keep principles of good tax policy in mind.

Carbon Taxes and the Future of Green Tax Reform

June 21, 2022

Our new analysis reviews the basic structure of carbon taxes, how they compare to the existing set of climate policies, and how they could fit into various pro-growth tax reform packages.

Carbon Taxes in Europe

June 14, 2022

In recent years, several countries have taken measures to reduce carbon emissions, including instituting environmental regulations, emissions trading systems, and carbon taxes. In 1990, Finland was the world’s first country to introduce a carbon tax.

Russia’s Ukrainian War Could Impact EU Carbon Proposal Too

March 18, 2022

Given the uncertainty surrounding the war in Ukraine, future trade relations with Russia, and the overall CBAM revenue structure. The EU will need to adjust policy when challenges arise as it looks to increase its role in fiscal affairs through new own resources.

Options for Reforming America’s Tax Code 2.0

April 19, 2021

To assist lawmakers in navigating the current tax reform conversations, we modeled how 70 different changes to the U.S. tax code would affect the U.S. economy, federal tax revenue, and the distribution of the tax burden.

Excise Tax Application and Trends

March 16, 2021

The excise tax family is growing. Over the last decade, several products have become subject to excise taxes or are in the process of becoming so. Given this development, it is more crucial than ever that lawmakers, businesses, and consumers understand the possibilities and, more importantly, limitations of excise tax application.

Breaking Down the Inflation Reduction Act’s Green Energy Tax Credits

September 14, 2022

The Inflation Reduction Act created numerous tax subsidy programs intended to accelerate the transition to a greener economy.

Carbon Taxes in the Global Market: Changes on the Way?

June 27, 2022

As policymakers on both sides of the Atlantic debate the way forward on carbon border adjustment mechanisms, it is important to keep principles of good tax policy in mind.

Carbon Taxes and the Future of Green Tax Reform

June 21, 2022

Our new analysis reviews the basic structure of carbon taxes, how they compare to the existing set of climate policies, and how they could fit into various pro-growth tax reform packages.

Carbon Taxes in Europe

June 14, 2022

In recent years, several countries have taken measures to reduce carbon emissions, including instituting environmental regulations, emissions trading systems, and carbon taxes. In 1990, Finland was the world’s first country to introduce a carbon tax.

Russia’s Ukrainian War Could Impact EU Carbon Proposal Too

March 18, 2022

Given the uncertainty surrounding the war in Ukraine, future trade relations with Russia, and the overall CBAM revenue structure. The EU will need to adjust policy when challenges arise as it looks to increase its role in fiscal affairs through new own resources.

Options for Reforming America’s Tax Code 2.0

April 19, 2021

To assist lawmakers in navigating the current tax reform conversations, we modeled how 70 different changes to the U.S. tax code would affect the U.S. economy, federal tax revenue, and the distribution of the tax burden.

Excise Tax Application and Trends

March 16, 2021

The excise tax family is growing. Over the last decade, several products have become subject to excise taxes or are in the process of becoming so. Given this development, it is more crucial than ever that lawmakers, businesses, and consumers understand the possibilities and, more importantly, limitations of excise tax application.