US

Carbon Taxes II

The Brookings Institution recently described a US carbon tax of $20 per ton, increasing at 4% per year, which would raise an estimated $150 billion per year in federal revenues over the next decade. Given the negative externalities created by carbon dioxide emissions, a federal carbon tax at this rate would involve fewer harmful net distortions to the US economy than a tax increase that generated the same revenue by raising marginal tax rates on labor income across the board.

Responses weighted by each expert's confidence

Participant University Vote Confidence Bio/Vote History
Acemoglu
Daron Acemoglu
MIT
Strongly Agree
9
Bio/Vote History
Alesina
Alberto Alesina
Harvard Did Not Answer Bio/Vote History
Altonji
Joseph Altonji
Yale
Agree
5
Bio/Vote History
Auerbach
Alan Auerbach
Berkeley
Agree
5
Bio/Vote History
Autor
David Autor
MIT
Strongly Agree
10
Bio/Vote History
Taxing negative externalities reduces economic distortions; taxing labor creates them. This is the tax equivalent of a free lunch!
Baicker
Katherine Baicker
University of Chicago
Agree
3
Bio/Vote History
Bertrand
Marianne Bertrand
Chicago
Agree
4
Bio/Vote History
Chetty
Raj Chetty
Harvard
Strongly Agree
10
Bio/Vote History
Chevalier
Judith Chevalier
Yale
Agree
10
Bio/Vote History
Since carbon is a worldwide pollutant, leakage of production to other jurisdictions remains a concern.
Currie
Janet Currie
Princeton
Agree
6
Bio/Vote History
Cutler
David Cutler
Harvard
Strongly Agree
8
Bio/Vote History
Deaton
Angus Deaton
Princeton
Strongly Agree
9
Bio/Vote History
Duffie
Darrell Duffie
Stanford
Strongly Agree
4
Bio/Vote History
Pollution is a negative externality. It is hard to argue the same for employment! If $150b per year isn't way too much tax, this is obvious.
Edlin
Aaron Edlin
Berkeley Did Not Answer Bio/Vote History
Eichengreen
Barry Eichengreen
Berkeley
Strongly Agree
7
Bio/Vote History
Fair
Ray Fair
Yale
Strongly Agree
8
Bio/Vote History
Goldberg
Pinelopi Goldberg
Yale
Agree
6
Bio/Vote History
Goldin
Claudia Goldin
Harvard
Agree
3
Bio/Vote History
Goolsbee
Austan Goolsbee
Chicago
Agree
6
Bio/Vote History
but partly b/c statement intentionally doesn't consider distributional or implementation issues with carbon taxes.
Greenstone
Michael Greenstone
University of Chicago
Strongly Agree
9
Bio/Vote History
The $20 tax is v close to U.S. government's estimate of the social cost of carbon of about $21 per ton. See links below for more details.
-see background information here
-see background information here
Hall
Robert Hall
Stanford
Uncertain
4
Bio/Vote History
There's reasonable evidence that carbon emissions raise the temp, but it is less clear that the net effects of warming are negative.
Holmström
Bengt Holmström
MIT
Strongly Agree
10
Bio/Vote History
Hoxby
Caroline Hoxby
Stanford Did Not Answer Bio/Vote History
Judd
Kenneth Judd
Stanford
Agree
7
Bio/Vote History
Kashyap
Anil Kashyap
Chicago Booth
Agree
1
Bio/Vote History
Klenow
Pete Klenow
Stanford
Strongly Agree
8
Bio/Vote History
Lazear
Edward Lazear
Stanford Did Not Answer Bio/Vote History
Levin
Jonathan Levin
Stanford
Agree
4
Bio/Vote History
Agree at a high level, but implementation of such a tax could create many new distortions and loopholes.
Maskin
Eric Maskin
Harvard
Agree
8
Bio/Vote History
Nordhaus
William Nordhaus
Yale
Strongly Agree
10
Bio/Vote History
Obstfeld
Maurice Obstfeld
Berkeley
Agree
5
Bio/Vote History
The likely outcome, though the answer depends on relevant elasticities.
Saez
Emmanuel Saez
Berkeley
Agree
7
Bio/Vote History
Scheinkman
José Scheinkman
Columbia University
Strongly Agree
8
Bio/Vote History
Schmalensee
Richard Schmalensee
MIT
Strongly Agree
9
Bio/Vote History
Shin
Hyun Song Shin
Princeton
Agree
7
Bio/Vote History
Stokey
Nancy Stokey
University of Chicago
Agree
6
Bio/Vote History
Thaler
Richard Thaler
Chicago Booth
Agree
8
Bio/Vote History
Great on effiency but not on progressivity so you have to get that right elsewhere.
Udry
Christopher Udry
Northwestern
Strongly Agree
8
Bio/Vote History
The details matter, and CO2 reduction is a global public good, so this policy is not sufficient. But it's a step forward.
Zingales
Luigi Zingales
Chicago Booth
Strongly Agree
7
Bio/Vote History