Effects of a Carbon Tax on the Economy and the Environment: “Lawmakers could increase federal revenues and encourage reductions in emissions of carbon dioxide (CO₂) by establishing a carbon tax, which would either tax those emissions directly or tax fuels that release CO₂ when they are burned (fossil fuels, such as coal, oil, and natural gas). Emissions of CO₂ and other greenhouse gases accumulate in the atmosphere and contribute to climate change—a long-term and potentially very costly global problem. The effects of a carbon tax on the U.S. economy would depend on how the revenues from the tax were used. Options include using the revenues to reduce budget deficits, to decrease existing marginal tax rates (the rates on an additional dollar of income), or to offset the costs that a carbon tax would impose on certain groups of people. This study examines how a carbon tax, combined with those alternative uses of the revenues, might affect the economy and the environment…” See also:

• May 2010 CBO Briefing Report How Policies to Reduce Greenhouse Gas Emissions Could Affect Employment
• Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis – by the U.S. Interagency Working Group on the Social Cost of Carbon Under Executive Order 12866
• U.S. Environmental Protection Agency – The Social Cost of Carbon