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State and local governments in the United States are evaluating a wide range of policies to reduce carbon emissions, including, in some instances, carbon taxes, which have existed internationally for nearly 20 years. This report reviews existing carbon tax policies both internationally and in the United States. It also analyzes carbon policy design and effectiveness. Design considerations include which sectors to tax, where to set the tax rate, how to use tax revenues, what the impact will be on consumers, and how to ensure emissions reduction goals are achieved. Emission reductions that are due to carbon taxes can be difficult to measure, though some jurisdictions have quantified reductions in overall emissions and other jurisdictions have examined impacts that are due to programs funded by carbon tax revenues.

RésuméNous introduisons le concept d'empreinte carbone dans un modèle d'offre globale et demande globale avec formation imparfaitement concurrentielle des prix et salaires et en examinons les propriétés de l'équilibre en présence d'une politique climatique. Nous étudions deux instruments possibles de cette politique, une taxe carbone ou un quota de permis de pollution. Nous montrons qu'à court terme, la politique climatique (ou son durcissement) constitue à la fois un choc d'offre globale négatif et, ceteris paribus, un choc de demande globale positif. Elle provoque donc des effets inflationnistes mais a un impact ambigu sur l'activité économique, l'emploi et le chômage. Ce n'est que dans une économie avec des ridigités nominales suffisantes que la politique climatique stimulera -sous certaines conditions- l'activité à court terme. Dans tous les cas de figure, elle pèsera négativement sur les salaires réels.Nous étudions encore les interactions entre la politique climatique et les politiques macroéconomiques traditionnelles de demande (stimulus budgétaire ou monétaire) et d'offre (baisse des cotisations sociales). Les effets multiplicateurs de ces politiques sont influencés par l'existence d'une politique climatique et diffèrent selon l'intrument choisi (taxe ou permis).Nous montrons les conditions sous lesquelles une réforme combinant durcissement de la politique climatique et baisse des cotisations sociales sur le travail peut atteindre le double objectif de réduire l'empreinte carbone de l'économie et le chômage, sans pénaliser les salaires réels des travailleurs. Une telle politique a toutefois des effets incertains sur le solde des finances publiques.

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This article explores the links between energy policy, tax policy and global warming. This article focuses on tax policy, because the emerging consensus among legal scholars favors economic incentives rather than command-and-control regulations for reaching environmental goals, and the Federal income tax has proved an effective delivery system for economic incentives. After briefly discussing of the science of global warming and the provisions of the Kyoto Protocol on Climate Change, the article reviews the impact of both existing tax law and current proposals for energy legislation on global warming, as well as potential international law consequences of failure to act to curtail global warming. This analysis also includes a discussion of global warming as "tragedy of the commons" issue and reflects on how psychological factors and economic beliefs may affect the public's level of concern about global warming. Concluding that both present law and current proposals create incentives for continued and increasing use of greenhouse gas emitting fossil fuels, the article outlines a three part strategy for curtailing global warming through tax policy: (1) reducing or eliminating the present law subsidies for fossil fuel use while creating and strengthening incentives for alternative energy generation; (2) imposing a carbon tax; and (3) creating incentives for development of carbon sequestration projects in privately held forests in the United States. The article studies the effectiveness of these proposals by comparing similar proposals in effect in other countries and by considering the classic tax policy goals of equity and efficiency. The tax system is an appropriate and effective way to encourage businesses to adopt an environmental ethic and take action to reverse global warming. Strong economic, esthetic, and moral arguments support changing our tax system to protect the environment from global warming.

One of the proposed alternatives to Kyoto’s cap-and-trade approach is a regime based on an internationally harmonized carbon tax. In this paper, we consider and compare the enforcement problems associated with a tax regime and a cap-and-trade regime, respectively. The paper tries to convey two main points. First, both types of regime require an. effective enforcement mechanism. However, such a mechanism is unlikely to be adopted as part of a regime with full participation, because the political process leading up to its adoption tends to water down the enforcement mechanism to a point where it no longer has much bite. And even if this is somehow avoided, countries expecting compliance to be difficult or costly will almost certainly decline to sign—not to mention ratify—the resulting agreement. Second, the implications of non-compliance in a tax regime differ in important ways from the corresponding implications in a cap-and-trade regime. In a cap-and-trade regime emissions trading can make inaction legitimate for buyers of emission permits. In particular, overselling of permits by one (or a few) permit exporting countries might completely undermine the regime’s environmental effect. In a tax regime, by contrast, one country’s non-compliance can not make inaction by other countries legitimate. It follows that an agreement based on a harmonized carbon tax will always have some effect, provided that at least one country complies.

The proposed South African carbon tax system forms part of an extensive structure of strategies aimed at addressing the main challenges of climate change. The system is, however, complex, with various concerns and uncertainties. Industries therefore need to adapt positively in order to ensure their sustainability and competitiveness. This paper presents a risk management strategy for industries to identify and prioritise potential factors affecting the cost of carbon tax. The risk management strategy consists of five phases: 1) establishing the concept, 2) identifying the associated risks, 3) analysing the risks, 4) evaluating the risks, and 5) managing the risks according to relevant international or national standards. The risks are effectively prioritised by evaluating the individual severity, likelihood, and correctability of each risk. The strategy is applied to case studies in the iron and steel, ferrochrome, and cement industries. The combined carbon tax exposure for these case studies is about R453 million. A discussion of the results reveals that the risk management strategy can be used effectively to identify and prioritise carbon tax-associated risks, and further mitigate the potential tax liabilities.

AbstractThis contribution introduces a novel carbon pricing system and illustrates its benefits. The system is based on two related but distinct ideas. First, we group the global pools of carbon into three aggregate pools, and we tax or credit human-caused carbon fluxes across the boundaries of the pools. Second, we base the tax or credit solely on physical movements of carbon between pools; hence, the system uses a physical baseline instead of a behavioral baseline based on the hypothetical emissions levels that would have arisen absent the carbon price. The proposed system goes beyond the limitations of current carbon pricing schemes for a number of reasons: it is designed to capture all positive and negative emissions based purely on their climate impact, allowing a broader scope and more appropriate incentives than current systems; it avoids creating bad incentives, particularly those caused by additionality requirements found in carbon offset systems; it captures the complexity of carbon movements through human and natural systems; it reduces measurement errors; and it provides transparent and easily observed price signals. Though this manuscript is conceptual in nature and refrains from discussing the technicalities related to the implementation of the proposed carbon pricing system, we trust that it may contribute to the development of policies enabling a net-zero and net-negative CO$$_{2}$$ 2 -emissions world.

Abstract Climate policy has mostly focused on regulating power suppliers. There is a growing interest in exploring regulating emissions from the demand side by incentivizing consumers to reduce their energy consumptions, or to purchase power from cleaner sources through tracking carbon content of power flow in the transmission network. This paper analyzes market outcomes under two approaches: producer-based and demand-based carbon taxes. We formulate each approach as a market equilibrium model. For the consumer-based approach, the analysis assumes that a utility, procuring electricity on behalf of consumers, is subject to the carbon tax. For the producer-based approach, the producers are subject to the carbon tax, and therefore, pay for their emissions. We show that the two approaches are equivalent when the program's coverage is complete. However, when the coverage is incomplete, the consumer-based carbon tax is less effective in pricing carbon emissions owing to the fact that sales to unregulated regions are not subject to the carbon tax. Given that the transaction cost of implementing consumer-based tax is likely to be high, benefit of tracking power flows in order to estimate carbon content or footprint might not be justified even with a full coverage program.