2017 Reports

To Negotiate a Carbon Tax: A Rough Map of Policy Interactions, Tradeoffs, and Risks

Gundlach, Justin M.

Sooner or later, the federal government will assign a price to carbon dioxide emissions via legislation. The contents of that legislation will reflect negotiated agreement—built on various political tradeoffs—over a host of policy issues, ranging from taxes to energy efficiency standards. These tradeoffs would implicate not only the scope and price assigned by the carbon pricing policy, but also the policies with which it would interact. This paper anticipates that price will take the form of a carbon tax and describes interactions between that tax and various existing and proposed policies relating to climate change, energy, and environmental protection. Specifically, it proposes a typology for those interactions and applies it to characterize particular policies. It also notes how trading off particular policies for a more robust carbon tax could undermine the climate change mitigation goal of such a tax.