Massachusetts Institute of Technology, Joint Program on the Science and Policy of Global Change / by Sebastian Rausch and John Reilly
http://globalchange.mit.edu/research/publications/2328
[Green Car Congress] A new report from MIT’s Joint Program on the Science and Policy of Global Change suggests that a tax on carbon emissions could help raise the money needed to reduce the US deficit, while improving the economy, lowering other taxes and reducing emissions…
[Brad Plummer in the Washington Post Wonkbook] …The authors, Sebastian Rausch and John M. Reilly, estimate that this tax would raise $1.5 trillion over the next 10 years. If that revenue were then used either to cut income taxes, reduce payroll taxes, or deflect cuts to social-spending programs, the MIT authors find, most Americans would be slightly better off than if Congress simply let the fiscal cliff hit, with the Bush tax cuts and payroll tax cuts expiring automatically. (Using the carbon tax in this way would lead to an 0.02 percent bump in consumption and leisure over time…
The MIT report argues that a carbon tax would accomplish a few other things as well. Fossil-fuel use would go down, oil imports would shrink slightly, and U.S. carbon-dioxide emissions would decline. On that last point, however, it’s worth noting that the carbon tax proposed by the MIT study only gets the United States a fraction of the way toward its long-term climate targets…
