Effects of U.S. Tax Policy on Greenhouse Gas Emissions
National Research Council / edited by William D. Nordhaus, Stephen A. Merrill and Paul T. Beaton
According to this report, the U.S. tax code is so complex it appears to have only a miniscule effect on greenhouse gas emissions. However, the authors leave open the possibility that a pricing scheme aimed directly at greenhouse gas emissions — either a carbon tax or tradable emissions allowances — would work more efficiently at lowering carbon emissions.
[InsideEPA.com, sub. req'd] …While it calls for a carbon tax and offered an assessment of the code, the study hedges many of its conclusions on specific tax provision impacts; deems current economic models inadequate for routine “scoring”of GHG policies; and urges more research to improve economic modeling.
NRC says some of the report’s limitations include heavy reliance on modeling of U.S. rather than global impacts of tax code provisions, and economic models that could understate the innovation spurred by some tax breaks.