The economics of carbon taxes: Full Free Webcast Available - Cosponsored by the American Enterprise Institute (AEI), the Brookings Institution, International Monetary Fund (IMF), and Resources for the Future (RFF)

http://tinyurl.com/aroyjpj

Event Summary

With the growing need for reform in the US fiscal system, the idea of a tax on carbon has emerged as a possible solution. On November 13, 2012 at AEI, four panels explored the merits and challenges of implementing a tax on carbon, discussing topics ranging from its distributional effects to its potential impact on international trade.

Roberton Williams of Resources for the Future began by highlighting three advantages that a carbon tax has over outright regulation, while AEI's Aparna Mathur explained the economic reasoning behind a theoretical tax on carbon to correct for externalities of pollution. Panelists also discussed how carbon taxes would function in an international framework and their potential macroeconomic effects.

Karen Palmer of Resources for the Future emphasized the difficulties posed by the complex structure of American government for a carbon tax. Donald Marron of the Urban Institute argued that carbon tax revenues could be used to lower corporate tax rates to increase economic efficiency in the US. Panelists overwhelmingly agreed that more research on the effects of a carbon tax is needed, but that it raises important questions for academics and policymakers alike.

Event Materials

Williams panel 3 presentation
Williams panel 1 presentation
Mathur AEI Presentation
Calder Presentation
Parry Presentation
Marron Presentation
Morgenstern Presentation
Fawcett Presentation
Gale Presentation
Aldy Presentation
Dinan Presentation

Event Description
The pros and cons of introducing a carbon tax in the US are the topic of many spirited debates, yet discussion of the consequences from alternative tax designs remains largely confined to academia. In an effort to shed more light on this topic and its budgetary impact, AEI, the Climate and Energy Economics Project at the Brookings Institution, the International Monetary Fund, and Resources for the Future cohosted a conference to discuss ideas for US carbon tax design and options for the potential use of carbon tax revenues. The conference featured four panels with presentations of policy briefs by leading experts, each of which tackled a particular design or implementation issue. Speakers took audience questions following their remarks.

American Enterprise Institute (AEI) www.AEI.org

November 13, 2012