By Shreyansh Budhia, The George Washington University
Carbon taxes, or the taxation of greenhouse gas emissions, have been touted as a solution to rein in both climate change and the ballooning U.S. national debt. Carbon tax proposals also maintain many free market principles and have found support even among some fiscal conservatives. This paper examines the impact a carbon tax could have on climate change and the U.S. debt. It investigates the implementation details of a carbon tax and argues that such a tax should be levied upon a broad tax base. It investigates several criticisms of carbon taxes, such as tax interaction effects and tax leakage, as well as potential solutions. Finally, the paper analyzes one climate model’s failure to fully value human lives, arguing for a human-life-oriented analysis of climate policies.
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