Reporter David Kestenbaum neatly distilled why economists are virtually unanimous in concluding that well-designed carbon taxes offer a win-win for the climate and the economy that no other policy can beat .
This is why economists love a carbon tax: One change to the tax code and the entire economy shifts to reduce carbon emissions. No complicated regulations. No rules for what kind of gas mileage cars have to get or what specific fraction of electricity has to come from wind or solar or renewables. That’s by and large the way we do it now.
Reilly brings up what is perhaps the most surprising thing about a carbon tax: "If you do it right a carbon tax can be nearly painless for the economy as a whole"
MIT economist John Reilly says the current web of rules is a more complicated and more expensive way of getting the same outcome as a carbon tax. The current system “pretty much is one of the worst ways we could do it,” he says.
Besides reducing carbon emissions, a carbon tax brings in a bunch of money — it’s a tax after all. So, Reilly says, you can reduce, say, income tax to balance out the new taxes people are paying for carbon emissions. People pay more for gas, but they get to keep more of their income.
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