« ECON 255 readings for next week | Main | ECON 255 for Thursday »



Chris Shelby

Murray and Rivers provide a solid case study of a location where a carbon tax succeeded in lowering emissions and gaining more than half of the population's support. The social and economic aspects of the tax are still unclear, though. Poor people will be negatively impacted more by this tax, but findings in this study showed that this decrease in disposable income is insignificant. Maybe showing lower-income individuals this information about income tax cuts due to the carbon tax will help garner more support for it. This could be crucial in the United States, where some people might see a tax like this as unnecessary or too costly. However, this doesn't matter as long as political actors continue their passive approach to policy intervention on carbon consumption. Carbon taxes are superior to cap and trade because less energy is consumed as a result and these taxes are easier to implement. What will it take for implementation of carbon taxes in the United States?

AJ Witherell

When beginning this reading, I had minimal knowledge of the implementation and effects of carbon taxes and cap-and-trade programs. I knew nothing about the magnitudes of revenue or costs that were incurred, rather I just knew they existed. I think these articles did a good job presenting relevant information surrounding each initiative. One thing that stuck out to me was the policy establishment in the reading involving the case study in British Columbia, which I think a few have mentioned in this blog. It kind of surprised me that the carbon tax was passed successfully, despite its wide lack of support. Obviously most will be opposed to any new tax, but particularly one like a carbon tax that has very minimal noticeable costs on individuals, kind of seemed like it would be difficult to pass. Furthermore, how exactly did people begin to grow fond of it? Was it because of public dissemination of information and proof of its benefits? Very rarely have I seen articles publicized about the recent effects of taxes and its costs/benefits outlined, unless I specifically am searching for them.

In addition, just based on these articles and Tuesday’s reading, I feel as though I am more a supporter of a cap-and-trade policy than a carbon tax. I feel as though setting a “cap” allows the government and organizations to more accurately limit the amount of emissions. Rather than just allowing companies/firms to emit as much as they want, and pay costs along with it. I obviously would need to do a little more research and discuss with others to further understand the costs/benefits of each side to make a full decision on which policy to favor.

ailyn kelly

I found both of these articles to be extremely engaging, especially the paper by Maury and Rivers. Before reading these articles I didn't quite understand the full extent or structure of the British Columbia Carbon tax. Maury and Rivers make a strong case for the benefits of carbon tax, but what interested me the most about their article was the "revenue-neutrality" component of the BC Carbon tax. I had never really contemplated or concerned myself with where and to what the revenue of the carbon tax would be allocated to, nor the effects of these allocations. The "Tracking Global Carbon Revenues" article helped give a perspective on how these revenues could potentially be distributed. After reading both of these articles I found that the answer of redistribution is not as clear-cut as one may think, but is probably the most important part of the carbon tax itself. How a government allocates revenue from either cap and trade or carbon tax has political and economical effects. My main concern or only hesitation to the carbon tax, is that I'm still not completely convinced that the implementation of the tax would add little burden to low-income citizens. I think this is still a major concern to most citizens, causing the implementation of the tax to be difficult.

Jalen Twine

After reading the articles it is easy to say that the US should implement a carbon tax but that is because the articles only really were concerned with the benefits of such a tax. In this class we have been taught to ask what the costs are when faced with an argument full of benefits so I would've liked to see more about the costs. The British Columbia article is an interesting "case study" for the U.S. to maybe look into because it shows the benefits and questions the cost-effectiveness of a carbon tax. While I agree that something needs to be done, I think it's hard to just implement a tax and hope that the problems are fixed without a thorough understanding of both sides. While other problems might arise, the question that the government needs to ask itself is whether or not the carbon tax, something that we might see the effects of for awhile, is important enough for them to pursue.


In my intro to environmental studies class we had the debate on whether or not a carbon tax or a cap and trade system is better. It was definitely a difficult debate and there really was no clear answer. But for me, I felt that a carbon tax was better based off of simplicity. I have done some research and one paper I found cited the cap-and-trade proposal for the United States and it was well over 30 pages long. The leading carbon tax proposal in the United States doesn't exceed 3 pages. Not only is a carbon tax more simple in theory, but it sends a clear message that carbon emissions are bad. The cap-and-trade system sends the message that you can emit all you want, so long as you are willing to pay. In our current environmental state, this is not a good ideology to have, as time is of the essence. Lastly, I find it intriguing how the word "tax" has such a social stigma. The findings in the papers show that a carbon tax works and it works well. Maybe if more countries introduced an efficient carbon tax, public opinion would eventually begin to sway. In British Columbia, most people were generally against the tax but after some time that perception changed to one that is more positive.


Jack Miller^^^

Brianna Rakouska

It is frustrating to read how policymakers can not/will not implement carbon taxes. The Murray and Rivers paper mentions how economists often prescribe carbon taxes, but that one of the barriers to entry is the lack of public support, disincentivizing politicians to enact these types of taxes, despite the potential short and long-term benefits. While cap-and-trade programs generally use the majority of their revenue for green projects, carbon tax revenues are more commonly used for general funds or returned to taxpayers. This benefits the environment and individuals, so theoretically there should be more support than there is for these types of taxes, especially if it could be implemented without heavily burdening the poor. It is clear that cap-and-trade and carbon taxes both have shortcomings but an even bigger loss would be the damage caused to the environment should we do nothing.

Jones Veith

As I think about carbon taxes and cap and trade policies in light of the Trump administration, a few points raised in the Duke article come to mind. First, as Donald Trump works to simplify the tax code, will a carbon tax, partisanship aside, fit the mold for the new code. A key characteristic of BC's tax is its revenue neutrality. As the Duke article explains, the tax acts more like a shift, which will enable other taxes to be cut or for revenues to be transferred away from government expenditure. In this sense, a carbon tax may have some wiggle room in a Trump tax plan -- especially if other business taxes are cut. Figure 1 in the Duke article shows that most of the revenues from the BC tax tended to be distributed to corporate income tax cuts. Corporate income tax cuts? I'm sure the Trump camp could get excited about knocking off a few more points from its' 15% corporate tax rate. My next point will rest on an assumption about the Trump Administration -- it cares more about business than it does about low income households. I think this assumption is very fair. Further, even the Canadian government distributed the tax revenues more toward business than low-income. That being said, one of the largest concerns with the BC tax was that it would unfairly burden rural and low-income households. The Duke article referenced multiple studies. One study suggested that disposable income for low-income households would increase under the tax. Another suggested the tax would result in a reduction in income. Despite these facts, I think the question becomes: what is more important to the Trump Administration? The climate or the poor? Trump's new tax plan is arguably proof that he would side with businesses over those in low income households. So, could a tax that would generate cuts for business, but could potentially burden (or maybe even aid) low-income households have a place in the Trump Administration? Frankly, I doubt it.

The comments to this entry are closed.