Policy Documents

A Carbon Tax Would Harm U.S. Competitiveness and Low-Income Americans Without Helping the Environment

Derrick Morgan –
August 21, 2012

Abstract: Supporters of a new carbon tax are using arguments aimed at conservatives (it can be revenue neutral) and liberals (it can help the environment) alike. But even if one concludes that carbon dioxide and other greenhouse gases are leading to increased temperatures—and there is robust debate and far from a public consensus on the magnitude of man-made warming, particularly among conservatives—a carbon tax would (1) do next to nothing to lower global temperature, (2) harm American manufacturing competitiveness, (3) create a new revenue stream based on behavior modification, and (4) harm low-income Americans. Energy supplies can be delivered and new supplies created through the private sector rather than through mandates, regulations, taxes, and subsidies ordered by government.