Carbon taxes are a critical regulatory mechanism for reducing greenhouse gas emissions. A carbon tax directly sets a price on emissions, either as an output tax on producers of fossil fuels (coal, petroleum products, and natural gas) or a tax on the purchase of fossil fuels. Such a tax makes the carbon price certain, but the total emissions that ultimately result from the policy are uncertain. This trade-off between price certainty and emissions certainty has important environmental, economic, and political economy implications for the design of climate policy. The articles in this Symposium describe the uncertainty inherent to carbon taxes, and propose regulatory and legislative solutions that would help mitigate this uncertainty:
Resolving the Inherent Uncertainty of Carbon Taxes: Introduction (Aldy et al., 2017)
Increasing Emissions Certainty Under a Carbon Tax (Murray et al., 2017)
Designing and Updating a U.S. Carbon Tax in an Uncertain World (Aldy, 2017)
Adding Quantity Certainty to a Carbon Tax Through a Tax Adjustment Mechanism for Policy Pre-Commitment (Hafstead et al., 2017)
The articles are available to download on the website of the Harvard Environmental Law Review.