How to Mitigate Climate Change (IMF’s Fiscal Monitor, 2019)

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The IMF’s Fiscal Monitor asserts that limiting the planet’s warming to 2 degrees Celsius will require raising the carbon tax to $75 (from the current average of $2) per ton by 2030. This fiscal reform would cut emissions by nearly 30 percent in developed and as much as 45 percent in developing economies; however, it would also disproportionately affect poor households by increasing electricity and gasoline costs by 53 and 20 percent respectively. The report thus proposes to distribute part of the revenue to those segments of society most hit by the tax—making the policy fiscally progressive and more politically palatable. Read more about the report on Washington Post’s website or access the executive summary of the report here.