In a new RFF Discussion Paper Moving U.S. Climate Policy Forward: Are Carbon Taxes the Only Good Alternative? Senior Fellows Ian Parry and Roberton Williams III estimate the welfare costs of the main medium-term options for significantly reducing carbon emissions, specifically using carbon taxes and cap and trade. Reducing the federal deficit has been a hot topic in the Beltway recently, and the infographic below shows the relationship between carbon tax revenue and federal deficit reduction.
[caption id="" align="aligncenter" width="577" caption="Moving U.S. (Data Source: Moving U.S. Climate Policy Forward: Are Carbon Taxes the Only Good Alternative?)"]
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(Image by Ellen A. Walter)
