Revenue Neutral Carbon Tax Gives More Money Back to families-
Yoram Bauman, 2-1-2021, "Three cheers (sort of) for carbon taxes: a review of recent books on climate change economics and policy," SpringerLink, https://link.springer.com/article/10.1057/s11369-021-00209-4 (Yoram Bauman- Author For SpringerLink Quoting Gilbert Metcalf, an economics professor and expert on carbon taxes who wrote, Paying for Pollution: Why a Carbon Tax Is Good for America)
Metcalf’s writing is clear and compelling: “Putting a price on pollution is a clean, market-based approach that incentivizes homeowners, factory owners, investors, and millions of people across the country to make informed decisions that align the benefits of our fossil fuel use with its full costs.” Like many other economists, as well as groups such as the Climate Leadership Council and Citizens’ Climate Lobby, he argues for a revenue-neutral carbon tax, and in particular for carbon tax revenues to be returned to Americans as a per-capita “dividend”. His estimates are that a U.S. carbon tax starting at $50 (roughly $0.50 per gallon of gasoline and 5 cents per kilowatt-hour of coal-fired power) would reduce emissions by perhaps 50% by 2050, and would generate about $200 billion a year, enough for a dividend of $2500 for a family of four. Relative prices of products would change based on their carbon intensity, household budgets would be cushioned from the financial impact of carbon taxes, and a border tax adjustment would maintain international competitiveness for energy-intensive trade-exposed sectors like agriculture and manufacturing.
Metcalf argues that a carbon tax is superior to cap-and-trade (the other way to put a price on carbon) and to non-price approaches like fuel economy standards. Especially thought-provoking in the context of ongoing discussions in the U.S. about race and inequality is his discussion of how SUVs and other light trucks ended up on the receiving end of a loophole in fuel-economy standards in the 1970s:
Worrying that higher costs due to stringent fuel economy regulations would cut sales, Chrysler threatened to shut down a truck assembly plant in Detroit unless less stringent fuel economy standards were enacted for light trucks. This sparked loud protests from African American leaders in the city given the number of well-paying jobs at the Chrysler plant, a major source of jobs for African Americans in the area. In response, Congress directed the Department of Transportation to set lower fuel economy standards for light trucks.