A carbon tax requires evaluating each industry’s emissions. That overstretches agency resources.
Pomerleau 21, a climate policy analyst at the Niskanen Center. Her areas of research include policy development for carbon taxes. She has previously worked in public policy at the Cato Institute and the American Council on Renewable Energy. Most recently, she has worked as a business strategy consultant. Shuting has an MPP in environmental and energy policy from Georgetown University’s McCourt School of Public Policy (Shuting, “Administrative Costs of a Carbon Tax,” https://www.niskanencenter.org/wp-content/uploads/2021/02/Jan28-Administrative-Costs-of-Carbon-Tax.pdf)//BB
A second characteristic that affects administrative costs is the “measurability” of the tax base. Intuitively, a tax base that is easier to measure for tax liability calculation would incur a lower administrative cost than a tax base that is harder to measure. For example, carbon emission levels are more difficult to measure and report than input or output levels. As a result, the more heterogeneous that production processes and technologies are across the industries, the higher the administrative costs would be, as more resources would be needed to examine, monitor, and validate each industry’s emissions.11