Could revenue recycling make effective carbon taxation politically feasible?

• DOI: 10.1126/sciadv.aax3323
• Publication Date: 2019-09-18T23:15:43Z
• Authors: Liam F. Beiser-Mc...; Thomas Bernauer
• Keywords: Carbon tax; Carbon fibers

Carbon taxes are widely regarded as a potentially effective and economically efficient policy instrument for decarbonizing the global energy supply thus limiting warming. The main obstacle is political feasibility because of opposition from citizens industry. Earmarking revenues carbon taxation spending that benefits (i.e., revenue recycling) might help makers escape this impasse. On basis choice experiments with representative samples in Germany United States, we examine whether recycling could mitigate two key obstacles to achieving sufficient public support taxes: (i) declines levels increase (ii) concerns over international economic level playing field. For both countries, find achieve majority tax up $50 $70 per metric ton carbon, but only if industrialized countries join forces adopt similar taxes.