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Carbon Taxes in Theory and Practice

Author

Listed:
  • Gilbert E. Metcalf

    (Department of Economics, Tufts University, Medford, Massachusetts 02155, USA)

Abstract

As of 2020, carbon taxes were in effect in 30 jurisdictions around the world. This article provides a theoretical overview of carbon taxes along with some empirical evidence on the macroeconomic impacts of existing taxes, including emission reductions. It compares and contrasts carbon taxes with other policy instruments to reduce emissions. It also highlights issues that have recently attracted the attention of researchers on which additional research would be beneficial. Those include (a) the role of border adjustments in a unilaterally imposed carbon tax, (b) hybrid carbon tax systems that increase the likelihood of hitting desired emission reduction targets, (c) the optimal price path for a carbon tax, and (d) the growing empirical literature on the economic impact of carbon taxes.

Suggested Citation

  • Gilbert E. Metcalf, 2021. "Carbon Taxes in Theory and Practice," Annual Review of Resource Economics, Annual Reviews, vol. 13(1), pages 245-265, October.
    • Handle: RePEc:anr:reseco:v:13:y:2021:p:245-265
    DOI: 10.1146/annurev-resource-102519-113630
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    Citations

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    Cited by:

    1. Ott, Laurent & Weber, Sylvain, 2022. "How effective is carbon taxation on residential heating demand? A household-level analysis," Energy Policy, Elsevier, vol. 160(C).
    2. Mireille Chiroleu-Assouline, 2022. "Rendre acceptable la nécessaire taxation du carbone. Quelles pistes pour la France ?," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(1), pages 15-53.
    3. Fuan Zhang & Na Li, 2022. "The Impact of CSR on the Performance of a Dual-Channel Closed-Loop Supply Chain under Two Carbon Regulatory Policies," Sustainability, MDPI, vol. 14(5), pages 1-22, March.
    4. You-Yi Guo & Jin-Xu Lin & Shih-Mo Lin, 2022. "The Distribution Effects of a Carbon Tax on Urban and Rural Households in China," Sustainability, MDPI, vol. 14(13), pages 1-15, June.
    5. Weijiang Liu & Min Liu & Tingting Liu & Yangyang Li & Yizhe Hao, 2022. "Does a Recycling Carbon Tax with Technological Progress in Clean Electricity Drive the Green Economy?," IJERPH, MDPI, vol. 19(3), pages 1-18, February.
    6. Li, Shoude & Zhang, Yingxuan, 2023. "Abatement technology innovation and pollution tax design: A dynamic analysis in monopoly," Energy Economics, Elsevier, vol. 119(C).
    7. Daniel Santabárbara & Marta Suárez-Varela, 2022. "Carbon pricing and inflation volatility," Working Papers 2231, Banco de España.
    8. Malerba, Daniele, 2023. "The role of social protection in environmental fiscal reforms," IDOS Discussion Papers 10/2023, German Institute of Development and Sustainability (IDOS).
    9. Martin Rabbia, 2023. "Why did Argentina and Uruguay decide to pursue a carbon tax? Fiscal reforms and explicit carbon prices," Review of Policy Research, Policy Studies Organization, vol. 40(2), pages 230-259, March.

    More about this item

    Keywords

    climate change; greenhouse gas emissions; carbon tax; climate policy;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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