IDEAS home Printed from https://ideas.repec.org/p/rff/dpaper/dp-16-43.html
   My bibliography  Save this paper

Adding Quantity Certainty to a Carbon Tax: The Role of a Tax Adjustment Mechanism for Policy Pre-Commitment

Author

Listed:
  • Hafstead, Marc

    (Resources for the Future)

  • Metcalf, Gilbert E.

    (Tufts University)

  • Williams III, Roberton C.

    (Resources for the Future)

Abstract

A concern often raised about a carbon tax is that it does not provide any certainty as to the quantity of emission reductions achieved under the policy. We explore in this Issue Brief how greater emission reduction certainty can be built into a carbon tax. We first define a Tax Adjustment Mechanism for Policy Pre-Commitment (TAMPP). A TAMPP is an adjustment mechanism for the tax rate of a carbon tax to ensure that targeted emission reduction milestones are met over the next few decades. We then provide some guidance based on economic principles related to various design considerations that should be incorporated in a cost-effective and politically realistic TAMPP.

Suggested Citation

  • Hafstead, Marc & Metcalf, Gilbert E. & Williams III, Roberton C., 2016. "Adding Quantity Certainty to a Carbon Tax: The Role of a Tax Adjustment Mechanism for Policy Pre-Commitment," RFF Working Paper Series dp-16-43, Resources for the Future.
    • Handle: RePEc:rff:dpaper:dp-16-43
    as

    Download full text from publisher

    File URL: http://www.rff.org/RFF/documents/RFF-DP-16-43.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ryan Rafaty & Geoffroy Dolphin & Felix Pretis, 2020. "Carbon pricing and the elasticity of CO2 emissions," Working Papers EPRG2035, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    2. Stavins, Robert N., 2019. "The Future of U.S. Carbon-Pricing Policy: Normative Assessment and Positive Prognosis," Working Paper Series rwp19-017, Harvard University, John F. Kennedy School of Government.
    3. Aldy, Joseph, 2017. "Designing and Updating a US Carbon Tax in an Uncertain World," Working Paper Series rwp17-001, Harvard University, John F. Kennedy School of Government.
    4. Alexander R. Barron & Allen A. Fawcett & Marc A. C. Hafstead & James R. Mcfarland & Adele C. Morris, 2018. "Policy Insights From The Emf 32 Study On U.S. Carbon Tax Scenarios," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 9(01), pages 1-47, February.
    5. Gorbach, O.G. & Kost, C. & Pickett, C., 2022. "Review of internal carbon pricing and the development of a decision process for the identification of promising Internal Pricing Methods for an Organisation," Renewable and Sustainable Energy Reviews, Elsevier, vol. 154(C).
    6. Boyce, James K., 2018. "Carbon Pricing: Effectiveness and Equity," Ecological Economics, Elsevier, vol. 150(C), pages 52-61.
    7. Robert N. Stavins, 2020. "The Future of US Carbon-Pricing Policy," Environmental and Energy Policy and the Economy, University of Chicago Press, vol. 1(1), pages 8-64.

    More about this item

    Keywords

    carbon tax; emissions uncertainty; climate;
    All these keywords.

    JEL classification:

    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rff:dpaper:dp-16-43. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Resources for the Future (email available below). General contact details of provider: https://edirc.repec.org/data/rffffus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.