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The Carbon Tax: Analysis of Six Potential Scenarios

October 31, 2018
By Capital Alpha Partners

An analysis of a range of 6 carbon tax scenarios finds every one of them would reduce economic growth, impede infrastructure development, and limit the government's ability to meet fiscal obligations and operations.

Modelling six carbon tax scenarios, this report finds:

a carbon tax is not an efficient revenue raiser…; carbon tax pushes static costs and revenue burdens on to the states and local government; no carbon tax we model is consistent with meeting long-term U.S. obligations under the Paris Agreement as a stand-alone policy; tax competition impedes infrastructure development; carbon tax-financed tax reform is unlikely to be pro-growth; and depressed GDP leads to long-term fiscal challenges.