Carbon Tax Revenues can be used to help those who lose

This Policy Spotlight discusses the need for carbon taxes, also known as carbon pricing. Climate change has increased the frequency of devastating floods, droughts and wildfires. Policymakers have proposed energy efficiency standards, subsidies for electric vehicles, renewable electricity-generation requirements, a tax on carbon dioxide emissions or a cap-and-trade permit system. Some of these proposed policies could raise state revenue, but all of them would impose additional costs on those who need to use fossil fuels and on those who might lose their jobs in coal mines or fossil fuel-fired electric power plants. Many factors determine which families bear the highest costs of these climate policy initiatives.