The Paris Agreement has achieved one of two key necessary conditions for ultimate success - a broad base of participation among the countries of the world. But another key necessary condition has yet to be achieved - adequate collective ambition of the individual nationally determined...

We analyze the distributional and efficiency impacts of different allowance allocation schemes for a national cap and trade system using the USREP model, a new recursive dynamic computable general equilibrium model of the U.S. economy. We consider allocation schemes applied to a comprehensive...

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...

We analyze the quantitative labor market and aggregate effects of a carbon tax in a framework with pollution externalities and equilibrium unemployment. Our model incorporates endogenous labor force participation and two margins of adjustment influenced by carbon taxes: firm creation and green...

This article describes a revenue and distributionally neutral approach to reducing U.S. greenhouse gas emissions that uses a carbon tax. The revenue from the carbon tax is used to finance an environmental earned income tax credit designed to be distributionally neutral. The credit is linked to...