Five Myths About Carbon Pricing

Gilbert Metcalf

No 31104, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: While carbon pricing, in general, and carbon taxes, in particular, are popular with economists, they are subject to considerable misunderstanding among policy makers and the public. In this paper I consider and refute five myths about carbon taxes: 1) that a carbon price will hurt economic growth; 2) that carbon pricing will kill jobs; 3) that a carbon tax and cap and trade program have the same economic impacts; 4) that we can’t achieve carbon reduction targets with a carbon tax; and 5) that carbon pricing is regressive. I then discuss implications for policy making.

JEL-codes: H23 Q43 Q48 Q54 (search for similar items in EconPapers)
Date: 2023-04
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Published as Gilbert E Metcalf, 2023. "Five myths about carbon pricing," Oxford Review of Economic Policy, vol 39(4), pages 680-693.

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