Good Ideas

03.27.138:35 AM ET

The Free-Market Merits of a Carbon Tax

On the American Enterprise Institute Ideas blog, James Pethokoukis reminds us of the free-market merits of a carbon tax:

Back in 2011, several AEI scholars illustrated one way a carbon tax might work:

Subsidies for ethanol and other alternative fuels would be abolished (basic research on renewable energy would be funded on the same stringent terms as other basic research). As discussed above, business and household energy tax credits would be abolished. Regulations designed to lower greenhouse gas emissions would be repealed. Instead, a tax on greenhouse gas emissions (“carbon tax”) would be imposed.

Such a tax would raise $150 billion per annum by year 10 - substantial dollars, even in Washington.