{
  "id": "R40242",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "R40242",
  "active": false,
  "source": "EveryCRSReport.com, University of North Texas Libraries Government Documents Department",
  "versions": [
    {
      "source": "EveryCRSReport.com",
      "id": 359560,
      "date": "2009-03-10",
      "retrieved": "2016-04-07T02:41:03.677082",
      "title": "Carbon Tax and Greenhouse Gas Control: Options and Considerations for Congress",
      "summary": "Market-based mechanisms that limit greenhouse gas (GHG) emissions can be divided into two types: quantity control (e.g., cap-and-trade) and price control (e.g., carbon tax or fee). To some extent, a carbon tax and a cap-and-trade program would produce similar effects: Both are estimated to increase the price of fossil fuels, which would ultimately be borne by consumers, particularly households. Although there are multiple tools available to policymakers that could control GHG emissions\u2014including existing statutory authorities\u2014this report focuses on a carbon tax approach and how it compares to its more frequently discussed counterpart: cap-and-trade.\nIf policymakers had perfect information regarding the market, either a price (carbon tax) or quantity control (cap-and-trade system) instrument could be designed to achieve the same outcome. Because this market ideal does not exist, preference for a carbon tax or a cap-and-trade program ultimately depends on which variable one wants to control\u2014emissions or costs. Although there are several design mechanisms that could blur the distinction, the gap between price control and quantity control can never be completely overcome.\nA carbon tax has several potential advantages. With a fixed price ceiling on emissions (or their inputs\u2014for example, fossil fuels), a tax approach would not cause additional volatility in energy prices. A set price would provide industry with better information to guide investment decisions: e.g., efficiency improvements, equipment upgrades. Economists often highlight a relative economic efficiency advantage of a carbon tax, but this potential advantage rests on assumptions\u2014about the expected costs and benefits of climate change mitigation\u2014that are uncertain and controversial. Some contend that a carbon tax may provide implementation advantages: greater transparency, reduced administrative burden, and relative ease of modification.\nThe primary disadvantage of a carbon tax is that it would yield uncertain emission control. Some argue that the potential for irreversible climate change impacts necessitates the emissions certainty that is only available with a quantity-based instrument (e.g., cap-and-trade). Although it may present implementation challenges, policymakers could devise a tax program that allows some short-term emission fluctuations, while progressing toward a long-term emission reduction objective. Proponents argue that short-term emission fluctuations would be preferable to the price volatility that might be expected with a cap-and-trade system.\nAlthough a carbon tax could possibly face more political obstacles than a cap-and-trade program, some of these obstacles may be based on misunderstandings of the differences between the two approaches or on assumptions that the tax would be set too low to be effective. Carbon tax proponents could possibly address these issues to some degree, but there remains considerable political momentum for a cap-and-trade program.",
      "type": "CRS Report",
      "typeId": "REPORTS",
      "active": false,
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          "url": "http://www.crs.gov/Reports/R40242",
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          "filename": "files/20090310_R40242_a0b23c7558745bfd371dc190a30e4e857ad327a4.html",
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          "url": "http://www.crs.gov/Reports/pdf/R40242",
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      ],
      "topics": []
    },
    {
      "source": "University of North Texas Libraries Government Documents Department",
      "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc743411/",
      "id": "R40242_2009Feb23",
      "date": "2009-02-23",
      "retrieved": "2015-10-20T21:35:54",
      "title": "Carbon Tax and Greenhouse Gas Control: Options and Considerations for Congress",
      "summary": "This report provides an overview of the fundamental choices involved between a cost (tax) and a quantity (cap) control instrument, including a discussion of policy tools that could be employed to bridge the gap between a carbon tax and a cap-and-trade program. It also analyzes the potential advantages and disadvantages of a carbon tax, discusses implementation issues for a carbon tax -- including where to apply the tax, at what level to set the tax, and options for distributing the tax revenues-- and provides conclusions.",
      "type": "CRS Report",
      "typeId": "REPORT",
      "active": false,
      "formats": [
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          "format": "PDF",
          "filename": "files/20090223_R40242_c53c729cfb2a1afeb6afb7d2af08de586632af44.pdf"
        },
        {
          "format": "HTML",
          "filename": "files/20090223_R40242_c53c729cfb2a1afeb6afb7d2af08de586632af44.html"
        }
      ],
      "topics": [
        {
          "source": "LIV",
          "id": "Air pollution",
          "name": "Air pollution"
        },
        {
          "source": "LIV",
          "id": "Carbon taxes",
          "name": "Carbon taxes"
        },
        {
          "source": "LIV",
          "id": "Pollution taxes",
          "name": "Pollution taxes"
        }
      ]
    }
  ],
  "topics": [
    "Economic Policy",
    "Energy Policy",
    "Environmental Policy",
    "Foreign Affairs"
  ]
}