Why we need a carbon tax

William Nordhaus

introduced by Valentina Bosetti

Raising prices through a carbon tax, is a far more effective and efficient way to lower carbon emissions than direct government controls on the quantity of emissions through, say, regulatory limits on cars and power plants. Higher prices will encourage firms and consumers to find alternatives to carbon-based products as well as encourage new technologies that will make those substitutes competitive. Can the proceeds be used to compensate low income families hit particularly hard by the taxes?