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Would a carbon tax cut emissions drastically? Not on its own

Source:  Copyright 2012, Washington Post
Date:  November 21, 2012
Byline:  Brad Plumer
Original URL: Status ONLINE
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Lately, the White House and Congress have been talking up tax reform. And that`s given policy wonks an excuse to revisit one of their favorite environmental proposals -- the carbon tax. The government would slap a fee on greenhouse-gas emissions to offset tax cuts elsewhere. It would boost the economy and address global warming. What`s not to love?

Well, let`s set aside the fact that there aren`t yet any prominent politicians touting the idea. It`s still worth discussing on its merits. And one of the biggest questions here is whether a carbon tax would actually reduce U.S. greenhouse-gas emissions significantly. Is it a comprehensive solution to climate change? Or just a small first step?

Many economists would argue that it could indeed be a comprehensive solution. If you tax oil, coal, and natural gas and make them all more expensive, then people and companies will either use fewer fossil fuels or they`ll seek out alternatives. Markets will adjust to the ...

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