Adele Morris

Brookings Institution: 9 Things You Should Know About the Carbon Tax

A “carbon tax” is one way to price carbon emissions generated from the burning of fossil fuels—e.g., coal and natural gas—to generate energy.

Economist call these emissions “negative externalities” because their costs—especially in terms of environmental harm—are not borne solely by the producer, but by the community. Thus, the actual cost to society of producing energy is higher than the cost to individuals.