Carbon Pricing Myths: Part 5. A Carbon Fee Would Increase Prices and Thus Make U.S. Companies Less Competitive Globally

Most studies indicate that any such impact would be very small. British Columbia adopted a carbon tax in 2008, and its per capita GDP growth has outperformed Canada’s. (Meantime, the tax has reduced fossil fuel consumption by 9 percent, while use in the rest of that country has risen.) “Far from a ‘job killer,’ it is a world-leading example of how to tackle one of the greatest global challenges of our time: building an economy that will prosper in a carbon constrained world,” according to a commentary by two Canadian professors and the chairman of Pan American Silver Corporation and Alterra Power.

Carbon Pricing Myths: Part 3. A Carbon Fee Would Redistribute Income from Interior Regions to the Coasts.

Regional disparities would be small, according to most studies in recent years. “We … find that the regional variation is at best modest,” wrote economists Kevin A. Hassett, Aparna Mathur and Gilbert E. Metcalf in “The Incidence of a U.S. Carbon Tax: A Lifetime and Regional Analysis,” a January  2008 working paper by the American Enterprise Institute (AEI). They concluded that “variation across regions is sufficiently small that one could argue that a carbon tax is distributionally neutral across regions.”

Carbon Pricing Myths: Part 2. A Carbon Fee is Regressive, Hitting Lower-Income People Hardest

Putting a price on carbon would make gasoline, home heat and air conditioning, and carbon-intensive products (e.g. steel and cement) more expensive. Those at the upper end of the income ladder generally spend more on such items. For example, for every gallon of gasoline used by the poorest 20 percent of households, the richest 20 percent use three or four.