Exploring a weighted carbon tax policy for the United States
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The average American emits more carbon dioxide than a citizen from the next top three emitting countries combined. Greenhouse gas emissions are steadily increasing with our use of fossil fuels and social damages from carbon dioxide are not accurately captured in fossil fuel prices. The purpose of this thesis is to develop a carbon tax model for the United States that generates revenue equal to ten percent of government spending. This particular model introduces three unique concepts to a carbon tax design: individual weightings for fuels, a floor pricing concept for carbon that determines the tax rate, and a hybrid taxation structure wherein national production of fossil fuels will be taxed alongside regional consumption of carbon dioxide. On both . a national and regional scale, a weighted tax achieves more revenues and reduces emissions faster and more effectively than a flat tax. The weighted national tax on production is expected to raise roughly $116 billion in its first year of enactment and reduce emissions by 82% by 2030 while the weighted regional consumption tax will raise $13.63 billion its first year and reduce emissions by 15% by 2030 in the California region.