From RePEc's NEP: Environmental Economics (NBER Working Paper No. 14375):
Designing A Carbon Tax to Reduce U.S. Greenhouse Gas Emissions
Date: 2008-10
By: Gilbert E. Metcalf
This article describes a revenue and distributionally neutral approach to reducing U.S. greenhouse gas emissions that uses a carbon tax. The revenue from the carbon tax is used to finance an environmental earned income tax credit designed to be distributionally neutral. The credit is linked to earned income and helps offset the regressivity of the carbon tax. The carbon tax reform proposal is also revenue neutral and avoids conflating carbon policy with debates over the appropriate size of the federal budget. The article provides a distributional analysis of the proposal and also makes a number of political,economic and administrative arguments in favor of a carbon tax and responds to the arguments that have commonly been made against using a tax-based approach to reducing U.S. emissions.
Personally, I would prefer a carbon tax that generates some government revenue but I'm weird in the sense that I don't want my great grand-kids to be the Ricardian equivalence guinea pigs. (i.e., I don't think I'll bequest enough to cover the tax increase in 50 years).
I might be weird in other senses too.
