We study the connection between corporate taxation and carbon emissions in the US. Counter to optimal taxation of negative externalities, we find that dirty firms pay lower profit taxes. This relationship is driven by dirty firms benefiting disproportionately more from the tax shield of debt,...

The paper provides for a template for the negotiation of a Multilateral Carbon Tax Treaty, and is extracted from the final chapter of the book 'A Proposition for a Multilateral Carbon Tax Treaty', published by IBFD in 2018, available at:...