"This paper considers the question of under what circumstances a new environmental regulation should "phase in" gradually over time, rather than being immediately implemented at full force. The paper focuses particularly on climate policy, though its insights are more general. It shows that...

Economists have for decades recommended that carbon dioxide and other greenhouse gases be taxed--or otherwise priced--to provide incentives for their reduction. The United States does not have a federal carbon tax; however, many state and federal programs to reduce carbon emissions effectively...

Economists often regard broad-based carbon pricing (whether in the form of a carbon tax or cap and trade) as the most efficient policy to reduce carbon dioxide emissions. Relative to a narrower policy that exempts some emissions sources, a broader policy is often favored because it can exploit...