The favored federal policy to address climate change is a domestic cap-and-trade system. However, a vocal minority of political leaders have begun arguing in favor of a carbon tax. Carbon taxes seem particularly attractive both for fiscal reasons and because they provide certainty over the price...

This paper calculates, for the top twenty emitting countries, how much pricing of carbon dioxide (CO2) emissions is in their own national interests due to domestic co-benefits (leaving aside the global climate benefits). On average, nationally efficient prices are substantial, $57.5 per ton of...

The efficiency effects of carbon pricing depend on how it impacts distortions in fossil fuel markets, most notably from local air pollution externalities. By offsetting these distortions, carbon pricing may generate significant net economic benefits, so it is in countries own interests to...