2025/05/21 by Margit Schratzenstaller · 1 voice
Decision Sciences · #demographic modeling and climate adaptation
paper · doi:10.4337/9781035310371.00016
openalex publication_date 2025/05/21 · openalex created_date 2025/05/22 · openalex updated_date 2026/07/14
Carbon taxes are a form of environmental taxation aimed at internalizing the negative impacts of carbon dioxide emissions by assigning a price per ton of CO2 equivalent. Despite theoretical challenges in determining the optimal carbon price due to uncertainties in climate damage and abatement costs, carbon taxes are implemented globally, with 73 jurisdictions covering 23 per cent of worldwide greenhouse gas emissions as of April 2023. Empirical studies indicate that while carbon taxes can reduce emissions, the effects are often modest and influenced by the tax rate, design, and economic context. The macroeconomic impact of carbon taxes is generally neutral or positive, with effective revenue recycling, such as reducing social security contributions, enhancing economic benefits. Although carbon taxes may have regressive effects, appropriate compensation mechanisms can mitigate these impacts. Public acceptance of carbon taxes hinges on perceptions of fairness and effective communication strategies. Overall, carbon taxes are a critical tool for achieving emission reduction targets and fostering environmental and economic sustainability.