A carbon taxs effect on the economy depends on how lawmakers would use revenues generated by the tax the tax would help reduce us emissions but would have only a modest effect on the earths climate without a worldwide effort the effects of a carbon tax on the us economy would depend on . May 2013 effects of a carbon tax on the economy and the environment provided as a convenience this screen friendly version is identical in content to the principal printer friendly version of the report. Cbo effects of a carbon tax on the economy and the environment by raising the cost of using fossil fuels a carbon tax would tend to increase the cost of producing goods and services especially things such as electricity or transportation that involve relatively large amounts of co 2 emissions. An economy wide federal carbon tax can significantly reduce us carbon dioxide emissions but will also impact the us economy a modeling exercise examines these macroeconomic impacts and demonstrates the effects of the tax on consumer prices and welfare. Effects of a carbon tax on the economy and environment washington dc congressional budget office environmental protection agency 2015 climate change updated october 7 2015 interagency working group on social costs of carbon 2015 technical update of the social costs of carbon for regulatory impact analysis
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