Tuesday, December 20, 2011 1:48pm

Carbon Tax

A tax on the carbon content of fuels would be a less expensive way to reduce carbon-dioxide emissions than would a collection of policies such as “corporate average fuel economy” requirements for automobiles.

Responses
 

Source: IGM Economic Experts Panel
www.igmchicago.org/igm-economic-experts-panel

Responses weighted by each expert's confidence

Source: IGM Economic Experts Panel
www.igmchicago.org/igm-economic-experts-panel
Participant University Vote Confidence Comment Bio/Vote History
Acemoglu Daron Acemoglu MIT Strongly Agree 7
Bio/Vote History
         
Alesina Alberto Alesina Harvard Agree 8
Bio/Vote History
         
Altonji Joseph Altonji Yale Strongly Agree 6
Bio/Vote History
         
Auerbach Alan Auerbach Berkeley Strongly Agree 9
Bio/Vote History
         
Autor David Autor MIT Strongly Agree 9
See Chris Knittel's forthcoming paper in Journal of Economic Perspectives on this topic: Reducing Petroleum Consumption from Transportation
Bio/Vote History
         
Baicker Katherine Baicker Harvard Agree 4
Taxing the externality would be much more efficient than CAFE - but the challenge is getting the tax rate right
Bio/Vote History
         
Banerjee Abhijit Banerjee MIT --- ---
---
Bio/Vote History
Joined 11/2013 Strongly Agree 8
It allows the market to sort out the right margins to adjust.
 
Bertrand Marianne Bertrand Chicago Agree 4
Bio/Vote History
         
Brunnermeier Markus Brunnermeier Princeton --- ---
---
Bio/Vote History
Joined 11/2013 Agree 6
See Weitzman 1974 (Review of Economic Studies) for an analysis of the exact trade-offs.
 
Chetty Raj Chetty Harvard Strongly Agree 7
Bio/Vote History
         
Chevalier Judith Chevalier Yale Agree 8
That is not to suggest that a carbon cap and trade program is necessarily worse than a tax. But CAFE worse.
Bio/Vote History
         
Currie Janet Currie Princeton Agree 7
Bio/Vote History
         
Cutler David Cutler Harvard Agree 7
Bio/Vote History
         
Deaton Angus Deaton Princeton Strongly Agree 5
Bio/Vote History
         
Duffie Darrell Duffie Stanford Strongly Agree 2
The indirect route of fleet fuel standards causes distortions in the auto industry and fails to capture other sources of C02 emissions.
Bio/Vote History
         
Edlin Aaron Edlin Berkeley Strongly Agree 9
Always better to be direct. So long as administration of a fuel tax is as easy as other indirect regulation it is better.
Bio/Vote History
         
Eichengreen Barry Eichengreen Berkeley Agree 6
Bio/Vote History
         
Einav Liran Einav Stanford --- ---
---
Bio/Vote History
Joined 11/2013 Uncertain 6
 
Fair Ray Fair Yale Agree 5
Bio/Vote History
         
Finkelstein Amy Finkelstein MIT --- ---
---
Bio/Vote History
Joined 11/2013 Strongly Agree 10
 
Goldberg Pinelopi Goldberg Yale Uncertain 6
Too vague... It is not clear how this tax would be implemented.
Bio/Vote History
         
Goldin Claudia Goldin Harvard Strongly Agree 4
Bio/Vote History
         
Goolsbee Austan Goolsbee Chicago Agree 4
the one is specifically aimed at carbon so seems almost tautological. not necess true for other considerations like natl security etc
Bio/Vote History
         
Greenstone Michael Greenstone Chicago Strongly Agree 8
Bio/Vote History
         
Hall Robert Hall Stanford Strongly Agree 7
totally basic economics!
Bio/Vote History
         
Hart Oliver Hart Harvard --- ---
---
Bio/Vote History
Joined 11/2013 Strongly Agree 10
We know from economic theory that the market solution will internalize externalities efficiently; the other approach much less so.
 
Holmström Bengt Holmström MIT Agree 5
If social cost sensitive to total emissions or hard to measure, quantity controls may be better than tax.
Bio/Vote History
         
Hoxby Caroline Hoxby Stanford Did Not Answer
Bio/Vote History
         
Hoynes Hilary Hoynes Berkeley --- ---
---
Bio/Vote History
Joined 11/2013 Strongly Agree 10
 
Judd Kenneth Judd Stanford Strongly Agree 9
If the objective is to reduce GHGs then the best policy is to tax GHG emissions. CAFE standards will initially do little.
Bio/Vote History
         
Kaplan Steven Kaplan Chicago --- ---
---
Bio/Vote History
Joined 11/2013 Strongly Agree 7
Assuming revenues reduce other taxes.
 
Kashyap Anil Kashyap Chicago Agree 2
Bio/Vote History
         
Klenow Pete Klenow Stanford Strongly Agree 7
Would help equalize marginal cost across sources. Revenue can keep marginal tax rates on work, saving lower than otherwise.
-see background information here
Bio/Vote History
         
Lazear Edward Lazear Stanford Disagree 5
This compares two ineffective approaches. The magnitude of this problem is so great that no sufficient carbon tax is feasible worldwide.
Bio/Vote History
         
Levin Jonathan Levin Stanford Agree 3
In principle, yes. In practice, would depend a huge amount on the design of the tax vs other policies, so hard to give a blanket answer.
Bio/Vote History
         
Maskin Eric Maskin Harvard Agree 7
Bio/Vote History
         
Nordhaus William Nordhaus Yale Strongly Agree 9
Many studies on this, see RfF on national energy policies, Dec 2010 as example.
Bio/Vote History
         
Obstfeld Maurice Obstfeld Berkeley Agree 5
Bio/Vote History
         
Rouse Cecilia Rouse Princeton Agree 5
I believe this to be the case in theory although in practice may be a more effective way to achieve environmental objectives.
Bio/Vote History
         
Saez Emmanuel Saez Berkeley Agree 7
Bio/Vote History
         
Samuelson Larry Samuelson Yale --- ---
---
Bio/Vote History
Joined 11/2013 Agree 8
Of course, one has to get the tax right, which is a big if ....
 
Scheinkman José Scheinkman Princeton Strongly Agree 7
Bio/Vote History
         
Schmalensee Richard Schmalensee MIT Strongly Agree 8
Bio/Vote History
         
Shapiro Carl Shapiro Berkeley --- ---
---
Bio/Vote History
Joined 11/2013 Strongly Agree 10
The CAFE standards are clearly not as efficient, and in this situation there is a very easy way to impose to carbon tax: on the fuel.
 
Shimer Robert Shimer Chicago --- ---
---
Bio/Vote History
Joined 11/2013 Strongly Agree 10
 
Shin Hyun Song Shin Princeton Uncertain 4
Bio/Vote History
         
Stock James Stock Harvard Strongly Agree 6
Bio/Vote History
         
Stokey Nancy Stokey Chicago Strongly Agree 8
Bio/Vote History
         
Thaler Richard Thaler Chicago Strongly Agree 9
Since a carbon tax is politically infeasible how about hiking the gas tax by a dollar and then index it. We now have a negative carbon tax.
Bio/Vote History
         
Udry Christopher Udry Yale Strongly Agree 8
This is as clear as economics gets; provides incentives to find minimally costly ways to reduce emissions.
-see background information here
Bio/Vote History
         
Zingales Luigi Zingales Chicago Strongly Agree 6
Bio/Vote History
         

10 New Economic Experts join the IGM Panel


For the past two years, our expert panelists have been informing the public about the extent to which economists agree or disagree on important public policy issues. This week, we are delighted to announce that we are expanding the IGM Economic Experts Panel to add ten new distinguished economists. Like our other experts, these new panelists have impeccable qualifications to speak on public policy matters, and their names will be familiar to other economists and the media.

To give the public a broad sense of their views on policy issues, each new expert has responded to a selection of 16 statements that our panel had previously addressed. We chose these 16 statements, which cover a wide range of important policy areas, because the original panelists' responses to them were analyzed in a paper comparing the views of our economic experts with those of the American public. You can find that paper, by Paola Sapienza and Luigi Zingales, here. The paper, along with other analyses of the experts' views, was discussed during the American Economic Association annual meetings, and the video can be found here.

The new panelists' responses to these statements can be seen on their individual voting history pages. Our ten new economic experts are:

Abhijit Banerjee (MIT)
Markus K. Brunnermeier (Princeton)
Liran Einav (Stanford)
Amy Finkelstein (MIT)
Oliver Hart (Harvard)
Hilary Hoynes (Berkeley)
Steven N. Kaplan (Chicago)
Larry Samuelson (Yale)
Carl Shapiro (Berkeley)
Robert Shimer (Chicago)


Please note that, for the 16 previous topics on which these new panelists have voted, we left the charts showing the distribution of responses unchanged. Those charts reflect the responses that our original panelists gave at the time, and we have not altered them to reflect the views of the new experts.

We have also taken this opportunity to ask our original panelists whether they would vote differently on any of the statements we have asked about in the past. Several experts chose to highlight statements to which they would currently respond differently. In such cases, you will see this "revote" below the panelist's original vote. We think you will enjoy seeing examples of statements on which some experts have reconsidered.

As with the 16 previous statements voted on by new panelists, these "revote" responses are not reflected in the chart that we display showing the distribution of views for that topic: all the charts for previous questions reflect the distribution of views that the experts expressed when the statement was originally posed.

About the IGM Economic Experts Panel

This panel explores the extent to which economists agree or disagree on major public policy issues. To assess such beliefs we assembled this panel of expert economists. Statistics teaches that a sample of (say) 40 opinions will be adequate to reflect a broader population if the sample is representative of that population.

To that end, our panel was chosen to include distinguished experts with a keen interest in public policy from the major areas of economics, to be geographically diverse, and to include Democrats, Republicans and Independents as well as older and younger scholars. The panel members are all senior faculty at the most elite research universities in the United States. The panel includes Nobel Laureates, John Bates Clark Medalists, fellows of the Econometric society, past Presidents of both the American Economics Association and American Finance Association, past Democratic and Republican members of the President's Council of Economics, and past and current editors of the leading journals in the profession. This selection process has the advantage of not only providing a set of panelists whose names will be familiar to other economists and the media, but also delivers a group with impeccable qualifications to speak on public policy matters.

Finally, it is important to explain one aspect of our voting process. In some instances a panelist may neither agree nor disagree with a statement, and there can be two very different reasons for this. One case occurs when an economist is an expert on a topic and yet sees the evidence on the exact claim at hand as ambiguous. In such cases our panelists vote "uncertain". A second case relates to statements on topics so far removed from the economist's expertise that he or she feels unqualified to vote. In this case, our panelists vote "no opinion".

The Economic Experts Panel questions are emailed individually to the members of the panel, and each responds electronically at his or her convenience. Panelists may consult whatever resources they like before answering.

Members of the public are free to suggest questions (see link below), and the panelists suggest many themselves. Members of the IGM faculty are responsible for deciding the final version of each week’s question. We usually send a draft of the question to the panel in advance, and invite them to point out problems with the wording if they see any. In response, we typically receive a handful of suggested clarifications from individual experts. This process helps us to spot inconsistencies, and to reduce vagueness or problems of interpretation.

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