Taxing Carbon to Finance Tax Reform

This issue brief by the World Resources Institute and Duke Energy argues that a federal carbon tax on the carbon content of oil, coal, and natural gas would support tax reform, reduce carbon dioxide emissions, and enhance energy security in the United States.

• A carbon tax is described as an efficient consumption tax on the carbon content of natural gas, coal, and oil that assigns costs to the carbon dioxide emissions released during energy production. Such a tax would be easy to administer because it could be collected at points where fuels enter the economy, such as coal-processing plants, oil refineries, natural gas providers, and ports. Applying this levy to approximately 2,000 entities would cover 82 percent of greenhouse gas emissions in the U.S. and nearly all fossil fuel consumption.
• A carbon tax could generate substantial revenue to fund other tax reform initiatives, potentially as part of revenue-neutral packages that reduce existing inefficient taxes on investment and productive labor. The Congressional Budget Office estimates that a tax starting at $12 per metric ton of carbon and gradually increasing to $17 per metric ton would produce $208 billion in revenue over ten years.
• The document asserts that a federal, market-based, and economy-wide carbon tax is the most effective approach for climate change policy in the United States. A tax that increases predictably and gradually would create incentives to lower carbon dioxide emissions with minimal disruption and improve long-term energy security by promoting a less carbon-intensive economy.

APA

World Resources Institute (n.d.). Taxing Carbon to Finance Tax Reform. https://www.wri.org/research/taxing-carbon-finance-tax-reform

Chicago

World Resources Institute. Taxing Carbon to Finance Tax Reform. n.d. https://www.wri.org/research/taxing-carbon-finance-tax-reform.

Wikipedia

{{cite report |author=World Resources Institute |title=Taxing Carbon to Finance Tax Reform |url=https://www.wri.org/research/taxing-carbon-finance-tax-reform |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldresourcesinstitutendtaxing, author = {{World Resources Institute}}, title = {{Taxing Carbon to Finance Tax Reform}}, institution = {World Resources Institute}, url = {https://www.wri.org/research/taxing-carbon-finance-tax-reform}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }