A carbon-reduction tax credit is a carbon tax, and that’s a good thing

Tweet Stoats of the world can take pleasure in this proposal by outgoing senator Max Baucus to simplify the approximately one billion Amercian clean energy tax incentives and to provide instead a tax credit based on how much carbon reduction (above a threshold) is produced per unit of electricity or unit of transportation fuel. There’s no economic difference between providing a tax credit that reduces from a higher baseline, versus imposing a tax that increases from a lower baseline, so long as they’re equally comprehensive

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A carbon-reduction tax credit is a carbon tax, and that’s a good thing