A tax on carbon emissions in the United States could eventually provide enough revenue to cut the country’s budget deficit in half, according to a Congressional Research Service report.
A carbon tax of $20 per ton that increases by 5.6 percent annually could cut down the projected 10-year deficit by around half, from $2.3 trillion to $1.1 trillion, states the report, which was released Tuesday, according to The Hill.
The report states that the tax would generate around $88 billion in 2012 and would reach $154 billion by 2021.
The 50 percent prediction relies on the Congressional Budget Office’s (CBO) “baseline” deficit projection, predicting the yearly budget deficit will only grow to $2.3 trillion. The CBO has said the deficit could grow to as much as $10 trillion.
There are downfalls to a carbon tax, the report states, noting that households would have to pay higher energy bills because utilities would force consumers to pay more, according to Reuters.
“However, the approaches that yield the largest overall benefit often impose disproportionate costs on lower-income households,” the report states.
The Epoch Times publishes in 35 countries and in 19 languages. Subscribe to our e-newsletter.