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Tyler Cowen on Carbon Dividends

By purepedantry on April 19, 2008.

Tyler Cowen breaks down the thinking that a carbon cap with dividends is better than a carbon tax:

A broader question is whether the carbon dividends in fact make the citizenry better off. First there is the question of the incidence of the initial carbon tax, which of course falls on individuals one way or another. Second, does just sending people money, collectively, make the populace better off? Aggregate demand effects aside, will the fiscal stimulus make the citizenry as a whole better off? No. Will printing up more money and sending it to everyone, even if that is popular, make people better off? No.

...

I fear versions of this idea whose (possible) popularity rests on tricking voters. Being pro-science also means being pro-economic science. (Emphasis mine.)

Read the whole thing.

Tags
economics

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