A few weeks before the election, I had a conversation with a friend who works for an environmental organization about the possibility of a carbon tax being implemented in the U.S. during the next four years. To me, the prospect seemed unlikely, regardless of who won last Tuesday. He seemed more optimistic -- but then, he's much better with economics than I am.
His optimism may have been warranted. From Bloomberg, reports that a carbon tax could be considered as a deficit-reduction tool.
Barack Obama may consider introducing a tax on carbon emissions to help cut the U.S. budget deficit after winning a second term as president, according to HSBC Holdings Plc.
A tax starting at $20 a metric ton of carbon dioxide equivalent and rising at about 6 percent a year could raise $154 billion by 2021, Nick Robins, an analyst at the bank in London, said today in an e-mailed research note, citing Congressional Research Service estimates. “Applied to the Congressional Budget Office’s 2012 baseline, this would halve the fiscal deficit by 2022,” Robins said.