By: Zack Colman

Taxing carbon would generate $1.5 trillion, potentially giving politicians cover from making politically difficult decisions on taxes and social spending cuts, according to a study by the Massachusetts Institute of Technology (MIT) released Monday.

A carbon tax would take pressure off Congress to find “tradeoffs” between closing the deficit gap and reviving the economy, according to John Reilly, an author of the study. 

“Congress will face many difficult tradeoffs in stimulating the economy and job growth while reducing the deficit,” Reilly, the co-director of MIT’s Joint Program on the Science and Policy of Global Change, said in a statement. 

“But with the carbon tax there are virtually no serious tradeoffs. Our analysis shows the overall economy improves, taxes are lower and pollution emissions are reduced.”

The study found that taxing carbon at $20 per ton would generate $1.5 trillion in revenue in a 10-year period. That could be used to reduce corporate and personal income taxes and maintain social services spending, all while reducing the deficit.

The study said the carbon tax also would lower pollution by 20 percent by 2050, compared with 2006 levels, and prevents oil imports from rising. It would also shift energy markets to clean technology, a sector to which the United States has already devoted much capital, the report said.

Sebastian Rausch, an assistant professor of energy economics at ETH Zurich, co-authored the study with Reilly. The study assumed full employment and was based on an earlier Congressional Budget Office report that used a $20-per-ton carbon tax.

Conservatives and liberals alike have recently explored the possibility of a carbon tax. 

Right-leaning think tank the American Enterprise Institute (AEI) hosted informal discussions on the topic in July. GOP leadership, however, firmly dismissed the idea of a carbon tax following reports about the AEI talks.

Rep. Jim McDermott (D-Wash.) introduced carbon tax legislation in August, the revenue from which would be used to pay down the deficit and to offset cost increases. That proposal largely mirrors one from Sens. Maria Cantwell (D-Wash.) and Susan Collins (R-Maine).