A carbon tax by any other name: Public benefit funds in the American states

Abstract

Although there is substantial opposition to carbon taxation in the United States, a form of carbon tax is already in place in many jurisdictions. Twenty-two American states plus Puerto Rico and the District of Columbia have implemented a policy called the “public benefit fund,” in which utility companies add a charge per kilowatt-hour of energy consumed to the electricity bills of individuals and firms. Public benefit funds are monetary charges for energy usage, and are in several respects similar to carbon taxes. This paper gives an overview of the introduction of public benefit funds in the American states and their current extent, considers their similarities to and differences from carbon taxes, discusses several studies showing that they do have an impact on reduction of carbon emissions, and suggests that expansion or intensification of public benefit funds could be a path to lower emissions for the country.