Saturday, June 25, 2011

The impact of carbon taxes on New Hampshire manufacturing

Environmental economist Matthew Kahn estimates that a $15 per ton carbon tax would cause a 2.9% decline in New Hampshire manufacturing, or 1400 jobs.

The RGGI price is $1.89, suggesting a current, real-life decrease of approximately .4%, or 177 jobs.

Kahn adds:
Before opponents of cap and trade start to cite these numbers, it is important that clear headed folks keep in mind that this legislation will also stimulate the vaunted "green jobs" for the State. ...

The key point that nerds need to study is that such legislation simultaneously "destroys jobs" and "creates jobs". Here is another NBER study.


  1. Wow, that is crazy. But then again a carbon tax might save us millions of dollars in the long wrong. Emissions which are freely released into the air are pretty expensive if you account the damage done to out envirnment and health. Very cool article, it's definitely something to think about.

    Penny Stocks

  2. Thanks for commenting.

    A carbon tax would definitely help out in the long run, and I wholeheartedly support it. (I count myself as a member of the Pigou Club.)

    If the tax is only enacted on the state level (or the New England level), however, it doesn't have as much effect on carbon emissions, and drives some businesses out of the state. This is the scenario Kahn's numbers are based on.

    It still might be worth doing, for a variety of reasons, but it's better if done at the federal level.