NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Using Tax Expenditures to Achieve Energy Policy Goals

Gilbert E. Metcalf

NBER Working Paper No. 13753
Issued in January 2008
NBER Program(s):   EEE   PE

Tax expenditures are a major source of support for energy related activities in the federal budget exceeding direct budget support for energy by a factor of nearly six. Focusing on the policy goals of reducing greenhouse gas emissions and petroleum consumption, I find these tax expenditures highly cost ineffective at best and counterproductive at worse. The tax credit for ethanol is an example of a cost ineffective subsidy. The cost of reducing CO2 emissions through this subsidy exceeded $1,700 per ton of CO2 avoided in 2006 and the cost of reducing oil consumption over $85 per barrel.

download in pdf format
   (52 K)

email paper

This paper is available as PDF (52 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w13753

Published: Gilbert E. Metcalf, 2008. "Using Tax Expenditures to Achieve Energy Policy Goals," American Economic Review, American Economic Association, vol. 98(2), pages 90-94, May.

Users who downloaded this paper also downloaded these:
Metcalf w12568 Federal Tax Policy Towards Energy
Heal w15081 The Economics of Renewable Energy
Carlson and Metcalf w14110 Energy Tax Incentives and the Alternative Minimum Tax
Metcalf w15429 Investment in Energy Infrastructure and the Tax Code
Gillingham, Newell, and Palmer w15031 Energy Efficiency Economics and Policy
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us