Putting a Price on Carbon: A Handbook for U.S. Policymakers is the first in a series of papers that the
World Resources Institute will produce with the aim of providing a clear and comprehensive understanding of
the key issues that will need to be addressed if the United States ultimately imposes a national price on carbon. The Handbook lays out what is already known about the design and effects of different approaches to pricing carbon, with a focus on carbon taxes and cap-and-trade programs. The Handbook provides an overview of carbon pricing— the types of decisions that need to be made in designing a program (including the political decisions about the use of revenue) and the expected economic impacts of alternative approaches. Pricing carbon increases the prices of goods across the economy in proportion to their carbon content, and thus in proportion to their effect on climate change. By raising the relative price of carbon-intensive goods (for example, fossil fuels), a carbon price encourages individuals and businesses to purchase less carbon-intensive alternatives.