Ideal carbon tax policy is internationally coordinated, fully internalizes externalities, redistributes revenues to those harmed, and is politically acceptable, generating predictable market signals. Since nonideal circumstances rarely allow all these conditions to be met, moral issues arise. This paper surveys some of the work in moral philosophy responding to several of these issues. First, it discusses the moral drivers for estimates of the social cost of carbon. Second, it explains how national self-interest can block climate action and suggests international policies—carbon (...) border tax adjustments and carbon clubs—that can help address these concerns. Third, it introduces some of the social science literature about the political acceptability of carbon taxes before addressing a couple common public concerns about carbon taxes. Finally, it introduces four carbon revenue usage options, arguing that redistributive and climate compensation measures are most morally justified. [Open access]. (shrink)

Intergenerational impartiality requires putting the welfare of future generations at par with that of our own. However, rational choice requires weighting all welfare values by the respective probabilities of realization. As the risk of non-survival of mankind is strictly positive for all time periods and as the probability of non-survival is cumulative, the probability weights operate like discount factors, though justified on a morally justifiable and completely different ground. Impartial intertemporal welfare maximization is acceptable, though the welfare of people in (...) the very far future has lower effects as the probabilities of their existence are also lower. However, the effective discount rate on future welfare values (distinct from monetary values) justified on this ground is likely to be less than 0.1 per annum. Such discounting does not compromise environmental protection and sustainability unduly. The finiteness of our universe implies that the sum of our expected welfare to infinity remains finite, solving the paradox of having to compare different infinite values in optimal growth/conservation theories. (shrink)