Some will argue that green taxes would be economically disruptive and could hurt U.S. competitiveness. However, the facts tell a different story. A carbon tax that raised $40 billion a year would raise gasoline prices by less than 10 cents per gallon. As for the issue of competitiveness, Tufts professor Gilbert Metcalf proposes that because the U.S. levies much lower green taxes than other industrial nations, it could raise such taxes without putting our businesses at undue disadvantage. Environmental taxes can be regressive, but they can be combined with other tax changes to make the net effect more progressive.

It would be foolish to ignore a set of revenue options with all of these benefits, but that is exactly what policymakers are doing. The president’s tax reform panel, for example, looked only at consumption- and income-tax options. An environmental tax that simplified existing taxes, reduced the deficit and financed new spending would benefit both the economy and the environment. These days, we no longer have the option of passing up such viable choices.

William G. Gale is a senior fellow at the Brookings Institution and codirector of the Urban-Brookings Tax Policy Center.