New York should have a carbon tax to boost renewable energy, says a leading financial thinktank.

The Network for Sustainable Financial Markets, an international non-partisan group of financial experts and academics, has teamed up with the Citizens’ Climate Lobby of New York City to promote the case for a tax throughout New York State.

The tax would reduce incentives for purchasing fossil fuels and increase incentives for buying renewable energy. Revenues could be returned to consumers particularly the fuel poor.

Sara Hsu, Assistant Professor at the State University of New York, revealed the idea came from a project she ran with her economics class.

She said: “My students believed that a carbon tax was the best way to provide real incentives for curbing pollution. They did research on carbon taxes around the world and found that not only did these taxes reduce carbon emissions but that they also had a neutral effect on the economy.”

Under the proposals, a tax would be put on fossil fuels by carbon content.

For example, a $20 carbon tax per metric ton of carbon dioxide emitted, levied on gasoline would result in an extra 17.5 cents. One gallon of gas, if $3.00, would cost $3.17 with the tax, less than 6% of the price, claim the academics.

“We want to protect low income households by refunding the tax to them but the additional proceeds could be used for tax breaks or infrastructure and energy investment,” said Professor Hsu.

Adrienne Perovich, from the Citizens’ Climate Lobby (CCL) of New York City said it was time for the politicans to act: “If we want to preserve our standard of living for future generations, we need to act now to reduce CO2 emissions.

“The first step is holding our elected officials accountable and letting them know we want strong, economically sound legislation now.”

There is no national carbon tax in America though some individual states have imposed local tax regimes including Colorado and California.