There is currently an ongoing debate in the United States Congress over the Environmental Protection Agency’s jurisdiction in regulating greenhouse gas emissions. Due to competing interests, a federal policy regulating the emissions has yet to pass through Congress. Many experts believe that it is the responsibility of individual states to pass climate policies, often with the hope that state policies will spark a national interest in controlling greenhouse gas emissions. Furthermore, the United States and the state of New Hampshire are currently facing budget deficits. One method to achieve a reduction in greenhouse gas emissions, as well as possibly reduce budget deficits, is to implement a state tax on emissions of carbon dioxide, an unregulated gas that is considered a significant contributor to climate change. This report examines the feasibility and implications of implementing a carbon tax in New Hampshire, and uses several examples of existing carbon taxes to describe various implementation strategies. New Hampshire’s current energy consumption patterns, fuel sources and climate policies provide favorable conditions for the incorporation of a carbon tax. However, the research has revealed several concerns regarding a carbon tax, mostly pertaining to the regressive nature of the tax. The effects of these concerns may be minimized through strategic tax design. Several options for revenue allocation and investment strategies are included in an analysis of a carbon tax in New Hampshire. This report describes several implementation options, but in order for policymakers to select an appropriate design for the state, they must first determine if the intention of the tax is to generate revenue or offset other taxes as a revenue neutral tax.