If carbon taxes are such a non-brainer, why are they hardly used? I think the main reason is the different impacts they would have on the transportation sector and electricity in particular.
Even in the US, gasoline is taxed at around 50 cents per gallon (300 gallons or so per metric tonne, ie of the order of $150 per metric tonne of carbon). In Europe gasoline taxes are the equivalent of close to $1000 per metric tonne of carbon. A metric tonne of coal might contain something like 7500 kWh (back of the envelope, assuming 30 MJ/kg). With 33% efficiency that would yield 2500 kWh of electricity. At $1000 per metric tonne of carbon, that would be an absolute killer (40 cents per kWh in carbon taxes for coal generated electricity, back of the envelope). So, a carbon tax that's very modest in its effects for transportation fuels would have huge impacts on the relative competitiveness of natural gas, nuclear and coal. Worse, coal is a low cost domestic fuel. Many countries do not want to substitute it with imported natural gas or nuclear power. And politicians know that that would be the main effect. Consequently, nearly all taxation schemes in place make a distinction between different sectors. And if there is a gasoline tax in place (even in the US as said above, not low in terms of $ per metric tonne of carbon), adding a separate carbon tax just adds administrative costs, confusion. It's much more straightforward to just raise the gasoline tax. http://www.whitehouse.gov/news/releases/2001/03/20010314.html -------------------------- 'A recently released Department of Energy Report, "Analysis of Strategies for Reducing Multiple Emissions from Power Plants," concluded that including caps on carbon dioxide emissions as part of a multiple emissions strategy would lead to an even more dramatic shift from coal to natural gas for electric power generation' -------------------------- (President Bush on the subject) Even in countries that do place a great political emphasis on climate change, politicians know what a single carbon tax level across all sectors would do, and they generally don't like it. They'll make exemptions for coal (Germany for example - and the scheme isn't actually a carbon tax, but the European Emissions Trading Scheme, which is close) or for farmers (New Zealand), and they'll tax diesel, gasoline, kerosene, heating oil, nuclear electricity and red diesel all differently per metric tonne of carbon (the climate change levy in the UK translates into something stratospheric for nuclear, and something extremely modest for coal - it's per kWh of electricity rather than per tonne of carbon ...) --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups Global Change ("globalchange") newsgroup. Global Change is a public, moderated venue for discussion of science, technology, economics and policy dimensions of global environmental change. Posts will be admitted to the list if and only if any moderator finds the submission to be constructive and/or interesting, on topic, and not gratuitously rude. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [EMAIL PROTECTED] For more options, visit this group at http://groups.google.com/group/globalchange -~----------~----~----~----~------~----~------~--~---
