> I would expect that $25-30 per tonne of CO2 could apply pretty much
> across the board (but not instead of the existing taxes on petrol). You
> suggested $100 per tonne of carbon which is a rather different
> proposition entirely!
As you said earlier, a tonne of carbon will yield 44/12=3.67 tonnes of
carbon dioxide. $100 per tonne of carbon is therefore the same as $100
per 3.67 tonnes of carbon dioxide or $27 per tonne of carbon dioxide.
If you do apply an additional tax of $25-30 per tonne of CO2 across the
board, that'll primarily hurt coal fired electricity generation, and
have a very modest effect on transportation (rough back of the
envelope, it would raise US gasoline prices by 10% and European
gasoline prices by 5%).
> If some people/govts decide that energy independence (say, via local
> coal) is more important than worrying abot CO2 emissions, that's up to
> them.
There is a continuum from subsidies to taxes and the final level can
depend on more than one factor. I don't see a problem with governments
saying that CO2 exactly offsets the benefits of coal (or nearly enough
so, administration costs mean that 0 is the appropriate rate even when
the offsetting yields a value slightly above or below 0).
> The "no brainer" was that if people want to reduce emissions, a
> tax on them would surely push the market towards reductions (implicitly:
> as an alternative to such ideas as emissions caps, regulations on
> efficiency, govt-controlled investment in alternative energy in the hope
> that some magic solution turns up...whatever other schemes there are
> floating around).
Yes a tax will yield (relatively speaking at least) emissions
reductions. That is a "no brainer".
> What's (potentially) different is introducing a "polluter pays" penalty
> for CO2. What is already widely done is by definition the status quo, so
> hoping that it will result in emissions reduction seems like wishful
> thinking.
The "polluter pays" penalty, I would argue, is already there, and
folded into the taxation/subsidy decisions for individual fuels.
Making it explicit by introducing offsetting taxes and subsidies (say
extra taxes on nuclear to make sure it does not benefit from the tax on
CO2), I think, potentially only introduces extra complexity.
If you are suggesting an increase in CO2 across the board by $25-30, I
accept that'll reduce emissions compared to not having the tax (though
it's unlikely to be enough to actually reduce emissions, rather it'll
lower the emissions growth rate), but I can also tell you why
governments are not very keen, and that as said this across the board
increase would primarily affect the competiveness of coal, and with
restrictions on nuclear build, particularly so compared with natural
gas, as $25-30 is not enough at present to make much of a difference
for renewables.
Earlier though, you were suggesting that you wouldn't want the carbon
tax applied across the board. If you wanted increases primarily in
gasoline taxes, I'd be very happy with that, particularly where the US
is concerned (though phased in there's already been a hefty price
increase over recent years in the US).
I'd also be very happy, if you wanted to enhance the competitiveness of
nuclear. For me France is the model country in terms of energy policy,
and they don't even need an explicit carbon dioxide tax to get to per
capita emissions a third those of the US (6 2/3 compared to 20
roughly), and 40% lower (6 2/3 compared to 11) than Germany and
Denmark.
If you want more renewables, direct subsidies for renewables are the
much better option, otherwise CO2 taxes would have to rise to levels
that'll kill coal and lead to either 80% + nuclear (if the regulatory
environment is favourable) or 80% + natural gas and substantial price
increases for consumers.
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