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Many people think that a carbon tax should be levied on fossil fuels that emit
GHG. Scaling the tax on the amount of carbon dioxide produced per Btu of energy
by fuel type would automatically make higher GHG-emitting fuels like coal more
expensive, and encourage greater usage of lower GHG fuels such as natural gas. A
simple chart like that shown back in Fig. 10.1 could suffice. No tax at all would be
levied on other forms of energy that emit zero GHG like wind, solar, geothermal,
hydro, or nuclear. Likewise, biofuels such as ethanol would not be subject to a carbon tax because their CO 2 emissions are already part of the carbon cycle.
The goal of a carbon tax is to make fossil fuel more expensive. The tax transfers
the currently externalized cost of climate change onto the consumers who are actually using the energy. The higher cost of fossil will encourage conservation and
make renewables more price-competitive without the need for technological breakthroughs. Both of these actions will reduce GHG emissions. Finally, a tax will provide funding for CCS and DAC projects to capture and store carbon dioxide without
the need for convoluted economic justifications. A number of states are in fact discussing Regional Greenhouse Gas Initiatives (RGGI) as a way to make economic
tradeoffs between carbon emissions and energy. With a steady revenue stream coming in from a carbon tax, this gets much easier.
For decades the development of alternative energy sources sought to come up
with new technology to produce sustainable, clean energy at a cost that was competitive with fossil fuels. None was ever able to do so, at least not without major tax
incentives. People are unwilling to pay more for sustainable, clean energy if cheaper
alternatives like coal are available. Simply raising the cost of fossil fuels through a
carbon tax will level the playing field.
The details of implementing a carbon tax are best left up to the experts. It could
be levied on the producers at the production point, such as the wellhead or mine, and
passed on through the system to the consumer. Or it could be levied on the consumer directly, such as an excise tax added to gasoline prices or electric bills. Non
GHG-emitting energy sources and fossil fuel combustion that has implemented
CCS would not be subject to paying a carbon tax, and hence receive a cost incentive
to compete against fossil energy. Likewise, fossil fuels used for non-combustion
purposes, such as plastics manufacturing would also not pay a carbon tax.
The cost of the carbon tax has to be high enough to match or exceed the cost of
CCS. If it is cheaper to install carbon capture technology than pay a carbon tax,
companies burning fossil fuels will have an economic incentive to add
CCS. Regulations should ensure that the cost of CCS passed on to the consumer in
terms of electric prices or manufacturing costs should be equal to or less than the
prices charged by non-CCS competition forced to pay a carbon tax.
The revenue stream from a carbon tax can be used to implement DAC projects
that focus on reducing the existing levels of CO 2 in the atmosphere. This is critical
for mitigating the effects of global climate change, and restoring the pH balance in
the oceans. There are a number of ideas for ways to achieve this that include planting a trillion trees, fertilizing the southern ocean with iron to encourage a carbonconsuming algal bloom, and using mechanical devices to capture and store CO 2
from large volumes of air (Kramer 2018). Despite wishful thinking, none of these
11.3 Energy and Climate Sustainability
Many people think that a carbon tax should be levied on fossil fuels that emit
GHG. Scaling the tax on the amount of carbon dioxide produced per Btu of energy
by fuel type would automatically make higher GHG-emitting fuels like coal more
expensive, and encourage greater usage of lower GHG fuels such as natural gas. A
simple chart like that shown back in Fig. 10.1 could suffice. No tax at all would be
levied on other forms of energy that emit zero GHG like wind, solar, geothermal,
hydro, or nuclear. Likewise, biofuels such as ethanol would not be subject to a carbon tax because their CO 2 emissions are already part of the carbon cycle.
The goal of a carbon tax is to make fossil fuel more expensive. The tax transfers
the currently externalized cost of climate change onto the consumers who are actually using the energy. The higher cost of fossil will encourage conservation and
make renewables more price-competitive without the need for technological breakthroughs. Both of these actions will reduce GHG emissions. Finally, a tax will provide funding for CCS and DAC projects to capture and store carbon dioxide without
the need for convoluted economic justifications. A number of states are in fact discussing Regional Greenhouse Gas Initiatives (RGGI) as a way to make economic
tradeoffs between carbon emissions and energy. With a steady revenue stream coming in from a carbon tax, this gets much easier.
For decades the development of alternative energy sources sought to come up
with new technology to produce sustainable, clean energy at a cost that was competitive with fossil fuels. None was ever able to do so, at least not without major tax
incentives. People are unwilling to pay more for sustainable, clean energy if cheaper
alternatives like coal are available. Simply raising the cost of fossil fuels through a
carbon tax will level the playing field.
The details of implementing a carbon tax are best left up to the experts. It could
be levied on the producers at the production point, such as the wellhead or mine, and
passed on through the system to the consumer. Or it could be levied on the consumer directly, such as an excise tax added to gasoline prices or electric bills. Non
GHG-emitting energy sources and fossil fuel combustion that has implemented
CCS would not be subject to paying a carbon tax, and hence receive a cost incentive
to compete against fossil energy. Likewise, fossil fuels used for non-combustion
purposes, such as plastics manufacturing would also not pay a carbon tax.
The cost of the carbon tax has to be high enough to match or exceed the cost of
CCS. If it is cheaper to install carbon capture technology than pay a carbon tax,
companies burning fossil fuels will have an economic incentive to add
CCS. Regulations should ensure that the cost of CCS passed on to the consumer in
terms of electric prices or manufacturing costs should be equal to or less than the
prices charged by non-CCS competition forced to pay a carbon tax.
The revenue stream from a carbon tax can be used to implement DAC projects
that focus on reducing the existing levels of CO 2 in the atmosphere. This is critical
for mitigating the effects of global climate change, and restoring the pH balance in
the oceans. There are a number of ideas for ways to achieve this that include planting a trillion trees, fertilizing the southern ocean with iron to encourage a carbonconsuming algal bloom, and using mechanical devices to capture and store CO 2
from large volumes of air (Kramer 2018). Despite wishful thinking, none of these
11.3 Energy and Climate Sustainability