Is a Carbon Tax Really the answer? Bruce M. Everett February 28, 2013

OECD Europe US Global CO 2 Emissions from Energy 1990 = 22 Billion tonnes China Source: Energy Information Administration Rest of the World

Global CO 2 Emissions from Energy 2013 = 33 Billion tonnes Source: Energy Information Administration

Global CO 2 Emissions from Energy 1990 = 22 Billion tonnes Source: Energy Information Administration

OECD Europe US China Global CO 2 Emissions from Energy 2013 = 33 Billion tonnes Source: Energy Information Administration Rest of the World

Global CO 2 Emissions from Energy 2035 = 43 Billion tonnes Source: Energy Information Administration

Global CO 2 Emissions from Energy 2013 = 33 Billion tonnes Source: Energy Information Administration

OECD Europe US China Global CO 2 Emissions from Energy 2035 = 43 Billion tonnes Rest of the World Source: Energy Information Administration

Energy intensity (Btu per $2005 of GDP) US China

Global CO 2 Emissions from Energy 2035 = 43 Billion tonnes OECD Europe US China Rest of the World 51 mpg $? Biofuels $320 B Wind $200 B Electric Cars $60 B Solar $200 B 2% A $trillion worth of policy Wind Solar Source: Energy Information Administration

Global CO 2 Emissions from Energy 2035 = 43 Billion tonnes OECD Europe US China Rest of the World Wind Solar 2% Nuclear

In 2035, China and India are projected to emit this much CO 2 from coal. After 80 years and $1 trillion in subsidies, the global solar industry will offset this much.

The average American household emits about 50 metric tonnes of CO 2 annually.

How big should the carbon tax be?

If you want: You need a tax of (per tonne) Costing each family (annually) Onshore wind$170$8,500 Offshore wind$570$28,500 Electric cars$600$30,000 Solar PV (home)$790$39,500 Light rail$10,000$500,000 How big should the carbon tax be? The current European carbon price:$6/tonne The current CDM price:$1/tonne US RGGI price:$2/tonne

Sin taxes are levied not to eliminate sin, but to raise revenue ($40 billion in 2010). Prediction: Carbon taxes will be structured for revenue, not carbon reduction.

The key problems with a carbon tax: 1.Real CO 2 emission reductions have unacceptable economic consequences. 2.US carbon emissions no longer matter.