Like many concerned about climate change, I've thought, and read, quite a
lot about which policy track should be pursued to reduce carbon emissions:
1) cap and trade; or 2) carbon tax. For whatever reason, an obvious
thought occurred to me this morning: why not both (assuming, for the
moment, that there indeed was sufficient political will to take action)?
I'm sure that there may be more recent or more comprehensive analyses out
there, but what I found on Google was this article by Alan Durning. Just
food for thought...
The good news is that with careful policy design, Cap and Tax can be
better than either Cap or Tax. The Tax toughens the Cap, the way steel
rebar strengthens concrete. The bad news is that without careful design,
the two could weaken each other.
> the main problem with a carbon tax is that it doesn't contain a hard cap
> and emission reduction targets that decline over time- if the goal of any
> given climate policy is to keep co2 levels at 350 ppm. a carbon tax doesnt
> guarantee the environmental result- is the tax set too high? or too low?
> having to constantly revisit the setting of the tax in the political realm
> is not a realisitic endeavor if the goal is climate stabilization- a tax
> is better suited to drive social or econ results but not environmental-
> food for thought
> From: Jason Evans <[log in to unmask]>
> To: [log in to unmask]
> Sent: Tue, June 29, 2010 10:35:18 AM
> Subject: Economist carbon tax opinion piece
> As a follow up to Steve's very interesting post about Amyris, I thought
> I'd post this brief piece about the potential virtues of a carbon tax
> that was published in last week's Economist magazine.
> The Economist has long advocated a carbon tax as the best way to deal with
> climate change. Carbon taxes are a subspecies of Pigovian tax; taxes that
> are designed primarily to change behaviour rather than to raise revenue.
> The idea is to try to manipulate the price of a good or a service in order
> to capture all the negative externalities it imposes.
> Jason M. Evans, Ph.D.
> Environmental Sustainability Analyst
> Environmental Policy Program
> Carl Vinson Institute of Government
> University of Georgia
> Lucy Cobb 318
> Office phone: 706-542-2808
> [log in to unmask]
> On 6/29/2010 10:08 AM, Humphrey,Stephen R wrote:
> This article is about investing, but it also illustrates the challenge of
> a biofuel company trying to commercialize its technology--very
>>Amyris has two big investment risks – product economics and scientific
>> progress. At today’s prices, any company using sugar as a feedstock
>> would face similar challenges producing diesel equivalent products that
>> compete with fossil fuels if the price of oil is below $125 per barrel.
>>Dr. Stephen R. Humphrey, Director,
>>School of Natural Resources and Environment,
>>Box 116455, 103 Black Hall, University of Florida
>>Gainesville, FL 32611-6455 USA
>>Tel. 352-392-9230, Fax 352-392-9748
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