Today we could jump-start a carbon fee at a large rate, say $100 per ton of CO2, collected from fossil fuel companies on the first sale at domestic mines and ports-of-entry. This initial fee generates more than $600B per year in the U.S., which should be 100% distributed electronically (to bank accounts or debit cards) to all legal residents. With half a share for children up to two per family, a family of four or more would receive about $6000/year. Subsequent increase of the carbon fee would be slow, e.g., $10/ton per year, to allow people and entrepreneurs time to make changes and investments, as we move toward carbon-free energies and energy efficiency.
$100/ton would increase the price of gasoline at the pump about $1/gallon. However, such a price rise will occur in the near future anyhow. It is only a matter of whose pocket the added money will go into: the fossil fuel industry’s pocket or the public’s pocket.
The ultimate price at the pump will be similar in carbon-fee and no-carbon-fee cases. In the carbon-fee case, fuel demand falls over time as fuel use declines, in the U.S. by more than 30% in 10 years and 50% in 20 years. Thus conventional fossil fuels will suffice to carry us beyond fossil fuels. Expensive unconventional fossil fuels such as tar sands and deep Arctic oil would mostly be left in the ground, regardless of pipelines.
Technology development is crucial to move us to a clean energy future, but it will be rapid only if there is a carbon fee that entrepreneurs and business people can count on to continue to rise. Government R&D was once a prime driver of technology progress, but not today. I speak from experience and understanding of how government bureaucracy has grown and now slows technical progress in even the most “can do” of agencies. Yes, it is worth reforming present agencies, but primarily so they can facilitate progress in private enterprise, rather than impede it.
Read more at Golden Opportunity - by James Hansen
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