Surprise! Even A Crazy-High Carbon Tax Would Help California Businesses

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This material, Surprise! Even A Crazy-High Carbon Tax Would Help California Businesses, was published by ThinkProgress.

According to a new study out of California, taxing carbon emissions at a whopping $200 per ton would create more jobs in the state than business-as-usual.

The report was commissioned by Citizens Climate Lobby and carried out by Regional Economic Models, Inc. (REMI). The latter used a model of the California economy they’ve developed and combined it with the Carbon Tax Analysis Model — an open-source, Microsoft Excel-based model of carbon emissions and tax revenues at the state level, built off data from the U.S. Energy Information Administration. The resulting simulation looked at three different tax levels: $50 per ton of carbon emissions, $100 per ton, and $200 per ton. All three started at $10 per ton in 2015, then rose $10 annually until they hit their maximum level: $50 in 2019, $100 in 2024, and $200 in 2034.

Lots of previous analyses have tried to model the economic cost of the damage climate change will impose, and $200 per ton of emissions is consistent with several of them. But it’s also way higher than anything lawmakers here or elsewhere have considered. The Canadian province of British Columbia, for example, has a carbon tax of $27.88 per ton. When the Obama Administration estimated the price of carbon, the mid-range of their numbers was around $40 per ton.

Read the rest of this article on ThinkProgress.

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59 thoughts on “Surprise! Even A Crazy-High Carbon Tax Would Help California Businesses

  • About $100 a tonne is about the higest a carbon is likely to go as around this price most fossil fuel use will be eliminated and it should also become profitable to agriculturally remove some dioxide from the atmosphere and sequester it. This means that a country with a $100 a tonne carbon tax should in time be able to go carbon negative, which is something that it would probably be smart to do in the future and the sooner we get to that point the better.

    • Yes, but can you say that in Chinese?
      Go convince the people that are building coal fired power plants.

      • Meimei bu shi!

      • Like the US, Germany and Poland? The US installed 75% fossil fuel power generating capacity in the first half of 2013.
        Something needs to be done.

        • For all of 2013 renewables made up 37.16% of all new domestic electrical generating capacity for a total of 5,279 MW.

          That is more than three-times that provided for the year by coal (1,543 MW – 10.86%), oil (38 MW – 0.27%), and nuclear power (0 MW – 0.00%) combined. However, natural gas dominated 2013 with 7,270 MW of new capacity (51.17%).

          While the amount of NG capacity added sounds bad, do remember that gas is very dispatchable and sits idle about 75% of the time. As more renewables and storage comes on line NG use will decrease.

          Utilities place a very high priority on keeping the power on 24/365 and at this time NG is the cheapest backup to build. The cost of NG electricity is mainly fuel cost.

          As for Germany, the coal plants now coming on line are replacing much less efficient plants. Germany will end up with far less coal capacity after the changeover is completed.

          Germany does not have a source for NG and is dependent on Russia for its gas supply. As can be seen from current events putting oneself at the mercy of Russia is not a wise choice.

          • It’s still almost 2/3 fossil fuels, backup power or not. Maybe I’m just frustrated but I think more should be done.
            Building fossil fuel capacity should be something of the past, at least for contries that consider themselves developed.
            Oh well, they say better late than never and I guess it takes time to turn around a big ship. I just hope that such big polluters soon start to show some fossil fuel decrease in total numbers and hopefully a big decrease.

          • I also think more should be done. But I also think more will be done.

            We’re in a transition, a very major transition. While some of us believe that we can provide 100% of all our electricity with renewables many are not convinced.

            Utilities, which must keep the power on, need assurance that if wind and solar don’t provide for extended periods they have sourcing to call on. Natural gas gives then that for an acceptable price.

            Right now storage is expensive. (Or in the case of pump-up, slow to build and harder to permit.) Storing electricity for more than one 24 hour cycle is too expensive to be practical. Storing gas is affordable.

            I think that we’ll develop affordable storage over the next few years. In the meantime I think it far better to use NG as the fill-in source and put no limits on wind and solar installation.

            This is a 20, 30, 40 year changeover that we’re just starting. We’re winning in the US, we’ve pretty much quit building coal plants and we’re shutting around 60 down in the next couple of years.

            We’re filling for those coal plants with a mixture of renewables and NG. As the price of wind and solar continue to fall NG will get used less and less. And as storage develops NG will get shoved more and more into the background.

            Take a look at the relationship between price of solar and amount installed per year. It looks to me that we’re going to be installing a lot of solar over the coming years. And since demand is not growing, even dropping, that means fossil fuels are going to be used less.

  • That’s great. One would trade jobs in manufacturing for jobs in “retail”, “personal services” and “museums”. Only a group like this would think that is a good idea. Just another tax that falls on the working poor; won’t bother Brad Pitt.

    California employment has been flatlined at about 16 million for over 10 years. Presuming that adding another tax to an already heavily taxed state would increase employment doesn’t pass the Red Face test.

  • And who pays for it all? you guessed it, the consumer. Who does the government tax for revenue when no more carbon is produced? You guessed it again, you do.
    And how do you rein in government spending after this windfall is gone? Maybe you can follow Californias example on spending.
    I am sorry, but I do not see corporate taxation as a solution. Incentives, on the other hand do not need to be counter productive. The best incentive of all is to bring the cost of alternatives down, and I don’t see rebates as being a cost effective incentive. Money needs to be spent on research. Guaranteed loans need to be available to start up companies with promising technology.
    I think it is already proven,that alternatives can be competative with fossil fuels. It is the start up and the saturation of the market that is slow and requires huge capital outlays. What possible good does it do to tax money away from corporations that are in the best position to provide this start up capital.
    If you want to take dollars away from fossil fuel then tax the end user to reduce demand. At least this is a, fairer. user pay scenario. A good example would be to increase gasoline taxes. Now that suggestion may get me run out of town. Nobody wants to take responsibility for their own actions.
    Norway, an oil exporting nation, has gasoline prices of about 10.00 per gallon.
    I haven’t been in the U.S. for a couple of years, but even California prices were considerably less than half this at that time.
    I was really disappointed to read that SUV and light truck sales are still the mainstay of North American auto sales. I don’t think the message is getting out there.

    • Who will pay the cost of climate change?

      • How the climate will change is unknown. The mystery pause seems to be due to volcanos.
        The climate has so very much momentum, decades of burning trillions of tons of carbon fuel, that what the USA does now may not matter that much, unless we come up with new technology for a cost effective low carbon source for massive quantities of electricity that prices coal and oil sources out of the market.
        I can’t see the developing world forgoing refrigerators and air conditioners to pay for decades of our reckless consumption.
        Power consumption seems to correlate with quality of life in most places.
        If the government would remove regulatory roadblocks to new-generation nuclear and also geo-thermal, this could cut our huge current reliance on fossil fuel a great deal.

        • No, David. The only pause is actually a slowing of troposphere (near Earth atmosphere) warming. The deep oceans have been warming – that’s where most of the heat has been going.

          This may be due to the prolonged La Nina ENSO cycle. Now there are signs that an El Nino is forming and if it does then look for some very high troposphere temperatures. Remember the big El Nino spike back in 1998?

          If you look at the real cost of oil, coal and nuclear (Include taxpayer covered heath costs for coal and oil. The cost of our three oil wars. And insurance/waste storage costs for nuclear) you’ll see that wind and solar are already considerably cheaper.

          Developing countries are leapfrogging coal and going straight to renewables. That’s what they did with cell phones. There’s no reason to install outdated technology, just go for the best. They’ll install wind, solar, hydro and geothermal and they’ll purchase efficient refrigerators, air conditioners and light bulbs. Actually, you’d have a hard time finding an incandescent bulb in Asia now.

          You seem to believe that the government is blocking nuclear with unnecessary regulations. How about you tell us exactly what those unnecessary regulations are? Do you think we should cease requiring checking for earthquake faults? Or stop requiring backup generators? Eliminate security guards? What is it that we could stop requiring in order to make nuclear affordable?

          • David, here’s a graph of global warming. What you’re used to looking at is a graph of atmospheric warming.

            Most global warming is going into our oceans and for some reason a larger percentage has been going into oceans recently.

          • I do agree that the planet is warming due to mankind.
            There is no reliable model of where the climate is going. Mankind is boldly going where no man has gone before, in almost total ignorance.
            Nuclear power hasn’t killed anyone in the USA and less than a 100 people world wide in its entire history. Compare that to the thousands that die yearly due to coal.
            The nuclear waste storage facility cost a lot but was never used. Nuclear waste has been piling up at power plants and has not harmed anyone. The amount of high-level waste is tiny. New generation nuclear plans can burn this waste and actually produce more fuel than they use, or just slightly less depending on the design.
            The new nuclear power plant designs are fail safe, they can’t melt down even with complete power and coolant failure. Even the mother of all meltdowns Chernobyl (Old soviet reactor, power shutdown drill at 2am, everything that could go wrong did) killed only a handful of people. The evacuated areas are doing better ecologically now that the people have left. And,, 2 reactors in the same building stayed operational for years.
            What is your objection to moving forward with the highly promising new reactor designs?
            These reactors are light years ahead of the reactors we are using today.

          • We know roughly what is going to happen as we change the climate.

            Some places are going to get dryer, some places are going to get wetter, and most places are going to get hotter. That will make it harder to grow the food we need. Some of our most productive farmland will become too hot for the crops we grow there now. If we lose the Sierra snow pack we will not be able to irrigate the very productive interior valleys of California.
            Ocean levels are going to rise. We’ll have to build sea walls around our coastal cities and rebuild a lot of our infrastructure (roads, power lines, etc.) further inland. Over time we’ll get crowded into smaller areas.
            Nuclear power has, in fact, killed people in the US. Both by radiation and plant operation. If you look down this page you can see the US radiation deaths. At least two people have been killed during plant operation in the last year.

            It isn’t a coal or nuclear option. We need neither.

            Perhaps you haven’t heard about the leak at our New Mexico waste disposal facility a few days ago?

            I have no objection building a Gen IV reactor or two in order to see if they actually work. But since we haven’t yet answered that question, or found a safe way to deal with radioactive waste, all we can say at this point is that we have no proof that nuclear belongs in our future.

            And there is nothing about Gen IV reactors that would make them financially competitive. There’s nothing in their design that would reduce the cost of nuclear energy by a factor of three.

          • “If you look down this page you can see the US radiation deaths.”

            I can’t find any link.

          • Look again.

            Who you gonna believe – me or your lying eyes?

            (edited and added ;o)

          • I believe that your are quite bias.
            Global warming overall will likely not be as bad as you believe.
            Deaths due to “increased cancer” are very difficult to determine the cause of. I blame pesticides for much of it.
            The natural background radiation in many places is much higher than what is found in nuclear “disaster” areas.
            Nuclear waste is not nearly as unsafe as it is made out to be. High level nuclear waste is burned in reactors as fuel.
            When it comes to the future of solar, I believe you have rose-tinted-glasses on.
            Solar has not provided a major fraction of the power needed to run any country as far as I know.
            Still I am glad you view gen-4 nuclear as a viable recipient of R&D.
            I do view solar as worth R&D funds as well.
            It strikes me as ironic that solar advocates will scoff at the possibility of a 3x reduction in price of nuclear while in the next breath tout the certainty of solar achieving the same price reductions while increasing capacity a thousand fold.
            These are not your fathers reactors, or solar cells.
            Great progress has been made in both but only nuclear has the capacity required now.

          • “It strikes me as ironic that solar advocates will scoff at the
            possibility of a 3x reduction in price of nuclear while in the next
            breath tout the certainty of solar achieving the same price reductions
            while increasing capacity a thousand fold.”

            That’s because solar has done it before, while nuclear hasn’t.

          • Solar does not have the capacity.
            Nuclear does.

          • “Solar does not have the capacity.
            Nuclear does.”

            What do you mean by “capacity”?

            P.S. I’m glad you admit solar has become cheaper with growth while nuclear has become more expensive.

          • Capacity is the ability to power a first world industrial nation.
            Solar is great for small remote areas that don’t have power lines AND require very little power.
            Solar may make sense with smart meters to allow people to feed back into the grid as supplemental power.
            Future solar may make economic sense in some applications.
            Space based solar could be a game changer but it is 10 to 80 years away, and our civilization might not last that long if you believe “Limits to growth a 30 year update”

          • David, as solar grows you will see that you are wrong.

          • “Capacity is the ability to power a first world industrial nation.”

            In other words, a meaningless rhetorical club used to beat down renewables.

          • Look there is a big difference between watts and terawatts. If you told me that the difference between a dollar and a trillion dollars was meaningless rhetoric I would laugh.
            Power your tiny islands in the pacific that no one heard of. I’ve been to Masdar City we need real solutions.
            Stopping nuclear power for 30 years following three mile island was a horrible decision.
            Nuclear power along with natural gas will be what powers our future. Or at lest the future of first world countries.

          • No, David. Nuclear is dying out in North America and Europe.

            Nuclear power in the US stopped prior to TMI. I gave you a link to read up on what happened to the US nuclear industry.

            You’re wearing out your welcome here. If you’d like to talk about clean energy then start talking about clean energy and quit posting stuff that is factually untrue.

          • Bob why are many environmentalist now supporting nuclear power? You never replied to the Wikipedia link I gave you about that when you asked.
            We are now building two new gen four reactors and the Chinese are building four of them.
            You say Wikipedia has bad information. Why don’t you edit Wikipedia? It is easy to register as an editor. Set them straight not me.
            What first world country can supply more than 5% of their power from solar now?

          • “What first world country can supply more than 5% of their power from solar now?”


          • “Look there is a big difference between watts and terawatts. If you told me that the difference between a dollar and a trillion dollars was meaningless rhetoric I would laugh.”

            You’d laugh because you’re an arrogant moron who doesn’t understand that a Trillion $1 bills and a Single $1,000,000,000,000 bill is the same amount of money.

          • David, here is what is happening in the US. Renewables are on the rise and nuclear is sagging.

            Nuclear will be probably be down even more in 2014 as four reactors were shut down last year. Renewables will almost certainly be up. Wind had a slow year in 2013 due to problems with the subsidy program but those are now resolved. Solar looks to be on the way to another record year.

            It’s going to be several years before any new US nuclear can come on line. And we’re likely to see more reactors closing in the meantime. Rumors are out there to the effect that Exelon will be announcing the closure of three of their reactors shortly.

          • Bob based on what is actually generated and what can be generated, I see the new generation 4 reactors as one of the best ways forward. These standardized reactors are safer cheaper and far better than their predecessors. China is building four of them now and I think we are building two.

            There are also a couple of sealed modular reactors being built. These can be a direct swap for coal fired furnaces.

            The greens scared the hell out of everyone and shut down nuclear power in this country for 30 years to the grave detriment of our country.


          • No, we are building AP 1000 which are Gen III reactors which are suppose to be cheaper and quicker to build. So far that has not proven to be true. We will know in a few years.

            China is building a couple of more advanced designs. It’s not clear that things are going well. Remember, new designs are experiments. Even if fans of nuclear are convinced they will work, we know only after they are completed.

            At one time pebble bed reactors were the solution. They failed.

            You are very mistaken about the reason that we stopped building nuclear reactors in the US. The nuclear industry had stalled out before TMI melted down. Why don’t you read an excellent paper on the history of US nuclear?



            Now, this site is about clean tech. It’s not a site for nuclear speculation.

            Why don’t we get back to an appropriate topic?

            The Earth receives approximately 3,850,000 exajoules (EJ) per year. This is more energy in one hour than the world uses in one year.

            We now have affordable ways to turn a portion of that energy into electricity. And we can create that electricity without creating hazardous radioactive waste.

          • Those charts are utterly outdated.

            “Solar power has been promoted by the oil companies to shut down nuclear which poses a real threat to oil.”

            Oil is used for transportation, nuclear is used for electricity.

            If you’re talking about the third-world, they can’t afford nuclear.

          • Fuel oil is used to heat homes as is electricity. We are increasingly moving to natural gas for power. If you are concerned about the environment you should be concerned about fracking’s effects on ground water and natural gas leakage into the atmosphere.
            India and China are building nuclear power plants and they plan to export them as well. We should get on board too.
            If we subsidize green power it should be on a per/Kw basis and let the market decide.
            Register with Wikipedia and set them straight with more current charts.

          • If we ever remove subsidies for coal and nuclear that would be a good time to worry about nuclear subsidies.

            Again, David, why don’t you look for a nuclear site to flog your nuclear interests?

          • No. Economics shut down nuclear power in the US for 30 years. Nobody is willing to finance nuclear unless the Government guarantees the loans. That should tell you something about the economics of the situation.

          • You’re entitled to your opinion about climate change. Personally I’m going with the opinion of the experts in the area and their data has shown that we are heading for a world of hurt.

            You’re not entitled to your own facts, however. We aren’t burning spent fuel in reactors in the US. The UK shut down their breeder reactor. Japan just decided to close down the one they were working on. For the most part there is no solution to long term nuclear waste storage. We’re sticking used fuel in ‘dry casks’ which will have to be replaced every 100 years or sooner. That’s not a solution for very dangerous material which will be a danger for thousands of years.

            Nuclear reactors are basically a big ‘furnace’ where heat is generated and a steam plant where that heat is turned into electricity. There’s nothing I can see that will lower the cost of building large steam plants by a factor of three. That would take some mighty magic.

            Solar is now producing 100% of the power for the island of Tokelau in the Pacific. They were paying a very high price for electricity because they had to import diesel for generator. That mean that it paid for them to rush installation.

            The rest of the world is ramping up solar. I’ll give you a graph through 2012 and see if I there’s a 2013 number out yet.

            Compare that to the worldwide number of nuclear reactors.

            Nuclear seems to have run its course.

            I’ll stick in wind as well. I think you’ll be able to see where the world seems to be headed.

          • “For the most part there is no solution to long term nuclear waste storage. We’re sticking used fuel in ‘dry casks’ which will have to be replaced every 100 years or sooner. That’s not a solution for very dangerous material which will be a danger for thousands of years.”

            I wonder how effective a waste burning reactor could be if it was designed solely for burning waste (i.e. no concern for producing more power then it consumes).

          • Seems to me if there was a real solution to nuclear waste we’d be using it.

            We’ve spent billions of dollars looking for solutions and we’re spending tons of money for temporary solutions which aren’t totally working. Hanford is leaking. The New Mexico salt dome is leaking. Dry cask storage is pretty much moving ones garbage to a new bag when the old one starts to fail.

            If there was a workable, affordable solution one would think the nuclear industry would be building it just to get that problem behind them.

          • I think they haven’t been designed because waste burning is considered an “extra” to the primary point of creating electricity.

            If waste burning was considered the primary point of the reactor then it could be powered with wind and solar and just used to eliminate waste.

          • The experts don’t know the details of what climate change will bring. Global climate modling is in it’s infancy.
            “A world of hurt” is not too specific. The current warming of the ocean is of great concern, because we don’t understand its ecosystem well either. I also hate jellyfish.

            Being able to run a small pacific Island on 100% solar will not have much of an impact on Global climate change and is not much to boast about. Now if you said that a real country like France got 80% of its power from solar that would impress me, but France really gets 80% of their power from nuclear. When it comes to Global power required in the future the amount of power required dwarfs what we curently use in the USA by orders of magnitude.
            Bringing up the island of Tokelau in the Pacific, just sounds pathetic.

            Nuclear waste is a scare tactic. Low level secondary waste is not a big problem. High level waste is best burned as fuel in breeder reactors that can actually generate more fuel than they burn, with Zero carbon, and Zero particulate pollution.
            After the old-school-greens scared scientifically illerate people to death with their nuclear waste fantisies, they got us to build Yucca mountain to contain waste for thousand of years. This cost big bucks. As iceing on the cake they never opened it.
            France does a great job with last generation nuclear power.
            We can do a better job with next generation nuclear.
            I hope solar works for real some day.

          • David, you really would benefit by spending some time learning more about both climate change and nuclear energy.

          • Bob, your solar panels do not have the capacity to run an industrial first world country. France does this now with older nuclear technology. New nuclear technology is much better, safer, and cheaper.
            The people living in Chernobyl are healthier than those living in Shanghai.
            Nuclear waste is easily managed. France does not have a problem with it.
            You never answered this,
            Why are so many greens now turning to nuclear power?

          • David, no one suggests running a grid with nothing but solar. That could be done but it would be cheaper to mix in a lot of wind, tidal, hydro and geothermal in order to minimize the amount of storage needed.

            You might want to read the Budischak, et al. paper linked on the right side of the page. In that study they took four years of minute to minute demand from the largest wholesale grid in the US along with hourly wind and solar data and showed how only wind, solar, storage and a very small amount of natural gas could power the grid.

            There are several other studies for other parts of the world. All find that renewables are totally up to the job.

            You are now claiming new nuclear is cheap. Can you back up that claim with some facts?

            France does not have a solution for their nuclear waste. They are encapsulating it in glass while they try to think of a real solution. It’s their version of ‘dry cask’ temporary storage.

            France has acknowledged that they have a upcoming problem with nuclear. Their plants are aging. They are having problems getting young people interested in careers in nuclear industry.

            France is rapidly increasing their renewable installation and planning on closing some of their nuclear plants early.

            Do you have some data showing that ‘greens’ are switching to nuclear? Or is that something you heard somewhere?

          • List of pro-nuclear environmentalists

            Small modular reactor can be mass produced in factories dramatically lowering cost.

            In the early days cars cost a great deal, same with reactors. The answer is to get the best design and then crank them out.

            Generation IV reactors have tremendous potential. They also burn their high level waste. Secondary low level nuclear waste is not a significant threat to the environment.


          • David, one can easily argue that SMRs will be more expensive.

            After spending years and millions of dollars developing SMRs Westinghouse just announced that they see no future for SMRs and have closed down their operations.
            Now, let’s get back to clean technology. If you’d like to discuss the “wonders” of nuclear energy there are places where the true believers gather.

          • “The people living in Chernobyl are healthier than those living in Shanghai.”

            That’s because the people living in Chernobyl are the guards and administrators for the Zone of Alienation.

            They’re limited by law for how long they can stay there before being evacuated for mandatory recovery.

          • Not true, there are many people in Chernobyl that came back to their homes and live there full time for years.
            The background radiation at Chernobyl is lower than the natural background radiation in many parts of the world.
            People are unreasonably afraid of radiation, they don’t even realize that they get a heavy dose of radiation every time they fly on a plane.

          • “The background radiation at Chernobyl is lower than the natural background radiation in many parts of the world.”

            Like where?

          • Seriously, Wikipedia is a general first stop for information. If you guys keep throwing up obscure websites as authoritative and then saying Wikipedia is not. Then register and edit Wikipedia! People believe Wikipedia because it is peer reviewed.


          • “People believe Wikipedia because it is peer reviewed.”

            You really have no clue what “peer reviewed” means, do you?

            P.S. The locations and the numbers please.

  • We’re paying for it now.Just not in an obvious,direct manner.I don’t understand the automatic objection to a carbon tax on the grounds that it will just encourage more governmental spending,that California is overtaxed now,etc.This study actually modeled an option of ATB-across the board reduction of Calif.taxes and found that option would produce greater jobs and savings.If you want to be a small government anti-tax conservative,fine.(one wonders if this is counterproductive in terms of maintaining infrastructure,education,basic sciences,etc,but fine.)But tell me why you think our current tax system of taxing payroll,income,and investment is the ultimate best solution going forward.And investing in research while we twiddle our thumbs and build KXL?We don’t need to.The numbers work now for anyone willing to make an investment that will pay for itself in 10-15 years.But,if you start at $10 per ton of CO2,know that over the next 20 years it will increase $10 per year,you’ll see residential solar,house retrofits,plugin hybrids,ev cars,solar gardens,business retrofits,skyrocket.And Arizona,Nevada,New Mexico,and Texas will be asking themselves,how come all the renewable research and jobs are in California?What’s more annoying is that California is big enough to do it by itself.The Northeast and New York aren’t that big,and think of each other state a little bit like than Tom Lehrer song.remember the brotherhood song?

  • Don’t worry guys, since nuclear fusion is confidently expected in, um, the “next few decades”. 🙂

    • Well, we have indirect fusion right now.

      After all, what powers the sun?

      • Gee Libertarian, I thought the Sun was a hot rock burning like an ember in a fire.

        • Come on, it’s a guy riding his golden chariot across the sky.

          • With a fire-hot rock. 🙂

          • Playing some Stevie Ray Vaughan while zooming through the air?


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