Elon Musk’s Vision For A Carbon Tax Is More Likely Now

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Editor’s note: I don’t think anyone in the US is going to implement or push far something with the name “tax” in it, but there will eventually be a concerted push again for carbon pricing of some sort at a high level, perhaps a carbon fee & dividend, which could be packaged as a “Freedom Dividend” or “Peace Dividend” or something. The biggest help in this regard would come from getting two more Democrats — Ossoff and Warnock — elected in the Senate. This is certainly critical for fixing a major, gigantic, enormous externality that distorts the free market, making it a horribly distorted market. Read on for more.


Originally posted on EVANNEX.
By Matt Pressman

Five years ago, Elon Musk was pushing hard for a carbon tax. Since then, however, he’s remained relatively quiet on the matter. According to Matthew DeBord at Business Insider, “the arrival of President-elect Joe Biden’s administration might allow Musk to revive his carbon-tax campaign.”

Tesla CEO Elon Musk at Tesla Battery Day and 2020 Annual Shareholder Meeting. Screenshot by CleanTechnica.

“Musk could find a newly receptive audience to a carbon tax in the Biden White House. The politics could be tricky, as some of the election’s deciding states are closely linked to the carbon-emitting economy: Pennsylvania has a fracking-based oil industry; and Michigan is home to the auto industry,” notes DeBord.

“Now, Biden’s plan to deal with climate change doesn’t call for a carbon tax. (It does include the restoration of a full federal tax credit for electric vehicles — the credit that Tesla could offer customers had been reduced because the company had sold more than 200,000 qualifying vehicles in the US.)”

So, does a carbon tax really make sense? “We need to go from having an untaxed negative externality, which is effectively a hidden carbon subsidy of enormous size,” Musk said in 2015 at the Sorbonne in Paris, calling for world leaders to put a price on pollution.

Highlights from Elon Musk’s speech in 2015 at the Sorbonne in Paris including his rationale for a carbon tax (YouTube: yonseienglish)

Driving a gasoline-powered car is a classic example of an “untaxed negative externality.” Fossil fuel powered cars create emissions that accelerate climate change and cause all kinds of damage, without paying any kind of penalty.

Musk argued this situation was costing $5.3 trillion a year, citing International Monetary Fund (IMF) data. For him, the solution was obvious: “We need to move away from this and have a carbon tax.”

DeBord says a carbon tax could be back on the table as political winds are changing. That said, we’ll have to wait to see how this unfolds contingent on moves by the Biden administration. He says, “How this could all take shape remains to be seen. But for Musk, and maybe for Biden, a carbon tax is back in the picture.”


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Matt Pressman

Matt is all about Tesla. He’s a TSLA investor, and he loves driving the family's Model 3, Model S, and Model X company cars. As co-founder of EVANNEX, a family business specializing in aftermarket Tesla accessories, he’s served as a contributor/editor of Electric Vehicle University (EVU) and the Owning Model S and Getting Ready for Model 3 books. He writes daily about Tesla and you can follow his work on the EVANNEX blog.

Matt Pressman has 332 posts and counting. See all posts by Matt Pressman