Pricing Carbon

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PRICING CARBON….A few days ago I linked to post by Sean Casten about the implied cost of CO2 reduction in the Illinois legislature’s recent deal to subsidize a “clean coal” plant in Taylorville. It came to about $400 per ton of CO2, which is fantastically higher than anyone would pay if it were done openly, rather than as part of a byzantine maze of corporate giveaways.

Sean is back today with another interesting post that looks at the cost of CO2 reduction implied in the hodgepodege of tax credits and loan guarantees that are scattered around the legislative landscape right now. Depending on who you are and what’s on offer, it turns out that your reward for getting a ton of CO2 out of the atmosphere ranges anywhere from $15 to $253. This, of course, is nuts, and Sean asks:

What might a world look like that did provide a consistent policy signal on CO2? One, we would deploy a host of technologies that are cheaper and more diverse than those we currently deploy in the name of CO2 reduction. Two, we would deploy a host of technologies that cannot possibly be contemplated by those who’s knowledge of possibilities is limited to those possibilities we are currently deploying. In other words, all of us.

It’s all well and good to have programs that motivate people to develop and deploy technologies that reduce greenhouse gases, and carbon pricing can be an effective part of a broad regulatory program to do that. But if we’re going to use carbon pricing as part of our toolkit, we’re way better off simply setting a price and letting people figure out for themselves which technologies to develop, rather than having the government pick and choose for us. Not only would that get rid of absurdities like subsidizing ethanol at a higher rate than wind (it ought to be just the opposite), but it would open up the playing field to anyone who can come up with a bright idea for reducing greenhouse gases, not just those who have a big enough lobbying presence to get a break for their particular industry. The result would almost certainly be cheaper and more efficient than a patchwork of targeted tax breaks, and would also promote the development of technologies that no one is even thinking about today. It’s time to start.

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DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily crazy—Mother Jones' journalism is driven by one simple question: Will America move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

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