Economists are fixated on cap and trade systems to set a price for carbon. That is, someone sets an arbitrary target for carbon emissions then allocates permits that people now trade. While this might work it is not the best most certain solution to the problem. Another solution is to estimate the amount of money that we need to invest in renewable energy then apply a carbon surcharge where the money raised must be spent on renewable energy technologies. This is certain to work. The surcharge needed to reduce emissions to zero within 20 years with existing technologies is estimated at 15% on existing energy. As the tax on energy now approaches or is greater than 50% on some energy a surcharge (not a tax) of 15% applied to reducing greenhouse gases would not greatly affect the economy. The approach is market based but the market is in technologies that reduce carbon emissions not an artificial easily compromised market in carbon permits.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s