The Wall Street Journal's September 12, 2007 story on "cap and trade" vs carbon tax includes a graphic analyzing the cost to Americans of different income levels of a tax on carbon, or an emissions cut of 15 percent. In...
The Wall Street Journal's September 12, 2007 story on "cap and trade" vs carbon tax includes a graphic analyzing the cost to Americans of different income levels of a tax on carbon, or an emissions cut of 15 percent. In typical neoclassical (read: market fundamentalist) economic fashion, the Journal only calculates the costs and not the benefits of accelerating the transition to a clean energy economy. I haven't checked these numbers, which come from CBO and American Enterprise, to see if they're right, but here they are:
Here's a couple of other graphs that help tell the story.
While most Americans say they would pay more in energy to support clean energy...
In California last fall, voters rejected a tax on oil production to pay for clean energy:
Hence the need to have a strategy for dealing with global warming that doesn't depend on making energy more expensive.
Check the electricity price. Typically, electricity in the US goes at about 5 cents a kWh ($50/MWH) wholesale (ranging from over $100/MWH in summer peaks to around $20/MWH in off peak middle America). A $1.63 per kWh addition just does compute with a $28.50 per ton of coal increase. There are about 20 million btu per ton of coal, and electricity takes a bit over 10 MBTU per MWH, which gives roughly a $15 per MWH increase, i.e. a 1.5 cent increase.
My guess is that the units are wrong, and the figure should read 1.63 cents per kWh.
Posted by: MJ at September 18, 2007 4:02 AM