Monthly Archives: August 2017

Negative Carbon Taxation

Carbon taxes are basically the perfect policy. Set a desired maximum level of carbon output, estimate the tax needed to get to that level, and levy it. Adjust as needed to keep at target level, which should itself be gradually declining. That’s all pretty standard.

A thought occurred to me today that a nice improvement would be to include a “negative carbon tax” in the package. The idea would be to make adding carbon to the atmosphere and taking carbon out of the atmosphere equivalent. Whatever amount you would have to pay for emitting a certain amount of carbon, you’d receive for taking that amount of carbon out of the atmosphere. So if you see an opportunity to remove carbon from the atmosphere, you’d have an incentive to take it and get paid. And indeed, a whole carbon capture industry could come into being, effectively getting paid by the government to remove carbon from the atmosphere on whatever scale they can manage. This could of course be paid for by the carbon tax, which would by definition be plenty of money as long as more carbon is being emitted than is being removed.

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