> [status quo pays] That's completely sufficient. If the tax is high enough then the "status quo" will change in months, because it'll be trivial for new or ex

> [status quo pays] That's completely sufficient. If the tax is high enough then the "status quo" will change in months, because it'll be trivial for new or existing market participants to offer cheaper alternatives. And this gives the equation for calculating the minimum carbon tax rate. It has to be high enough that it covers the in/efficiency premium and the overhead costs (R&D, marketing, approval, implementation/construction, distribution, upkeep). We already see this in case of coal plants. Coal was cheaper, but as the natural gas infrastructure expanded, gas turbines became more efficient, oil/gas price have fallen a lot and emission standards became stricter, and now it just doesn't make sense to even keep existing coal plants online. Because upkeep is high and they are so dirty. Now the next step is to push out oil/gas plants, but first put carbon capture on the smokestacks. Since carbon capture basically "doubles" the cost of electricity it makes sense to have a tax that is higher than that so power plants will opt to install carbon capture. And so similarly we can calculate for transportation, space heating.