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The fact that CA is charging $0.1 per gallon does not mean you're actually paying the true carbon cost of the gasoline. You're paying a tax based on an arbitrar
by matthewdgreen 5y ago
The fact that CA is charging $0.1 per gallon does not mean you're actually paying the true carbon cost of the gasoline. You're paying a tax based on an arbitrary cap that was set by politicians, and one that may change dramatically in the future.
- nullc 5y ago$0.1 is the price of for carbon offsets. 1 Gallon gas = 20lbs CO2, and going rate for carbon offsets are $10/ton. Due to how CA cap/trade works I can't directly figure out the marginal cost difference there, though it looks greater than the market offset rate (as you note these rates depend on caps). Obviously I don't think that offset capture the total externality, but if a comparison is to be made some figure is needed. Even our 'green energy' figures don't capture their own substantial carbon footprint entirely.