[crazy2be]

I agree in principle, but given the huge proportion of energy which comes from fossil fuels, a carbon tax would have to be huge (and hence unpopular) if it were to match the market competitiveness of subsidies.

That is, to subsidize solar 33% (our current subsidy in the US), you would have to make a carbon tax equivalent to 50% of the current price of fossil fuels, or about $1.50/gal. This is obviously politically untenable in the United States.

The happy medium is probably to do a bit of both, and work toward the middle. Smart, targeted subsidies for carbon-neutral sources, and small, gradually increasing carbon taxes.

[DennisP]

You can get away with a higher carbon tax if you return the money to the population.

In fact, there's a fair amount of popular support for basic income. Meanwhile a leading idea for carbon pricing is a flat fee per ton with the money returned to the population, equal amount per capita, which essentially is a small basic income funded by the carbon tax.

British Columbia has a revenue-neutral carbon tax (in their case by reducing payroll taxes accordingly) and reportedly it's popular. The opposition party ran against it and lost.

[SamPhillips]

Washington State rejected one, unfortunately, one significant downside of the state solution is that some demand can just easily shift to another location. I wonder if there's a scheme where on state will pass it but only have it come into affect if neighboring states do as well.

[DennisP]

A few states' actions wouldn't help much anyway. The real benefit of state carbon pricing was that the fossil industry was starting to come around on a national carbon price, because they'd rather deal with that than a bunch of different state systems.

Between the WA defeat and Trump win, that's probably pushed back a few years.