[tgsovlerkhgsel]

One of the reasons to tax CO2 specifically instead of some other tax (e.g. income tax) is that it pushes alternatives.

If there is a CO2-heavy option that's 10% cheaper than the "green" option, introducing the tax will suddenly make the "green" option the cheaper one.

This could be using an electric truck to get food to the store, it could be using a heat pump instead of an oil furnace, it could be the locally grown potatoes instead of potatoes that were trucked over a long distance from a place with cheaper labor, etc.

Most of the savings won't happen because the millionaire flies less, they will be made because someone, somewhere along the supply chain makes a different decision because the environmentally friendlier thing is now cheaper. That's the beauty of it - it's about fixing the emissions where the best effect can be achieved with the smallest investment, not about taking away people's ability to consume and live an enjoyable life.

[b9a2cab5]

The question is, how do you determine what the CO2 consumption of something is? Do you include only direct emissions? What about emissions incurred during manufacturing (e.g. for lithium batteries for electric trucks)? The idea seems cool but the execution seems impossible. If you tax only direct emissions you motivate companies to amortize emissions by concentrating them during manufacture. If you tax everything, how do you even begin to count everything that goes into a tomato or loaf of bread?

[ericd]

You tax carbon when it’s added to the carbon cycle, you refund when carbon is verifiably removed from the carbon cycle. The price of all carbon-intensive domestic inputs go up as a result. If something was manufactured abroad without certified paid-for carbon with a process that matches international standards, then a punitive worst-case estimate is applied upon import as a tariff, such that it’s always cheaper to get certified.

[tgsovlerkhgsel]

Within a country/economic bloc, it's easy: You tax it where it is emitted, starting with the biggest emitting processes first. Anything fuel burning can be taxed via the fuel, very accurately. Stuff like concrete production is harder to tax, but still doable. Hard to measure emissions like methane leaking out from gas wells or cow burps is the hardest to tax accurately, but even if you don't get 100%, it's a good start.

Smaller processes that produce CO2 through actual emissions will probably fall through the gaps, but they're not critical in the big picture. Most will be covered through taxes on the fuel or energy. I'd expect most of the electric truck battery emissions to come from energy, either during the assembly of the cells or production of the ingredients.

> If you tax only direct emissions you motivate companies to amortize emissions by concentrating them during manufacture.

I do not understand. Indirect emissions are direct emissions at some point, and that's where they get taxed. The cost then gets passed along, creating an incentive to either buy from a supplier that can produce the same thing more cheaply by reducing emissions, or finding a substitute product that's cheaper because it's less emissions-intensive to make.

The real problem is imports from countries that do not follow an equivalent tax regime. I suppose here approximations will be necessary, and by making them overly generous, other countries have an incentive to join the scheme.

[b9a2cab5]

Okay, so you have a train carrying 100 shipping containers of varying goods. These goods might have very different densities, weights, and values. Do you tax by weight? But the CO2 is proportional to distance and weight in this case. Do you tax by distance? Some combination of both? Is that combination an accurate representation of the actual CO2 emitted from the transport of each good?

What if it's a giant shipping boat with thousands of containers?

[tgsovlerkhgsel]

It's almost as purjolok said, but actually even simpler. You don't bother taxing the goods, and not even the train company!

The diesel fuel that the train company will buy has already been taxed at the refinery (if it's a diesel train). The gas that the power company will burn to generate power for an electric train has been taxed at import. The train company will simply pay the price of these goods, tax included, and pass this cost on to the owners of the goods being shipped. How is up to them.

Likewise, the "hidden" emissions from the production of the train are likewise "hidden" in its price: The steel that the train was made from was already taxed when it left the steel mill (not 100% familiar with steelmaking, but this may be one of the cases where it's insufficient to just tax the inputs since the steel mill might emit GHG that don't just come from fuel). The cost of the energy used in processing that steel already contained the cost of the emissions tax that was initially levied on the fuel. etc.

[purjolok]

You tax the operator of the train or ship. They will presumably pass on this cost to their customers as they do with any other fixed cost such as boat maintenance, crew salaries, port fees etc.

[tgsovlerkhgsel]

The beauty is, you don't even have to tax the operator directly, as long as the train is traveling between countries participating in the same scheme. The fuel (or power) the train uses has already been taxed, as has the production of the train itself.

[emteycz]

Most of the hairy parts of taxation come from interaction with foreign systems.

[ClumsyPilot]

"What if it's a giant shipping boat with thousands of containers?"

Firstly, what kind of excuse is this - imagine the same argument applied to social networks, should they just leave child porn on their websites because it too difficult to keep track of? What if a social network has billions of photos? Business has to follow the law, just like I do.

Secondly, we have armies of people collecting data on these containers and doing data science to manage and optimise supply chains, and they have the containers, their weights and contents documented for customs, to make sure they are safe and not overloaded, for insurance purposes, so they can be delivered to the right customer, many containers are independently GPS tagged, etc.

All this data already exists for every major carrier, haulage, etc. The hard part is like one guy delivering donuts part-time, but we don't need to go after that.

[leereeves]

Indirect emissions are direct emissions somewhere, but probably somewhere else under a different tax regime.

That electric car battery might be manufactured in China using coal power and shipped over the ocean in a diesel fueled ship and yet pay no tax, making an American-manufactured battery even less competitive.

[tgsovlerkhgsel]

This is addressed in the last paragraph. (Import duties based on generous estimates, if the import is from a country that doesn't apply an equivalent model.)

[Karrot_Kream]

Tax the source. Apply the tax to every coal mine, oil well, managed forest, or any other material that has embodied carbon. These companies will do what they always do, raise prices and pass them on. This trickle down effect should ideally work their way through the economy and incentivize using fewer carbon-emitting sources.

Of course there is the question about people that simply _store_ carbon, e.g. what if there's a coal mine where the buyers of the coal don't actually use the coal for its energy purposes but instead for, say, makeup creation, or wood for building? We would probably have to work out special licensing for non-usage purposes and that's where it would probably get tricky.