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  • Writer's pictureTom Mast

Pricing of GHG Emissions – Advantages

Updated: Nov 2, 2022

Tom Mast – founder of Solve American Gridlock

A huge advantage of Pricing of Greenhouse Gas Emissions (often called Carbon Pricing) is that it will replace the hundreds of laws and regulations with pricing built into all the goods and services purchased.

A Pricing system is an involuntary and even-handed approach that people can understand and accept. It would be easy to tweak as needed. Everyone will have skin in the game.

In contrast to the present approach where no Pricing plan is used, industries will know exactly what to expect and can make their plans accordingly.

Industries and consumers will be making the thousands of daily decisions needed to control GHGs at the most reasonable cost – without even having to think much about it. The additional price will be more hidden than a sales tax. But, it will motivate reductions in GHG emissions in car purchases, building insulation, foodstuffs, work and home locations, type of home and business heating and air conditioning, all forms of transportation, and most goods and services purchased by families. It will also stimulate innovation and research where they are needed. It will replace the present ready, fire, aim approach to fighting global warming.

Pricing will be set at levels increasing over time. The levels would be designed to effect decreases in the use of GHG-producing substances at a rate calculated by the scientists and economists to control the temperatures increases to realistic amounts set at the beginning. Adjustments can be made to the Pricing in the Plan from time to time as needed. The monies collected by government can be returned to the people as a dividend.

How much would a carbon tax reduce U.S. emissions? The U.S. Energy Information Administration (EIA) found that if the country had set a carbon tax of $25 per ton in 2015 and increased it by 5 percent each year, CO2 emissions would have fallen to 32 percent below 2005 levels by 2030. But new research shows that this may underestimate a carbon price’s true potential.

A good Pricing plan will be more likely to be implemented in many countries due to its simplicity and evenhandedness.


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