One oversight I see often in this space, and here, relates to a carbon tax. It is stated that the revenue from a carbon tax can be used to compensate people, especially lower income people, for the increased cost of living resulting from the tax. The fatal problem with this is that in a zero emissions world, there will be no emissions and therefore no carbon tax revenue.
Of course it may be possible to compensate people via other means such as other taxes. But a carbon tax is only required because it is otherwise cheaper to emit carbon. This means costs will go up overall and that there will be a net loss (in the short term at least). There is no free lunch and someone will have to pay.
Excellent post.
One oversight I see often in this space, and here, relates to a carbon tax. It is stated that the revenue from a carbon tax can be used to compensate people, especially lower income people, for the increased cost of living resulting from the tax. The fatal problem with this is that in a zero emissions world, there will be no emissions and therefore no carbon tax revenue.
Of course it may be possible to compensate people via other means such as other taxes. But a carbon tax is only required because it is otherwise cheaper to emit carbon. This means costs will go up overall and that there will be a net loss (in the short term at least). There is no free lunch and someone will have to pay.