To incentivise the movement from “dirty” carbon-intensive fuels to “clean” low-carbon fuels requires a very strong price signal, whatever pricing system is implemented. That pricing system needs to link the carbon prices to units of energy and not units of carbon – so taxing even the solar energy derived from sunshine, as well as all current and future energy sources – must be part of that mix.
A carbon price attached to fossil fuel usage alone can never provide a sustainable solution to climate change. Why? Because if the Carbon tax is sufficiently punitive to end emissions, that will eventually result in zero revenue with which to pay for the ongoing damage caused by the CO2 we have already produced! A set of prices based on impact and fuel/energy type would be far more effective and extend revenue streams for the centuries to come.
PAL Carbon generates exactly such a scientifically robust Carbon-weighted price across multiple fuel sources – including solar, wind, nuclear and, most importantly, any other fuel type that is yet to be developed.
PAL Carbon is available as a free download from the predictability.ltd.uk website today.
Read more in Chapter 15 – Carbon Intensity Weighting.
PAL provides carbon pricing software, services and business solutions that help financial institutions and public agencies understand, quantify and track their carbon risk exposure.