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Overall, This is an elaborate version of revenue recycling; very complicated requirement for implementation via DOE. DOE would have to assess if they're making the right investments to qualify, something that would be very difficult to figure out. Also difficult to ensure equitability. Seems like the proposal would lead to all kinds of mergers and incentives we can't appreciate in terms of how people organize their business and reap benefits. The political feasibility would likely suffer as a result.
1. While this proposal recognizes importance of fossil industry interests and transition, it goes too far and ignores consumer impacts, as if it is not consumers who will pay increased fees or taxes. Discussing consumer impacts is important if this proposal is to advance into the final round. In terms of workability, each energy company is different and structured differently. Assumption that every fossil company would like to diversify into low carbon fuels is dubious. This assumption therefore needs to be justified from the literature, media, or other sources.
2. This is intriguing, but ultimately an underdeveloped idea. A serious concern is that this would devolve into windfall profits for companies as they pass on the carbon tax to consumers, but then capture the profits. What regulatory/enforcement mechanism will ensure that these companies don't capture windfall profits? Need to expand more details on this issue.
3. I like this proposal; well-researched, thorough and pragmatic (i.e. focus on the fossil fuel companies primarily over the public). Major outstanding question surrounds enforcing a fossil fuel company's investment in renewable/alternative energy sources. In other words, how will the government/regulator ensure that these companies are investing carbon revenue in alternative energy R&D? More generally, who will monitor/punish firm activity, a new organization or an existing one? More details here will be important for advancing to final round.
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