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Tax to Pay Externalities by Zero Externalities

Please find below the judging results for your proposal.

Semi-Finalist Evaluation

Judges'' comments


As you admit, "mitigation costs would be much harder to assess." Much. That kind of calculation would add complexity when the political imperative is to reduce complexity. Also, I thought the proposal was a solid description of the need for a clear calculation of marginal harm from the next ton of CO2, but then you added this: "To be fair, we should find ways to tax those who have benefited from past pollution." Pricing legacy costs would undercut the economic efficiency argument that I thought you were making.

The idea of a carbon tax that rises over time until emissions are reduced to an acceptable level is commonplace. The author simply posits that such a tax should be enacted. Providing carbon tax revenues to the generators "to pay the cost of reducing and eventually eliminating the carbon emissions" is one possible approach.

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