> The simplest approach, administratively, is to levy the carbon tax “upstream,” where the fewest entities would be subject to it (for instance, suppliers of coal, natural gas processing facilities, and oil refineries).
Include other highly polluting industries with that, and while you may not get 100% coverage, it would definitely cover the majority of carbon intensive products and services and lead to a drastic reduction in emissions.
CCL estimates that the annual administrative cost of a carbon tax in the US would be about $4 to $5 billion per year, which is about 6.8 percent of revenues in year one ($15/ton of CO2e year one, rising by $10/ton each year), but as revenues grow along with the fee, it drops to only about 1.7 percent by year 10.
True, it definitely is trickier, but it can be managed to some degree.
> The Energy Innovation and Carbon Dividend Act has a provision built in to protect trade competitiveness: a ‘Carbon Border Fee Adjustment’ imposed on covered fuels and ‘emissions-intensive trade-exposed’ (EITE) goods that cross our border in either direction. These goods include products like steel, aluminum, cement, glass, certain chemicals, and some agricultural products.
Goods that fall under this EITE classification and are imported from a country that does not have a carbon price equivalent to ours will have to pay a surcharge to make up the difference. Conversely, domestic EITE products exported to any country will get a refund for the carbon fee paid.
Include other highly polluting industries with that, and while you may not get 100% coverage, it would definitely cover the majority of carbon intensive products and services and lead to a drastic reduction in emissions.
CCL estimates that the annual administrative cost of a carbon tax in the US would be about $4 to $5 billion per year, which is about 6.8 percent of revenues in year one ($15/ton of CO2e year one, rising by $10/ton each year), but as revenues grow along with the fee, it drops to only about 1.7 percent by year 10.