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Taxes on gasoline and diesel fuel taxes are obvious forms of carbon taxation. Consider experience in developed nations.

Motor fuel taxes (u.s. $ per gallon) (2012)
U.K. $3.75
Czech $2.70
Germany $2.60
Sweden $2.53} x̅ = $2.53
Netherlands $2.34
Italy $2.34
France $2.33
Austria $1.97
U.S. Federal 28 Cents per gallon
States (varies: 10 cents – 30 cents)

The average tax was $2.53 per gallon, compared to a U.S. federal tax of only 28 cents and 38 cents in some states and 48 cents in others. The combined U.S. taxes do not begin to cover the costs of maintenance and repair of roads.

European rates are about 4 times higher than U.S. and 10 times higher than Venezuelan rates. The typical U.S. rate combining Federal plus state tax is 65 cents per gallon.

By any measure, U.S. taxes on vehicle fuels are well below the marginal cost of road use a clear violation of the economist’s condition for efficiency in resource allocation. We have seen in Chapter 17 that the resulting costs of wear and tear on roads can be very high.

In any case, the U.S. could contribute notably to efforts to reduce global warming simply by raising gasoline and diesel fuel taxes high enough just to cover the mc of road and highway use by vehicles.

4. cap and trade systems

Cap and Trade systems attempt to place a price on global emissions of carbon, a major contributor to global warming. Ideally, such systems work in the following fashion:

A cap and trade system imposes strict quantitative limits (caps) on emissions from industry or agriculture. Then permits are granted for emissions. A market is created wherein the permits can be sold by those who emit less and purchased by those who emit more. How is this done? The sequence for implementing a system is as follows:

  1. Government first establishes a limit on the amount of CO 2 released by industry.
  2. Then, governments issue a fixed number of emission permits,
  3. Ideally, these permits are then auctioned (or given away) by the governments.
  4. Firms are allowed to sell excess permits that they do not need.

This system, it is hoped, will allow market forces to then distribute and price emission allowances. One or another form of Cap and Trade systems have already been introduced in the EU, the U.S. State of California, and China.

The European Cap and Trade system has, to date, been executed poorly. There, the carbon trade market is grossly oversupplied because the EU gave away to many credits. By November 2014, carbon permits traded for less than $8.00 per metric ton, and Europe was in that year burning more coal than before the Kyoto agreement of 1997. This experience does not at all mean we should ignore this tool. It means that the European mistakes must be avoided.

As the caps decrease year by year, the permits become more valuable (unless the government increases them).

Firms producing products that led to CO 2 emissions bid for these in the market. The price goes up. Emissions of CO 2 become increasingly more expensive. So firms are given incentives to reduce emissions, either through new technological innovations, or cut-backs in production that causes emissions.

Questions & Answers

what is Nano technology ?
Bob Reply
write examples of Nano molecule?
The nanotechnology is as new science, to scale nanometric
nanotechnology is the study, desing, synthesis, manipulation and application of materials and functional systems through control of matter at nanoscale
Is there any normative that regulates the use of silver nanoparticles?
Damian Reply
what king of growth are you checking .?
What fields keep nano created devices from performing or assimulating ? Magnetic fields ? Are do they assimilate ?
Stoney Reply
why we need to study biomolecules, molecular biology in nanotechnology?
Adin Reply
yes I'm doing my masters in nanotechnology, we are being studying all these domains as well..
what school?
biomolecules are e building blocks of every organics and inorganic materials.
anyone know any internet site where one can find nanotechnology papers?
Damian Reply
sciencedirect big data base
Introduction about quantum dots in nanotechnology
Praveena Reply
what does nano mean?
Anassong Reply
nano basically means 10^(-9). nanometer is a unit to measure length.
do you think it's worthwhile in the long term to study the effects and possibilities of nanotechnology on viral treatment?
Damian Reply
absolutely yes
how to know photocatalytic properties of tio2 nanoparticles...what to do now
Akash Reply
it is a goid question and i want to know the answer as well
characteristics of micro business
for teaching engĺish at school how nano technology help us
Do somebody tell me a best nano engineering book for beginners?
s. Reply
there is no specific books for beginners but there is book called principle of nanotechnology
what is fullerene does it is used to make bukky balls
Devang Reply
are you nano engineer ?
fullerene is a bucky ball aka Carbon 60 molecule. It was name by the architect Fuller. He design the geodesic dome. it resembles a soccer ball.
what is the actual application of fullerenes nowadays?
That is a great question Damian. best way to answer that question is to Google it. there are hundreds of applications for buck minister fullerenes, from medical to aerospace. you can also find plenty of research papers that will give you great detail on the potential applications of fullerenes.
what is the Synthesis, properties,and applications of carbon nano chemistry
Abhijith Reply
Mostly, they use nano carbon for electronics and for materials to be strengthened.
is Bucky paper clear?
carbon nanotubes has various application in fuel cells membrane, current research on cancer drug,and in electronics MEMS and NEMS etc
so some one know about replacing silicon atom with phosphorous in semiconductors device?
s. Reply
Yeah, it is a pain to say the least. You basically have to heat the substarte up to around 1000 degrees celcius then pass phosphene gas over top of it, which is explosive and toxic by the way, under very low pressure.
Do you know which machine is used to that process?
how to fabricate graphene ink ?
for screen printed electrodes ?
What is lattice structure?
s. Reply
of graphene you mean?
or in general
in general
Graphene has a hexagonal structure
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Source:  OpenStax, Economic development for the 21st century. OpenStax CNX. Jun 05, 2015 Download for free at http://legacy.cnx.org/content/col11747/1.12
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