Ending fossil energy in 10 years. Reducing the global energy bill by 50%. Increasing power purchasing parity of the lower 50%.
| Tax CO2 everywhere, starting at U$100 per ton of CO2 equivalent, increasing by U$100 every year. |
| Re-distribute 50% of the tax in cash per capita to the people, build a renewable energy infrastructure with the other 50%. |
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Good for the Planet. Good for the Economy. Good for the People.
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The Global Climate Tax Scheme
- We tax CO2, in every country, at the same rate globally, at the point of final sale (of fuels, gas, coal), like a VAT.
- The climate tax is levied, managed and redistributed at the national level
- The climate tax starts at U$ 100 per ton of CO2 equivalent, increasing by U$100 every year, to give the economy time to adapt
- 50% of the climate tax revenues are directly re-distributed to the people, in cash, equally per person. More than 50% of the population will have more cash in their hands (even accounting for rising costs), boosting local businesses and the economy
- 40% invested in the renewable infrastructure – electricity generation, grids, storage, public transport, and the replacement of fossil-fuelled equipment
- 3% for reforestation, mitigation, and adaption
- 7% in a global fund in support of the lesser developed and most affected countries
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| A global climate tax, 50% re-invested in renewable energy infrastructure (generation, transmission, storage, appliances) generates sufficient revenues to replace all fossil energy demand within 10 years. Given that the markets will react to public policies, this target could potentially be achieved even earlier. |
| The future global energy mix, based on a global climate tax: |
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| “Primary energy consumption” refers to the total energy usage, including losses. Because electric appliances are much more efficient that combustion appliances (e.g. fossil fuel car efficiency grade: 20-25%, EV efficiency grade:80-90%), electrification of the energy will significantly drop primary energy demand. The simulation is based on least-cost technologies, currently wind and solar PV. Future technological developments could potentially increase the share of utility-scale geothermal and tidal/wave electricity generation. |
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| Global GHG emissions under different climate tax levels (starting at U$50/tCO2e, increasing U$50 annually; U$100 increasing U$100 annually; U$200, increasing U$150 annually), and business-as-usual. |
| The pace of the de-carbonisation depends on the level of taxes levied on climate emissions. Simulation of different tax levels and their impacts on energy transition, the economy and the people indicates that an initial tax of U$100/tCO2e in creasing by U$100 every year, seems to be the most promising way, replacing fossil fuels after roughly ten years. |
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| Renewable energy is now cheaper than fossil energy, and rapid deploymenet will make renewable electricity even cheaper. However, introducing a climate tax will lead to higher energy costs for a short period of time before the higher efficiency and lower cost of renewables drives global energy costs down to less than 50% of current energy cost: |
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| Global energy costs as percent of global GNI under different climate tax levels (starting at U$50/tCO2e, increasing U$50 annually; U$100 increasing U$100 annually; U$200, increasing U$150 annually). |
| Setting the climate tax per ton of CO2 too high might have a shock impact on the global economy. The simulation shows that a climate tax at U$100/tCO2, and then increasing the rate by U$100 every year, seems the most feasible climate tax level. |
| However – because the climate tax revenues are directly re-invested into the economy, the overall global economic impact of the tax is positive. The additional investment through building a renewable energy infrastructure and the cash-back going into local economies more than offsets the initial higher energy cost. |
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Rich people consume more than poor people, including services (heating/cooling, road transport, flying) that consume energy. The more a person consumes, the higher the taxes paid. Vice-versa, for poorer people that consume less energy, the tax burden is smaller.
When the tax revenues are re-distributed per capita, nearly 60% of the population will have more disposable income in their hands than before the climate tax – boosting local businesses and the local economy. |
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