Elon Musk, CEO of Tesla and SpaceX, revealed that he approached the Biden administration about implementing a carbon tax, and it did not appear that they were really receptive.
Carbon tax
The idea of a carbon tax is simply to charge a carbon tax. It can be implemented in many different ways, including as a direct cost to industries based on the estimated emissions resulting from their operations, or as a consumer-level tax on products known to involve burning fossil fuels.
Elon Musk has been an advocate of the idea for years.
He believes that the market generally works well when prices, which he believes are simply basic information, are accurate.
When it comes to products that emit CO2, prices are not accurate, as they do not reflect the unpredictable externality of carbon emissions in the atmosphere and the oceans, which has a massive impact on the environment and the health of the population.
Some studies estimate this cost in trillions of dollars, which basically amounts to subsidies for burning fossil fuels.
As Musk puts it, if you count that cost in the prices of products that burn fossil fuel, the market will start to make the right decisions.
Elon Musk presses Biden for a carbon tax
In a new interview with Joe Rogan, Musk revealed that he approached the new Biden government about implementing a carbon tax in the United States.
Tesla’s CEO said during the podcast:
I talked to the Biden administration [about implementing a carbon tax] and they said “Well, that seems to be very difficult politically.”
It does not seem that the new government was in agreement with the idea.
Musk added that he told them that he believes a strong commitment to the environment was “at least half the reason they were elected”.
A carbon tax on electricity generated from coal and natural gas, as well as gasoline, would obviously be of great benefit to Tesla, making its solar energy systems and electric vehicles more competitive, but the CEO also noted that it would increase costs at SpaceX.
Musk suggested that the carbon tax be applied at the point of consumption, such as taxes on alcohol and tobacco, especially electricity and gasoline, but he also suggested making it a non-regressive tax so as not to affect the poor.
It is not the first time that Musk has approached the federal government with the idea.
In 2017, it was reported that Musk was pushing for a carbon tax with the then new Trump administration.
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