Blog 6_ Carbon Taxes

During the recent General Election campaign, some parties argued for a continuation of carbon taxes, some to freeze them and some to abolish them.

The case for taxes argued that, due to the existential threat from Climate Change, we needed to reduce our emissions particularily from transport and that we could ring fence that money to assist with energy upgrades. The case against counter argued that taxes to date had in fact not reduced emissions at all and that they were little more than an unavoidable cost of living imposition on those who had no public transport alternative and needed to drive for work, school, healthcare, shopping etc.

There is an argument that, at least on a world wide basis, while we will need carbon taxes in the future, applying them now, paradoxically, could impede the net zero transition we all want to see.

The argument starts from a comparison between a fossil machine and a net zero machine, for example, a fossil car and an electric car. The fossil car relies for its energy on liquid or gas from a well proven 100 year old supply chain and can be made with relatively few metals and minerals. The electric car, by comparison, uses a much greater range of metals and minerals and relies on solids for its energy. The key thing here is that all of these solids have to be mined and vast amounts of new mining will be needed for the transition to net zero.

Almost all of mining today takes place largely in the 2nd/3rd world and with fossil machinery, all transport from the mines is by fossil powered trucks, trains, and ships and all refining and downstream forming, working, shaping etc., uses fossil fuels. So the supply chain today from mine to factory relies heavily on fossil fuels. If carbon taxes are leavied now then the extra costs will have to be passed on which will impede the net zero transition.