A market-based method to deal with warming - letter by Dr. Kenneth Pierce

Reproduced here for fair use and discussion purposes. My comments in bold.
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Dr. Pierce apparently does not understand the concept of free markets, because "putting a fee" on carbon content has nothing to do with the free market. A "fee" (that is, a tax) is a government intervention into the free market, not an activity of the free market. And this particular tax is not for the purpose of generating revenue for the operation of government, it is a manipulation designed to alter peoples' behavior to certain desired outcomes. This is known as social engineering, which is about as far from the free market as one can get.

Citizens' Climate Lobby is an advocacy organization attempting to persuade people to consent to taxing themselves by dangling a carrot called a dividend. This dividend is intended to be given to people to mitigate the impact of the fee. They claim: "A national carbon price, with full revenue return and border adjustments, will do four things: internalize the social cost of carbon-based fuels, rapidly achieve large emission reductions, stimulate the economy & recruit global participation. And it will do so for FREE." Yes, they really believe it is free.

Here's a chart from their website:

Notice they want an escalating tax, obviously intended to become confiscatory at some point, which will be transferred to you and me. This tax will be applied "at the point where they [greenhouse gases] first enter the economy," but each household will receive a dividend from a "trust fund," which supposedly covers the increased cost of goods and services resulting from the tax. 

The point at which carbon enters the economy is not the point where carbon enters the ecosystem. Therefore, it seems that their intent is to tax oil, coal, and gas companies. for that is the only substantial place where carbon enters the economy.  "The fee would start out low — $15 per ton — and gradually increase $10 each year." 

There is an organization called TerraPass which will calculate for you how much tonnage or CO2 you are producing, and they charge you a fee based on that, which they say they will use for carbon mitigation efforts. For example, my 2008 Toyota Rav4, if driven 10,000 miles per year, generates 8889 lbs of CO2 per year. That's about 4 1/2 tons. If that amount of carbon was entering the economy at my behest, I would be charged $67.50. That's one vehicle. 

Let's try to get an idea what this tax would mean to the oil industry. The government says that burning a gallon of gasoline creates about 20 pounds of CO2, and in the U.S. we used 134,506,764,000 gallons in 2013. That is 690,135,280,000 pounds of CO2, or 345,067,640 tons. Just from gasoline. The amount of the tax, just for the first year level, is $5.2 billion. 

According to the International Business Times, U.S. oil company profits were $33.4 billion, only a part of which is gasoline, of course. "Refineries in the United States produced an average of about 12 gallons of diesel fuel and 19 gallons of gasoline from one barrel (42 gallons) of crude oil in 2013." So this means that gasoline is about 45% of a typical 42 gallon barrel of oil. So roughly, $15.3 billion of that profit is from gasoline.

Now we bring in the $5.2 billion tax. This tax, for the first year only, will add 1/3 to the price of a gallon of gas. 

The effect on the economy would be devastating. All in the name of the free market...
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I want to do my part to leave the Earth a better place than I found it, but am haunted that we are not taking adequate steps to reduce climate change. Unchecked, we’ll face floods, drought, and heat leading to disruption of agriculture, expansion of diseases and fires and, ultimately, famine and international conflict.

I am a geologist specializing in the Quaternary (the last 2.6 million years) and study deposits and effects of natural climate change such as glacial moraines, gravel deposits, and soil development. Eight cycles of glacial buildup and retreat have occurred in the last 800,000 years But the Earth is now warming at an unprecedented rate of decades, not thousands or tens of thousands of years.

The physics of burning fossil fuels is clear: The additional carbon dioxide acts like a blanket that warms the Earth. Mile-long coal trains coming through Bozeman show the scale of carbon dioxide we add to the air. More than 100 such trains are filled and emptied in the U.S. daily.

I recently learned about a marketbased way of coping with global warming: placing a fee on the carbon-dioxide content on fossil fuels (coal, oil, gas) as they enter the economy.

Everyone, from businesses to individuals, will be motivated to reduce their carbon footprint. The fee starts small and rises predictably, so that we have time to adjust, and invest, in the new The energy revenue economy would . be returned directly to households on an equal basis, stimulating the economy and creating jobs. The sooner we act, the less deep is the “carbon-dioxide hole” left for our children and their children’s future. Please ask our congressmen to support the Citizens’ Climate Lobby proposal, so that our country and the earth have a chance to be a better place than we found it.

Dr. Kenneth Pierce Bozeman