Posted on August 03, 2016 by Matt Pressman
At the Gigafactory press event in Nevada last week, Tesla Motors CEO Elon Musk explained, "every oil burning activity is subsidized, dramatically. If you believe there is a value to the CO2 capacity of the atmosphere and oceans and that CO2 capacity is not being paid for by the price at the gas pump... [therefore] fossil fuel burning activity is massively subsidized." Musk goes on to argue that a carbon tax is actually necessary to balance out this “hidden subsidy... [and] if you ask any economist they will tell you that is the obvious thing to do, put the correct price on carbon because we currently have an error in the economy which misprices carbon at zero or something closer to zero. It is a fundamental economic error."
Source: Silicon Valley Business Journal
Musk often cites the International Monetary Fund (IMF) estimates like when he tweeted that it's "worth noting that all gasoline cars are heavily subsidized via oil company tax credits & unpaid public health costs." In that post, he linked to the Guardian who reported on the IMF data: "Fossil fuel companies are benefitting from global subsidies of $5.3tn [that's right trillion]... largely due to polluters not paying the costs imposed on governments by the burning of coal, oil and gas." So how much does that $5.3tn in fossil fuel subsidies work out to per day, hour, minute and second? See below...
Source: The Guardian via the International Monetary Fund (IMF)
Interestingly, clean energy company Tesla Motors [NASDAQ: TSLA] isn't the only one supportive of a carbon tax. Just a few weeks ago, Forbes reported: "ExxonMobil, the world’s largest producer of fossil fuels, is actively lobbying for a carbon tax. Yes, you read that right: Exxon is putting its clout behind a tax on the stuff it sells." What is Exxon's position on this? "A straightforward carbon tax that is revenue-neutral—meaning other taxes should be lowered to offset the impact—is far preferable to the patchwork of current and potential regulations on the state, federal and international levels, according to Exxon spokesman Alan Jeffers."
Source: Business Finance News
If Tesla Motors and Exxon Mobil can both agree on a revenue neutral carbon tax, that certainly says a lot. That said, in order to best understand why climate change matters and, in turn, why a carbon tax is necessary — check out this killer 12-minute summary from Tesla CEO Elon Musk. The video was filmed when Musk spoke to students at The Sorbonne in Paris right before the historic COP21 Climate Change Conference in which 170+ nations signed to reduce carbon emissions below 2°C.
Elon Musk has explained that Tesla Motors is doing its part through the company's actions — as stated in his most recent Master Plan by: "accelerating the advent of sustainable energy, so that we can imagine far into the future and life is still good. That's what 'sustainable' means... we must at some point achieve a sustainable energy economy or we will run out of fossil fuels to burn and civilization will collapse. Given that we must get off fossil fuels anyway and that virtually all scientists agree that dramatically increasing atmospheric and oceanic carbon levels is insane, the faster we achieve sustainability, the better."
Source: Alba Energy
As forecasted back in 2006 in Musk's first Master Plan, Tesla and SolarCity will join forces together in order "to expedite the move from a mine-and-burn hydrocarbon economy towards a solar electric economy." That said, a carbon tax will amplify progress and act as a catalyst to accelerate this critical transition. Forbes concludes, "some of the biggest movers and shakers in the market, including Musk and Exxon, now say they want a carbon tax." It's time the world's leaders listen up.