Elon Musk – a Robust Carbon Tax would Speed the Clean Energy Transition

Guest essay by Eric Worrall

Elon Musk, the renewable energy entrepreneur, has given a speech in which he claims that a robust carbon tax would grossly enlarge his profits speed the global transition to clean energy.

According to The Guardian;

Innovator tells Sorbonne students that failing to price in damage done by carbon pollution is a $5.3tn a year subsidy for the fossil fuel industry

Addressing students at the Sorbonne University on the sidelines of the Paris climate summit, the electric car, Powerwall battery and space tycoon said the obvious solution to runaway global warming was to remove the effective subsidy of not pricing the damage done by carbon pollution, urging the students to campaign and lobby governments to implement the policy.

“To make it neither a left nor right issue we should make it a revenue-neutral carbon tax – increasing carbon tax and reducing tax in other areas like consumption taxes or VAT and in order to give companies time to react it should be a phased in approach,” he said.

“If countries agree to a carbon tax and it’s real and it’s not super watered down and weak we could see a transition [to clean energy] that has a 15- to 20-year timeframe as opposed to a 40- or 50-year timeframe, we could probably cut it in half and that would have a huge impact on the … welfare of the world … it really matters where we do this transition sooner or later.”

“For developing economies, they could leapfrog the fossil fuel situation with power lines, you could have remote villages with solar panels and a battery pack. Just like mobile phones – a lot of countries just didn’t do the landlines, they skipped right over landlines.”

Read more: http://www.theguardian.com/environment/2015/dec/03/elon-musk-says-robust-carbon-tax-would-speed-global-clean-energy-transition

The problem with the “skipping over” theory is it completely ignores the reality of poverty. Poor countries in Africa and elsewhere are struggling to afford what Musk claims is a “subsidised” price for fossil fuel electricity, let alone paying high upfront costs for renewables.

Worse, when energy needs change, heavy dependence on renewables, to the exclusion of other sources of energy, can throttle economic growth.

For example, WUWT recently reported how Zambia is struggling to balance soaring demand for energy from mining companies, energy which is mostly sourced from renewable hydro schemes, with the need to supply water for irrigation and drinking. The obvious solution is for Zambia to use their resources revenue to build a few cheap coal generators, to provide their mining boom with all the energy it needs to flourish, without ruining local farmers. But this solution would be unavailable to Zambia, if Elon Musk has his way.

I love what Musk has done for the space race. I even once wrote a positive article about Musk’s solar business. But to try to bar poor people from access to cheap fossil fuels with a global carbon tax, to condemn them to continued brutal poverty, to palm them off with low intensity local energy solutions, which prevent poor people from experiencing real economic development – in my view, that would just be wrong.