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Carbon Taxing

Should we tax Carbon or not?

There is all the hype running around with renewables will be the future, major energy would be generated from renewables, the oil is running out, Electric vehicles will run the future and many more, this hype has been running since more than a decade. But we hardly see much happening. Why?

Picture : Grist

Solar and fuel cell is what I believe, that will become more affordable in the near future, they will provide a large chunk of our energy hunger. But till then the growth is slower than expected. There has been investments happening in the renewable sector, but who's paying for that? In major Europe the ROI (Return On Investment) is through the end consumers, the electricity bills are rising, cleaner the energy more the expensive. Hence there is not much investment in renewables right now.

But is this enough, fast enough? We are almost there, a point of no return. Though renewables is a fairy dream, it's pretty far and we don't have that much time to spare. Instead why can not Carbon be taxed?

What we need to do is increase investments in clean energy sources as well as reduce investments in fossil fuels. The taxing of carbon could also lead to new business models particularly in the underserved building efficiency segment and services that can provide energy efficient solutions. Rather than having costs bourne because of Solar and other expensive renewables, we could tax dirty energy, right now coal and oil are pretty cheap and taxing them would make more sense, people would automatically without a second thought move towards cheaper source. We are addicted to dirty and cheap energy, that is what our target should be.

On the other side, there are huge investments still taking place in fossil fuels across the world. India, for instance, plans to open 50GW of new coal generation in the next years and there are massive investments taking place every day into oil and gas noting that the oil and gas Majors are some of the biggest and best financed companies in the world. Imagine how much coal Indian railways is carrying day in and day out. And they are investing 100s of billions of dollars every year into oil and gas and they are doing so because they are making money doing it. The ROI is enormous and fast in these. Hence economic point of view not much is being invested. And yes some oil & gas companies such as Adani and Total are starting to invest in renewables but their capital expenditures in this area are a fraction of their yearly investments into oil and gas.

The issue is that it is not easy for oil and gas companies to invest in renewables. Renewables is mostly about electricity generation, which is not the core competence of an oil or gas company which means they don’t have the know-how or systems needed to make the necessary investments. Here below is one strategy that we have developed, would definitely like to hear from you.

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