Environmentally Responsible Energy Pricing, 1993


This paper summarizes a larger research report that explores the full social costs of different energy uses and their implications for pricing the environmental externalities associated with conventional environmental pollution, such as that from lead, particulates, SOX, and ozone to inform the greenhouse warming policy debate. The social costs developed are those implied by a "no regrets" approach to greenhouse warming. The social costs implied often greatly exceed current tax amounts. The midpoint estimates suggest that the price of coal is most out of line with its full social costs. According to the analysis, natural gas is currently overtaxed, and gasoline is appropriately taxed. There is also a substantial range of uncertainty embodied in the no regrets approach.

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