Carbon Tax

(1) Policy Definition

Carbon taxes may be introduced in CCEM using a simple tax ($/CO2) on fossil fuel consumption. Carbon taxes are defined at the zone level.

In CCEM, the effect of carbon taxes is to make the energy more expensive, as described in the M2 model.

The amount that is extracted is re-injected into the economy. In previous versions of the model, we tried to direct this money to transition acceleration, but this is not necessarily the best decision, so currently we "let the money circulate". 

(2) What the slider in  G2WS does ?

The slider simply changes the CO2 tax rate set up by a geopolitical zone, which is assumed to grow as global warming pain does.

• Levels between 0 and 100 means that carbon taxes will be triggered by pain, with a coefficient that rises from 0 to maximum value of $1000/ton.

When you change the slider, the control KPI is the yearly average tax rate expressed in $ per ton of CO2.