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To: Maurice Winn who wrote (22187)	9/10/2007 7:52:28 AM
From: Moominoid	Respond to of 218232

Yes I favor carbon taxes replacing many existing taxes (and cutting the total tax burden). Yes, you need carbon credits for sequestration - that makes things more complex. The carbon tax can be applied at source to fossil fuel producers and importers and only a few taxpayers will need to be dealt with. But sequestration could greatly increase the regulatory burden if lots of small players get involved. Tradeable permits have theoretical attractions but the way they are implemented in the real world is bad. Giving them away to existing polluters for free generates no revenue to allow us to cut taxes and increases distortions in the economy and barriers to entry to new competitors (which is why industry generally likes this). And as implemented in Europe - only certain sectors are required to have permits which introduces further distortions. The permits should be required to extract or import fossil fuel not for emissions. Again you would need to be able to originate permits for sequestration. So I have now come round to favoring a tax and then as you say tarriffs can be applied to imports to stop carbon leakage.