Would a carbon tax help or hurt the auto industry?
However, things are rarely that simple. For example, would a carbon tax be constant for a given fuel such as gasoline? Or would it be calculated based on the total lifecycle carbon output? Gasoline produced from crude pumped out of the Gulf of Mexico would have much lower life-cycle carbon than crude from Canada's tar sands. Similarly, would electricity be taxed based on whether it comes from coal, natural gas, hydro or solar? Clearly, to get the full benefit of a carbon tax, such granularity is needed to push consumers toward the truly cleaner energy sources. However, it may well be unmanageable because of the vast array of energy sources.
In general, a carbon tax would probably benefit most of the auto industry, although it could put a damper on some of the electric car enthusiasm as electric rates go up. The reality, though, it that it is not likely to be as representative as we'd like it to be.
[Source: Automotive News – sub. req'd | Image: 0x6612390]
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