Carbon Tax
A fee levied on fossil fuel producers or users based on the CO2 emissions of their fuel. Sets a direct price signal without capping total emissions. Not currently implemented at US federal level.
Why It Matters
A carbon tax would increase fossil electricity costs, improving the economics of solar, batteries, heat pumps, and EVs. Several bills have been proposed in Congress.
Related Terms
Social Cost of Carbon
An estimate of the economic damage from emitting one additional ton of CO2, including impacts on agriculture, health, property, and ecosystems. The EPA estimate is approximately $51 per ton (2020 dollars).
Emissions Factor
The amount of CO₂ (or CO₂ equivalent) emitted per unit of electricity generated, typically in lbs CO₂/kWh or kg CO₂/MWh. It varies by region based on the generation mix.
Carbon Intensity
The amount of CO2 emissions per unit of electricity generated. Varies by grid mix (coal, gas, renewables).