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Elon Musk asked Biden administration to implement a carbon tax

Elon Musk, CEO of Tesla and SpaceX, revealed that he approached the Biden administration about implementing a carbon tax, and it didn’t sound like they were really receptive.

Carbon tax

The idea of a carbon tax is simply to impose a fee on emitting carbon. It can be implemented in many different ways, including as a direct cost to industries based on the estimated emissions resulting from their operations, or as a tax at the consumer level for products known to involve burning fossil fuels.

Elon Musk has been a proponent of the idea for years.

He believes that the market generally functions properly when the prices, which he believes to simply be information at their core, are accurate.

When it comes to products that emit CO2, the prices are not accurate since they don’t reflect the unpriced externality of emitting carbon into the atmosphere and oceans, which has a massive impact on the environment and health of the population.

Some studies have put that cost in the trillions of dollars, which basically amount to subsidies for burning fossil fuels.

As Musk puts it, if you account for that cost into the prices of products that burn fossil fuel, the market will start making the right decisions.

Elon Musk pushes Biden for a carbon tax

In a new interview with Joe Rogan, Musk revealed that he approached the new Biden administration about implementing a carbon tax in the US.

Tesla’s CEO said during the podcast:

I talked to the Biden administration [about implementing a carbon tax] and they were like “Well, this seems to be too politically difficult.”

It doesn’t sound like the new administration was onboard with the idea.

Musk added that he told them that he believes that a strong commitment to the environment was “at least half the reason they got elected”.

A carbon tax on electricity generated from coal and natural gas as well as gasoline would obviously be a great benefit for Tesla by making its solar power systems and electric vehicles more competitive, but the CEO also noted that it would increase costs at SpaceX.

Musk suggested that the carbon tax be applied at the point of consumption, like taxes on alcohol and tobacco, especially for electricity and gasoline, but he also suggested making it a non-regressive tax so as not to affect low-income people.

It’s not the first time that Musk approached the federal government with the idea.

In 2017, it was reported that Musk was pushing for a carbon tax with the then new Trump administration.

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