Hi, I have been thinking about carbon tax recently and wondered if it would even make a significant contribution to decrease of CO2? Of course people are price sensitive and if something costs more, it tends to be less used. But only up to a point. Elasticity is not limitless. I have a concrete example: our water consumption is 88,7 liter/personday (compared to 361,66liters for american person day or 170 liter/personday here in 1990), low flow showerheads, dual flush toilets and other stuff since forever.... When I look at the inflation, the price of water has increased by tenfold since 1990. It used to be 1.5CZK per m^3 (1990), now is 48.30CZK, adjust for inflation and you get roughly tenfold increase in price, but only halving of consumption (because you need water, it's essential). The red line is price, the blue columns are consumption. Ok, let's look at the price of the carbon tax for transportation, which is also essential for modern life. I think average car here drives ~13k km/year. Not sure about average consumption, but it is low, for same reason as the water example (e.g. our car has a real life consumption 5.1 liter/100km or 46 MPG and when I asked around, I am more or less norm). 1 liter of petrol should produce roughly 2392g CO2, so 13000km / 100 km * 5.1 liter * 2.392 kg CO2 will give me 1 585 kg of CO2 per average car per year. How much would we pay in carbon tax(=what is politically possible)? Wikipedia says notbody is sure. The highest one in the world is in Sweden (rather rich country): USD168/tCO2 , so let's go with this one. Liter of petrol costs USD 1.47, so (USD 1.47 * 5.1 / 100) = USD 0,07497 per km is price of a fuel. The tax would be USD 0,02048 per km (1.585 tCO2 * USD168/tCO2 / 13000 km), in other words 27% increase. just to reiterate, this is the highest tax in the world, the rest (=much more likely amount) is ~USD40/tCO2, such sum would be 6.5% increase. Nearly 30% increase is very substantial, but we had such prices here already. We could use LPG or NG cars which are taxed at considerably smaller rate, yet they are very rare (1-3% of all cars). However, this increase is on top of already very high fuel taxes, which could be counted as a form of goods-specific CO2 tax. These fuel taxes are even higher than hypothetical calculated CO2 tax and they are here since forever. Yet we still drive petrol cars, not LPG or NG cars (which are cheaper). If batteries were not sufficiently advanced, no amount of (politically viable) taxes would be enough to move us off the oil. After all, the fuel tax has been here for decades and no electric cars appeared for decades, despite obvious economic advantage. Sweden started their CO2 tax in 1991, their CO2 emissions decreased from 6tCO2/capita to 4.5tCO2/capita (2014), 25% decrease. In UK (that has only fuel tax, at least according to Wikipedia), it decreased from 10tCO2/capita to 6.5tCO2/capita, 35% decrease. In Czechia (no carbon tax, only fuel tax) it decreased from 13.5 tCO2/capita to 9tCO2/capita (2014), 33% decrease. It obviously must have some effect, but I looked at other countries in Europe and it doesn't look like very high carbon tax in Sweden has somehow dramatic effect that would enable casual observer to distinguish CO2 emission decreases of Sweden or Norway from other countries that don't have carbon tax. What will save won't be taxes, but same thing that saved our species since forever: technology and progress. I would like to thank Tesla and Nissan for staring the transformation nearly a decade ago. All these dances in politics, about carbon tax, cap&trade and similar trading schemes... I don't think it matters very much. It might help, but at prices that are politically feasible, they won't help much.