In 2005, the European Commission decided to launch a carbon tax program where the European government would issue carbon tax credits to be given to industry to encourage CO2 reduction.
These credits are quite expensive and are traded like any other commodity. The current price is $36 per ton of CO2.
A typical refinery in the process of refining gasoline, for example, produces 2 million tons of CO2 per year. This poses an addition tax burden of about $72 million per refinery.
In order to reduce this burden, the refinery may buy or swap tax credits from an industry which hardly produces any CO2, an atomic power plant, for example.
This makes the refinery look good and produces extra income for the nuclear plant, thus encouraging the construction of additional Nuclear Plants.
You may notice that this whole carbon tax swap does nothing to reduce the actual CO2 emission.
A much better way, propagated by BP, the British Petroleum Company, is to buy land and plant trees. Here 22 million tons of CO2 can be absorbed by 4,000 square kilometers (nearly 1 million acres) of woodland.*
Instead of buying land directly, BP is trying to make a deal with the Brazilian government to have it plant more trees and thereby enlarging the rain forest for all of our benefit and, in turn, providing BP with the needed carbon tax credit. Incidentally, the UN has a special committee making sure that nobody cheats.
Thus when BP promises: ''There will be net zero on carbon in BP’s oil and gas production on an absolute basis by 2050 or sooner,'' this does not mean that the future refinery efforts will no longer produce CO2, but rather that by then it will have enough sources of carbon tax credits to offset the CO2 produced in the gas and oil production.
It is hoped that such carbon tax credits could also be used by farmers getting such credits for not harvesting crops and leaving unused land untouched, thus being able to absorb CO2.
There are smaller but similar carbon tax schemes in California and one that links a number of power plants in the Northeast of the U.S.
*Green leaves can absorb about 1 pound of CO2 per square foot area during 1 year through photosynthesis converting CO2 into carbon (food for trees) and oxygen for us to breathe.
Dr. Hans Baumann, a former Corporate Vice President and founder of his company, is a well known inventor, economist, and author having published books on scientific, economic, and historical subjects. He is a member of the American Research Society and an Inductee of the Hall of Fame of Automatic Control, besides also being an honorary member of a number of technical societies. Read Dr. Hans Baumann's Reports — More Here.
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