Reduce health costs associated with air pollution. Several states have begun studying the proposed effects of carbon taxes on state energy use and on their economies. Minnesota has ordered a study by its Department of Public Service of a carbon tax. Energy Environmental Program, Royal Institute of of International Affairs. Has done some groundbreaking work on global carbon emissions trading systems.
Sustainability is an important, and currently largely unrecognized, goal for energy policy.
Enacting a small tax to support that goal is a way of moving toward a more rational and less environmentally damaging system of energy supply. Phased Incentives for Electricity from Renewables Incorporating external energy costs into state energy decision-making processes is an excellent goal. However, full consideration of externalities generally takes a number of years to accomplish. Meanwhile, a premium could be enacted as a proxy. In addition, modest incentives are appropriate to encourage private developers to enter an unfamiliar regulatory and physical environment which presents an initial business risk.