> A carbon tax of that nature will kill global growth, and our ability to service debt.

Any discussion of growth and cost has to be industry-specific. Obviously a carbon tax is bad for the oil industry and good for the solar industry -- that's the whole point. But you're assuming it would be bad for everyone else, which isn't actually true.

Consider what happens when you have a cross-subsidy like that. The oil and coal companies have a bunch of known reserves and existing infrastructure -- already explored, already built. When the new policy arrives, suddenly the cost of solar or wind goes from e.g. $.06/KWh to $.04/KWh, meanwhile the total cost of oil or coal-fired power generation goes from $.04/KWh to $.06/KWh -- at the previous market commodity prices. But nobody is going to pay $.06/KWh for oil or coal when they can get solar or wind for $.04/KWh, so if the fossil fuel industry wants to make any use of their existing reserves and existing infrastructure, they have to eat the entire difference out of their profits -- they have to charge $.04/KWh after-tax in order to continue to compete in the market.

So the first question is, should we feel sorry for them? No. If you built a coal-fired power plant in 1945 then you've more than recovered your investment already. If you built or acquired one in 2010, decades after we've known this was a problem, you get what you deserve.

So the initial effect is a transfer of profits from the fossil fuel industry to the non-fossil fuel energy industry, but no actual change in the price of electricity -- after all, it's revenue neutral. The government isn't keeping any of the money.

What happens next is that oil exploration ceases to exist. There is no point in searching for more oil if the pre-tax market price is $10/barrel; it's not profitable. They'll sell the reserves they have for whatever they can get because what else are they going to do with them, but then they're done -- that's the whole idea. Meanwhile there is a huge boom in renewables because all the profits are there now -- all the profits the oil producers would have had are going to install solar panels instead.

So what does that make energy costs look like in ten or twenty years? Well, the two effects mostly cancel out. The existing oil and coal reserves get used up and not replaced, but in the meantime we're building non-fossil alternatives to replace them, using the money we're not paying to the oil producers. It's likely that the price would be slightly higher, because otherwise it's what the market would have done without the tax (though that is actually already happening somewhat because the prices are already pretty close), but the net result isn't a huge price differential because they're countervailing forces.

The major effect is what happens to the people who own the existing oil reserves. But notice that these are predominantly countries we don't really love, like Russia and Saudi Arabia. So the main effect is to transfer wealth from those countries to the local economy where you create jobs installing renewable energy infrastructure, which is an effect that significantly outweighs -- is net economically positive -- against a slight increase in generating costs, for any country that is not a large net oil exporter.

And that's assuming an increase in demand for renewables doesn't bring any economies of scale that could bring the price down below the existing energy market price.