- CO2 Emissions from a gallon of diesel: 10,180 grams CO2/ gallon
1 ton is a million grams
So one gallon puts out 1/100 ton
A one dollar tax per gallon is 100 dollars a ton
The US already taxes about 50 cents.
I have not seen he report, John Whitehead is trying to find it/. But, without reading it, I can tell that returns to scale are not constant in this case. A lot of the gas taxes become substitutes for other taxes which implicitly drop. It is very hard to measure this effect, it is like trying to separate Jerry's CO2 tax on gas with his equivalent pension tax. With the two dueling state government requirements, there is no real measure of how government handles the internal flow.
For example, we see above that just a first order estimate means doubling gas taxes, and that seems unlikely to stop CO2 build up. So the authors have to factor that out, already, the tax substitution effect, just to get the marginal elasticity of CO2. Very difficult.
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