Global carbon surcharge for the reduction of anthropogenic emission of carbon dioxide

Abstract

In our thought experiment we formulate and discuss a novel approach, the Global Carbon Surcharge (GCS), that mimics a carbon tax but does not require tax collection by governments. We define GCS as a requirement or a voluntary commitment encompassing all companies extracting carbon-carrying raw materials, namely coal, oil, gas and limestone, with the aim to burden their extraction with costs proportional to their carbon intensity. GCS mandates all companies to store these materials immediately after mining for a given period of time in the vicinity of the production site. Thereby, GCS generates additional costs that propagate through all sectors of the global economy. We elucidate how the investment costs for the storage infrastructure translate into surcharges on the raw materials.