Energy is fungible and nothing is certain but death and taxes.

All energy is like all other energy and interchangeable through one means or another.  But, all energy is not created equal.  Some energy is better than other energy.  Hot energy is higher quality than cold energy.  The more heat that your energy can make with a smaller package of stuff the higher the
quality.  Nuclear reactions are really high quality stuff and waves on a pond are really low quality stuff.

Now carbon energy is pretty good quality.  You can start up your 10,000 Lb SUV and drive a little way down the street with a beer can full of gasoline.  Even with the 20% efficient heat engine in the truck.  You would have to collect and store days and days worth of pond ripple energy to do the same thing. High quality is much better than low quality if you want useful power out of it.

That is the problem with all the alternative energy schemes and ideas bouncing around now.  It takes huge machines and large pieces or land, or ocean, or air flow to get very much energy out of them.  The scale is the problem.  They do not scale well.

What does that have to do with a carbon tax?  Well, taxes have a scale problem too.  You have to take a little from many people and put it all together to get enough money to do anything with.  This is interesting because it is the same problem as with new proposed non-carbon energy systems.  That tax feature can be used to solve those alternative system problems with scale.

It is an old idea in the venture capital world of Silicon Valley that you have to have an idea that has a mass market in it to be worth funding.  Your new idea has to scale financially or you do not get funding.  There is very little funding of alternative energy ideas right now because of their scale problems.  Low quality energy systems need large scale infrastructure installations to be able to scale in energy collection and financial returns.  You need land, power lines, heavy machines, lots of manual labor, heavy manufacturing, roads, and all the rest to put up your new alternative energy system and to get enough high quality electricity out of it to make it worthwhile.  Venture capital does not fund those kinds of things, governments usually do.

Enter the "Carbon Tax."  If governments can convince people to be taxed on the carbon energy they use because the weather in the last part of the twentieth century was warm, then you have a large scale funding stream.  That money can be invested in scaling infrastructure for non-carbon energy systems and provides the financial scalability for funding new ideas.  Many people from George Soros to the economic advisors to president Obama to Al Gore are looking at carbon taxes this way.

The difficulty with the carbon tax is the justification for it and where the money goes.  If the justification is 20 years of warm weather, then a case can be made to spread the money around everywhere.  Including, shifting money from developed nations to undeveloped nations, if you attach some kind or moral justice concept to it also. 


If the justification is that carbon energy is a depleting resource and funding of large scale infrastructure is needed to make low quality energy systems viable, then you spend the tax money in the developed nations where it is collected.  That keeps the jobs there and keeps the economic engine running there.

Death and taxes. . . . .