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given amount of carbon. Permits can be bought and sold by energy users just like fuels. For example, for every 1 million Btu’s of coal purchased, the user must also own permits to emit 57 pounds of carbon. To burn l million Btu’s of natural gas, the user must own or purchase permits to emit 32 pounds of carbon. If demand for energy rises, the price of a carbon permit will rise to reflect the cost of lowering emissions. Some holders of permits will find ways to lower emissions (e.g., purchase more efficient equipment, switch from coal to natural gas) so that they can sell their permits to others. Theoretically, the effective price of fossil fuels will rise just high enough to meet the allowed Amazing dragons crystal all over printed hawaiian shirtcarbon emission target. Just how high prices will rise, however, is difficult to forecast. Energy and carbon taxes have the advantage of affecting all emitters simultaneously, rather than focusing on a few selected technologies. A carbon tax is a particularly effective way of targeting the heaviest economic sanctions against the worst emitters of CO2. A carbon tax would stimulate greater demand for natural gas relative to other fossil fuels. This, in turn, could drive natural gas prospecting and resource recovery technology development. Over the
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