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EnergyInnovation / eps-us

Energy Policy Simulator - United States
GNU General Public License v3.0
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Apply industry carbon tax to industrial energy use only #227

Closed mkmahajan closed 2 years ago

mkmahajan commented 2 years ago

The EPS currently calculated the industry carbon tax revenue based on the variable Industrial Fuel Use, which includes both fuels used for energy and nonenergy purposes: image

I asked Chris about this, and his response was: "Every carbon pricing policy I've ever seen is based on CO2 from fuel combustion. So, chemical feedstocks would not add to an emitters' compliance obligations in a typical setup. (There are some exceptions around offsets, which are typically projects in uncovered sectors, which may cover methane from rice cultivation or methane from coal mining.)"

This suggests we should instead calculate industry carbon tax revenue based on the variable Industrial Fuel Use for Energy Purposes rather than Industrial Fuel Use.

This seems like a high priority item to get right. @jrissman and @robbieorvis would you be okay with me making this edit for 3.4 rather than waiting for 3.5?

robbieorvis commented 2 years ago

Yes, I think so, but defer to Jeff.

jrissman commented 2 years ago

Okay, go ahead. Please remember to make the corresponding change to the BAU version of that variable too, which is just to the right on that sheet. Thanks for the fix.

mkmahajan commented 2 years ago

I made this fix to both Industry Sector Carbon Tax Revenue and BAU Industry Sector Carbon Tax Revenue.

I also checked where we calculate the carbon tax expenditures by industry, and that was already correctly applied to only fuel used for energy purposes. I also checked the debugging assistance page, and I do not see any issues there after this edit.