According to the EPA, coal costs between $11.55 and $52.25 per ton depending on where it's sourced from (which affects quality, apparently). When he says, "per ton of Carbon" I wonder if he's talking about the actual carbon weight in the fuel, or the weight of carbon dioxide produced after burning the fuel?
The article referenced above goes on to say, "The carbon dioxide emission factors in this article are expressed in terms of the energy content of coal as pounds of carbon dioxide per million Btu. Carbon dioxide (CO2) forms during coal combustion when one atom of carbon (C) unites with two atoms of oxygen (O) from the air. Because the atomic weight of carbon is 12 and that of oxygen is 16, the atomic weight of carbon dioxide is 44. Based on that ratio, and assuming complete combustion, 1 pound of carbon combines with 2.667 pounds of oxygen to produce 3.667 pounds of carbon dioxide. For example, coal with a carbon content of 78 percent and a heating value of 14,000 Btu per pound emits about 204.3 pounds of carbon dioxide per million Btu when completely burned.(5) Complete combustion of 1 short ton (2,000 pounds) of this coal will generate about 5,720 pounds (2.86 short tons) of carbon dioxide."
So, it matters whether he's talking about Carbon, or Carbon Dioxide. For scientists, these guys are often very sloppy with their language, saying "carbon" in many places where they actually mean carbon dioxide. They talk of "carbon pollution" which is actually soot, but they mean carbon dioxide.
In any case, if we assume that he really means carbon dioxide, we can estimate that he wants to start off with a 50% increase in the cost of burning coal. Natural gas releases less carbon dioxide per unit of energy produced (roughly half), so instead of adding $28.60 per ton of coal purchased, it would add about $14.30 the first year. But, Natural Gas is cheaper than coal, so we're still talking about roughly doubling adding 50% to the cost of fuel.
That's just the first year. By the second year, the cost of fuel will have doubled, with the taxes being equal to the cost of the fuel itself. By the forth year, the cost of fossil fuel for electricity production will be two thirds taxes. Does anyone think that the power companies can replace all fossil fuel generation in 4 years?
In 6 years, the cost of fossil fuels to the energy companies would be 3/4 taxes. In 8 years, a $40 ton of coal that produces 2.68 tons of CO2 will have $160 worth of taxes applied to it. Six years. How long will it take to build up non-fossil fuel alternatives to all of the existing fossil fuel plants in use today? Or, even to make a real dent in it?
How much money will it take to build a replacement power generation infrastructure for the entire US in 10 years? I'm thinking many trillions of dollars. Where's that money going to come from? If loans, who will be offering those loans? Remember that loans create money, and when we create money, the money we already have is automatically devalued. The banks will get authorization to create hundreds of billions of dollars per year in new dollar creation, and the energy companies will get that money for extremely low rates. They will use a lot of that money on new construction, and a lot of it on "overhead." Shareholders of companies who are doing work on the new infrastructure will get filthy stinking rich. People who work at other jobs won't see their incomes go up much (they'll get a dividend, of course) but they will have to immediately spend that money on the increased prices of everything. The new economy will have more cash, but the dollar will buy less.
This is a scientist speaking here. He doesn't think that raising the price of "carbon" by $10 per year, every year, will have a negative effect on the economy.
Now, let's say that we do manage to completely replace all fossil fuel generation in the US with non-carbon dioxide producing alternatives in the next 10 years. That would mean that we're not buying fossil fuels, which means that no fossil-fuel taxes are being collected, and no "dividends" are being paid back to the public.
Wait, no. We won't be completely out of the fossil fuel business, because semi-trucks, dump trucks, construction equipment, jet airplanes, military equipment, large ships of all kinds, trains carrying goods, etc. The cost of operating those will continue to rise every year until they change the system, I suppose, as "carbon taxes" become the largest part of the cost of shipping anything. We, as of yet, have not invented anything that can compete with diesel fuel for moving goods. Of course, retail diesel fuel is fairly expensive as compared to bulk coal delivered to electric companies. A ton of diesel fuel is about 280 gallons, which costs around $700 today and would generate about 5000 pounds (2.5 tons) of CO2. At $10 per ton, that's only adding $25 to the price in the first year. No big deal. By the 10th year, assuming the base price of diesel didn't change, the diesel would cost $950 per ton, and by the 15th year it would cost $1075, or an additional 53% of the cost due to carbon tax alone. If I'm right about general inflation, the cost per gallon could be double (and thus, the carbon tax would still be a very small percentage of the actual cost at the pump).
Either way, it looks like $10 per ton of CO2 for gasoline and diesel fuel sold at the pump is fairly insignificant, but the cost to electricity generation might be significant.
We'd better hope that the new energy systems are one whole hell of a lot cheaper than coal and natural gas have been, or else everyone except the shareholders in renewable energy companies (like, I assume, Jim Hansen) will be a lot poorer.