A New Generalized Carbon Exergy Tax: An Effective Rule to Control Global Warming

Abstract

An instrument for promoting CO2 emission reductions, taking the Kyoto Protocol goal into account, could be the assignment to energy conversion plants of a monetary charge linked to their specific emission intensity, usually called carbon tax. There are two main problems closely connected with this approach: the estimation of the charge (that must be related to the “external” cost associated with CO2 emission) and the choice of the strategy to determine the amount of the imposed charge. In this paper an analytical procedure proposed by the authors and called carbon exergy tax (CET) for the evaluation of CO2 emission externalities is presented. It is based on the thermoeconomic analysis of energy systems, which allows second law losses to be quantified in monetary terms: the resulting cost represents the taxation that is to be applied to the energy system under examination, calculated without any arbitrary assumption. Since the complete procedure of the CET evaluation is too complex to become a feasible instrument of energy policy, hereby, after applying the procedure to some conventional and advanced power plants, gas, oil, and coal-fueled, a new generalized approach, based on the results of the complete CET procedure, is proposed. The generalized CET evaluation requires much less information about the energy system and thus a simple and effective energy policy rule to manage global warming is obtained and available.