3.9 cents/kg, or $39/t.1 This means that a carbon or CO2 tax of $39/t CO2 would raise the cost of a kilowatt-hour from advanced coal by 3.9 cents, making this fuel exactly competitive with nuclear. Conversely, a ''carbon saving" subsidy of $39/t CO2 paid to nuclear power would lower its cost and again achieve economic parity with coal.
The overall effect of a carbon tax is shown by drawing a line from each technology to the average point labeled "U.S. Mix." For nuclear power, this line has a slope of $51/t CO2. Thus, if current U.S. plants were each taxed at $51/t CO2, the average price of electricity would increase the 3.6 cents/kWh needed to make new nuclear plants competitive with the fossil fuels that currently supply the majority of U.S. energy. This would likely encourage utilities to invest in nonfossil forms of energy supply. It is not clear at this point, however, how such complex taxing would affect the cost of electricity and the cost-effectiveness of nuclear power to shareholders. Similar carbon taxes would make renewable technologies competitive. For example, a steeper line joining solar-photovoltaic to the U.S. mix, sloping down at $127/t CO2, would raise U.S. electricity to 10.3 cents/kWh and make the hybrid competitive today.
In Table J.3, all fossil and nonfossil technologies are compared with the U.S. mix, and the CO2 tax needed to make the choice of an alternative economically equivalent to the current U.S. supply is computed. Negative values (which correspond to subsidies for emitting CO2) make no sense and are labeled not applicable in Table J.3.
1. Throughout this report, tons (t) are metric; 1 Mt = 1 megaton = 1 million tons.
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