Monday, May 7, 2007

Determining Your Own Carbon Footprint and Future Carbon Tax Bill

I was doing some back of the envelope math on carbon credits and carbon pricing. I was curious as to how much carbon I produce in my automobile and house, and what the "market price" is for offsetting personal carbon emissions by purchasing carbon "credits."

Starting on the pricing side, the average price for carbon emissions offset seems to be around $15 per metric ton. (See to get started).

On the carbon generation side, you can calculate your personal "carbon impact" at

In general, my house hold is emitting approximately 18 metric tons of CO2. Unfortuantely, that's quite "above" the 12 metric tons average for a family in America, and we got dinged hard on all the business travelling I do by plane (40% of our footprint and more than both cars combined) Assuming a $15 carbon tax, my household would see a substantial $270 in carbon charges.

Much has been written about the benefits in making this market predictable and deterministic. And even my quick exercise shows that the wild range of $4 to $40 for offset purchase credits could significantly change my potential future carbon tax scenario ($75 to $750 per year). Speaking from a purely market-centric, rational consumer standpoint, I'm not inclined to do a lick of change in my behavior to avoid $75 in taxes, but I could start to consider changes at $750 or higher.

Bringing this back to Wind-Sail and cleantech for a moment. I do think market forces can impact, but not wholly correct, the problems we're creating with carbon emissions and global warming. Unfortunately, as an "externality" to pricing energy, carbon emissions quite literally "break" the market. And any significant trajectory changing behavior is going to have to come from market + government forces. In my next post, I'll look back to the Montreal Protocol, which was a primarily non-market, governmental and policy force that drove the dramatic reduction of ozone-depleating CFCs ("freon") from our lives.