Elon Musk says he pitched the Biden administration on instituting a carbon tax as a way to encourage a faster shift to renewable energy, but he was told the idea was essentially “too politically difficult.”
Musk described the conversation with the Biden administration during a new podcast with Joe Rogan that was released Thursday. The White House did not immediately respond to a request for comment.
Rogan had asked Musk whether a new technological breakthrough is needed to increase the adoption of battery-powered vehicles. Musk argued the bigger issue is that “a hell of a lot of batteries [are] needed” in order to shift away from fossil fuels and toward renewable energy. The best way to encourage that shift, in Musk’s view, is to “put a price on carbon.”
“My top recommendation honestly would be just to have a carbon tax,” Musk said. “Because we’re not paying for the CO2 capacity of the oceans and atmosphere, we have what in economics is called an unpriced externality. The market is unable to respond to an unpriced externality. If we just put a price on it, the market will react in a sensible way.”
Musk suggested that consumers should pay the tax, and rebates could be offered to people who make lower incomes. A carbon tax could help further even the playing field for Tesla’s electric vehicles, though Musk said SpaceX (which is currently trying to acquire natural gas wells in Texas to fuel its rockets) would have to pay.
“I talked to the Biden administration, the incoming administration, and they were like, ‘Well, this seems too politically difficult,’” he said. Musk said he remembers thinking, “That’s at least half the reason you go elected, so why don’t you just fight for that?”
This isn’t the first time the Tesla and SpaceX CEO has agitated for a carbon tax. Musk reportedly floated the idea during early meetings with the Trump administration but got “little or no support,” according to a 2017 report from Bloomberg.
Musk has even previously called for a “revolt” against the fossil fuel industry while making the case for a carbon tax, and he accused big oil companies of conspiring against Tesla. But he said on Rogan’s podcast that he is “not in favor of demonizing the oil and gas industry” because it would upset the people working in it, and also stopping its operations completely would mean everyone would “die of starvation, basically.”
“We’re gonna need to burn fossil fuels for a long time. The question is just at what rate do we move to a sustainable energy future?” he said.
“There are people who have spent their whole career in oil, and gas and they started out in that career when it didn’t seem like that bad of a thing to do. So then they’re like, ‘Hey man, I just spent my whole career working hard to do useful things, and now you’re telling me I’m the devil.’ That’s gonna make them pretty upset,” he said, echoing remarks from late last year. “Honestly the smartest thing the oil and gas industry could do is say, ‘Let’s do a carbon tax. We’ll just do a carbon tax, and it will make us not the devil.’”
One of Biden’s main campaign planks was his support for an aggressive clean energy strategy. He committed to eliminating carbon pollution from the power sector by 2035 and reaching a “100 percent clean energy economy” no later than 2050. He even voiced support for ending fossil fuel subsidies. And since taking office, he has recommitted the US to the Paris climate accord. But he has not committed to a carbon tax, despite agitation from other business leaders close to the administration and Treasury Secretary Janet Yellen, who said the climate crisis can’t be solved without carbon pricing.
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