Calculating TAUC

Given a tax of $7 per ton CO2e, the carbon content, and the cost of production for the sectors 'OILREF', 'DSTGAS', and 'DISTEL', the carbon intensity (CARBINTENS) and TAUC can be calculated.

Parameter
 CARBRATE ARB TAX ON CARBON DIOXIDE IN BILLION DOLLARS PER
MILLION METRIC TONS /0.007/;

* Carbon intensity in million metric tons CO2e per billion dollars of fuel combusted

* For natural gas, 52.94 kg CO2e per MMBtu, $8.00 (2006 dollars) per MMBtu in 2020
 CARBINTENS('DSTGAS') = 6.62;

* For electricity, 345 kg CO2 per MWh, $166.60 (2006 dollars) per MWh in 2020
 CARBINTENS('DISTEL') = 2.96;

* For gasoline, 8.55 kg CO2 per gallon, $2.30 per gallon (2006 dollars)

*For diesel, 10.05 kg CO2 per gallon, $2.18 per gallon (2006 dollars)

*82% gasoline, 18% diesel fuel
 CARBINTENS('OILREF') = 3.96;

To calculate CARBINTENS('DSTGAS'):

 

note: Mt = million metric tonnes

CARBINTENS('DISTEL') is calculated in a similar manner.

 

CARBINTENS('OILREF') is calculated differently due to its gasoline and diesel components. 

We know that:

 

Dividing by the two equations, we get:

           

 

In the scenario,
TAUC(I) = CARBRATE * CARBINTENS(I);

GAMS says that TAUC for various sectors is
DISTEL 0.021,    DSTGAS 0.046,    OILREF 0.028
 

To check TAUC('OILREF'):

 

TAUC for 'DISTEL' and 'DSTGAS' also check out as well.