Here's Why Biden Administration Turned Down Elon Musk's Carbon Tax Pitch

Musk had brought forward the same idea during his early meetings with the Trump administration as well but he got no support.

Recently, Elon Musk stated that in a bid to encourage tax payers to shift to renewable energy faster he asked the Joe Biden's administration to impose a carbon tax. However, the response that he received was that the idea was "too politically difficult."

Musk brought forward the details of this conversation between the Biden administration and him during a new podcast with Joe Rogan, which was released on Thursday. The White House has not officially commented on the same.

Elon Musk said "a hell of a lot of batteries [are] needed" for people to truly make a shift towards renewable energy. Acccording to the tech magnate the best possible way to encourage the transition is to "put a price on carbon."

"My top recommendation honestly would be just to have a carbon tax. 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," stated Musk.

The SpaceX and Tesla CEO also suggested that the government can also offer rebates to people from lower income groups. According to him, while a carbon tax would help even the playing field for Tesla's electric vehicles, SpaceX would have to cough up the tax payment.

Musk said during the podcast: "I talked to the Biden administration, the incoming administration, and they were like, 'Well, this seems too politically difficult." He added that he remembers thinking, "That's at least half the reason you go elected, so why don't you just fight for that?"

Not his First Try

Elon Musk
Wikimedia Commons

One should also note that this is not the first time Elon Musk floated the idea of carbon tax. He had brought forward the same idea during his early meetings with the Trump administration but unfortunately at that time he got "little or no support," according to a 2017 Bloomberg report.

Although previously, while talking about carbon tax, Musk had called for a "revolt" against the entire fossil fuel industry and also accused the big oil giants of conspiring against Tesla. However; this time around, during the podcast, he stated that he doesn't want to demonize the oil and gas industry because that would upset the people working in it. Also stopping its entire operations would mean everyone would "die of starvation, basically," he added.

"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?" Elon Musk 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. 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,'" stated the business tycoon.

Related topics : Elon musk Spacex