This is a useful thread. I wanted to add a comment about the notion that "small prices don't work", to help people understand why even a modest carbon price will help drive change.
The key for determining what effect a price change will have on demand is the percentage change represented by that price change. This % is a function of the price of fuel and the carbon content of the fuel, to first order.
For industrial and utility applications (and also perhaps jet fuel) the fuel price per unit of energy content is relatively low and the carbon content relatively high (for coal especially) compared to consumer applications.
A simple illustration can help. A CO2 charge of $10/tonne will increase the cost of a coal plant by about 1 cent/kWh. That increases the variable costs of existing coal by about 25% (round numbers). That's huge.
Typical carbon prices in existence now are on the order of $20-40/tonne, so big enough to matter for coal fired electricity, increasing the cost of existing coal by 50-100% (price increases like that would drive coal generation to zero in short order in most places).
That same $10/tonne carbon charge will only affect consumer gasoline prices by 10 cents/gallon, which is very very small. Even changes of 20-40 cents/gallon using current CO2 charges won't affect demand much at all, because that's a roughly 10% change in price. Not much!
So small carbon charges can play a very important role in driving change in the electricity sector and industrial sectors in particular. They are not a silver bullet, but they would be very effective in reducing emissions from certain sectors /fin
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