Part 1. Imagine you have a diesel-powered car, and you can buy either diesel or biodiesel fuel (which is possible in some parts of the US). The cost of biodiesel is $38/GJ, and the biodiesel causes 22 kg CO2 emissions per GJ over its lifetime. The diesel costs $30/GJ and causes 88 kg CO2 emissions per GJ over its lifetime (4 times more!!). Part 1: What is the cost of mitigation of choosing biodiesel? Part 2. What carbon tax would be required to make the biodiesel cost the same as the diesel?

Part 1. Imagine you have a diesel-powered car, and you can buy either diesel or biodiesel fuel (which is possible in some parts of the US). The cost of biodiesel is $38/GJ, and the biodiesel causes 22 kg CO2 emissions per GJ over its lifetime. The diesel costs $30/GJ and causes 88 kg CO2 emissions per GJ over its lifetime (4 times more!!). Part 1: What is the cost of mitigation of choosing biodiesel? Part 2. What carbon tax would be required to make the biodiesel cost the same as the diesel?

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter2: Economics: Eight Powerful Ideas

Section: Chapter Questions

Problem 19P

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