Carbon tax as a dynamic optimization problem

Wasting the atmosphere globally with carbon dioxide and other greenhouse gases is a special case of environmental pollution. Emissions from human activities are substantially increasing the atmospheric concentrations of the greenhouse gases, carbon dioxide, methane, CFC’s and nitrous oxide. NO x and hydrocarbons contribute indirectly to the greenhouse effect by forming Ozone in the atmosphere. These increased concentrations will result in an increased global warming, and as a consequence in a rise of the atmospheric temperature and the ocean level and to other potentially serious climate changes.An approach to define the ”carbon tax” as an aggregate environmental ”price” is discussed based upon the concept of global warming potential. The paper formulates the model to estimate the CO2 tax as function of CO2 emission reduction and combines preliminary estimates of the reduction potentials and costs of the CFCs, N2O, CH4 and NO x , to define the overall effect of CO2- equivalent emission reduction in Switzerland. Some conclusions on the international rationale are also discussed concerning the recommendations of the Toronto and IPCC Conferences and their applicability to Switzerland.