The discussions about a carbon tax, or a cap-and-trade system, tend to revolve around “putting a price on carbon,” which is to say, charging polluters money for dumping carbon into the atmosphere. But how should that money be used? Here’s a graph from Vattenfall, the Swedish power company, showing which solutions become cost-effective at a price of €40 per ton of carbon dioxide.

The yellow section has improvements that pay for themselves, since they’re generally based around not burning fuel to begin with. The green section has the improvements that will be cost-effective at the €40 price, and the blue section has the more expensive solutions.

I haven’t verified any data that went into this graph, which is based on McKinsey’s greenhouse gas abatement cost curves, so I can’t comment on how realistic the numbers are. But from an energy literacy point of view, it gives a nice graphical depiction of how [...]