A gallon of gasoline emits about 19lbs of CO2 when burned. A $40/ton tax on CO₂ emissions would add about $0.38 to the price of a gallon of gasoline, about a 15% increase in current gasoline prices. In the near term, what would be the percent decrease in quantity demanded for gasoline given the short run elasticity of demand for gasoline is -0.33.

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