Global warming is seen by many as one of the greatest challenges the world faces today. In the 1800’s Fourier discovered that the earth’s atmosphere provided an insulation effect known from that time as the greenhouse effect. Later, Tyndall, proved that the greenhouse effect existed by concluding that water vapour was the strongest absorber of radiant heat in the atmosphere. In 1972 the United Nations convened a conference on the Human Environment in Stockholm that was the first major international conference to be held to discuss global environmental issues. Twenty years later the United Nations Framework Convention on Climate Change (UNFCCC) was established with the goal of stabilising atmospheric greenhouse gas concentrations. At the Kyoto Conference of Parties (COP) in 1997 it was agreed to reduce the overall emissions of six greenhouse gases to around 5% below 1990 levels by 2010 (targets varied for different countries) [1] . Despite the contribution of Libya in the emission of GHG gases does not exceed 0.22% of the global emission, Libya has ratified the United Nations Framework Convention on Climate Change (UNFCCC), United Nations Convention to Combat Desertification (UNCCD), signed the Kyoto protocol (1997) and the Paris agreement on climate change (2015), and created a DNA in 2010. Libya vigorously works toward further international progress in the global warming as a security issue.

Environmental damage costs of carbon CO₂e emissions represent the uncompensated monetary values of environmental and health damages it causes. These costs―sometimes called external costs―are imposed on society and the environment, and are not accounted for by the producers or the consumers. External costs should reflect the value of the damage caused by industrial facilities or services, and associated processes. Most research had only been done in North America and Europe [2] , and almost there is no work has considered the developing country. Despite the total emissions from these countries together is greater than what is emitted from the industrialized countries. The world total emissions for the year 2010 in million metric tonnes were 31780.36 the share of continents was a percentage as follows: North America 20.8%, Central and South America 39.6%, Europe 13.8%, Eurasia 7.7%, the Middle East 5.6%, Africa 3.6%, Asia & Oceania 44.6% [3] . According to the US Energy Information Administration, Libya emitted 60.60 million tonnes of CO₂ which is equal to 9.4 tonnes per person, making Libya ranks 56 in the global ranking out of 200 countries.

The major source of air pollution is the energy sector which is key to the Libyan economy. Nearly every aspect of our modern lifestyle is impacted by oil. Oil is used to power our vehicles, to create medicines that keep us healthy, and to make the plastics, cosmetics, and other personal products that enhance our daily lives. However, none of these products would exist without very complicated and very maculated process. Crude oil is extracted, refined, transmitted, stored and at the end burned.

Libya possesses substantial reserve of hydrocarbons. Libya is ranking 31 largest crude oil producer in the world. At the beginning of 2016 it possessed 48.36 billion bbl of proved reserves, amounting to 4% of global proved reserves. Libya has 27 oil and gas production fields, including 896 wells with average barrels per well daily 2300 [4] . The extracted oil is transferred from wells to refineries or export directly through pipelines along 7005 km. Also, the gas extracted to the condensate plants or transported directly through pipelines along 3743 km; and for condensate gas transported through lines of 882 km [5] . Oil production peaked at 2 billion barrels per day in 2010, but has since fallen and in 2011 as a result of unstable political situation in Libya. Figure 1 presents oil production and discovery forecast [6] . Libya is also well-endowed with natural gas. In 2016, there were 1.505 trillion cubic meters of proved reserves of natural gas. Production of natural gas in Libya in 2014 was 11.8 billion cubic meters giving it a reserves to production ratio of around 130 years, compared to 8.6 years in the US and 81 years in the Russian Federation. Libya also has a refined petroleum and petrochemical industries, during the year 2013, the refined facilities produced about 158,300 bbl/day. Table 1 shows the primary energy balance in the country. Table 2 the distribution of the primary energy along the sectors and also the annual production of each sector. Evidently, Libya will be producing and utilizing the fossil fuel for a long time. Mainly Libya has six types of primary energy, these are: Natural gas (NG), heavy fuel oil (HFO), light fuel oil (LFO) or diesel, Gasoline, air-jet fuel and liquefied petrol gas (LPG). Figure 2 presents 100% stacked column chart of data in Table 2, which compare the percentage that each sector contributes to the total fuel consumption. As it depicted in the Figure 2 regardless of the quantities-electric power generation industry is the biggest consumer of the NG, HFO and LFO. Of course, the transport sector-passenger cars-consume almost all the amount of gasoline as well as the case for air- jet fuel is fully consumed by aircrafts. While the LPG is almost consumed by the residential sector for coking purposes.

[Source: United States Energy Information Administration, is not available http://www.eia.doe.gov/].

[Source: Authors collection].

Figure 3 presents a historical chart of CO₂ emissions in million tons per year. The reduction in values after 2010 is a result of the country’s civil war and not a real drop in the percentage of CO₂ emissions [7] . Therefore, we must put in

place controls to use this energy without harming the already fragile environment. Scientific evidence suggests that the increasing concentration of carbon dioxide, observed since the late 1950s has probably contributed to increasing the average world temperature. As the combustion of fossil fuels is largely responsible for carbon emissions, a widespread demand for policy interventions in the energy sector has arisen. However, a carbon tax seems to be the easiest way to face the problem. Environmental taxes have some advantages over other instruments: First, taxes indicate the cost of a good environment; second, they provide an incentive to introduce new technological processes promoting efficiency and energy conservation; third, they allow producers to choose where pollution abatement has to be implemented, thus contributing to reducing environmental damage at minimum economic cost; finally, taxes provide new revenue that could be used to subsidize environmental technological innovation [8] .

Knowledge of the magnitude of emissions released from a specific industrial facility, as is available in environment related researches (as it depicted in Figure 4 [9] ), does not in itself provide information on the subsequent impacts of these pollutants on human health and the environment, nor the associated monetary costs of such damage. An application of modelling frameworks that link knowledge of pollutant emissions with their impacts and consequent damage costs is therefore necessary. There has been significant research undertaken to develop improved scientific modelling frameworks and economic methods for estimating the impacts and damage costs of air pollution. It is clear that calculating values of damage costs on the basis of a single value for each tonne of emission is a gross simplification. In reality, the link between the quantity of emissions and the eventual damage costs is complex. Many factors will affect the damage costs caused by a unit of emissions, including and not only [10] :

・ Weather conditions (wind speed and direction, air pressure, whether it is raining, etc.).

・ The height and velocity of emissions to air.

・ The population eventually affected (number, distribution by age and income, etc.).

・ The existence of other chemicals in the atmosphere.

・ The retention of the pollutants in the atmosphere.

The effects of air pollution on human health and the environment have economic impacts. According to the Healthy People report, each year in the United States: The health costs of human exposure to air pollutants range from $40 to $50 billion and the environment costs $6 billion by acid rains damages. These human and ecological impacts are translated into economic values, and the externalities are identified in the ExternE [11] . Zwaan and Rabl in [12] , provided a high level economical assessment for impacts during the electricity production in typical power plant in Europe conditions. They estimated the global damage of 29 €/tof CO₂e (exchange rate 1 € = 1.513 LD). In fact, the ExternE can be considered as a fundamental for any socio-eco-environment assessment, especially in the absence of information about the cost of environmental damage as is the case for Libya.

For Libya, there are fewer economic studies concerned the environment damage cost. Even there are no studies inventoried air emissions from petroleum, production and service sectors in the country. However, there is one study evaluated the environmental impact of massive use of mobile electricity generators in Libya in order to compensate the deficit in electricity during the over load periods [13] . Despite the cited study, there remain major gaps in knowledge on overall global damage costs for air pollution, and the evolution of economic damages over time. Some non-health damages have still not been evaluated at the global level, such as the impacts of air pollution on biodiversity and visibility. In this study, the value of damage from CO₂e was adopted (29 €/ton CO₂e which equivalent to 43.88 LD or 32 US$). This value is close to what Patrick Luckow and etc has been suggested in [14] , the levelized cost for 2020-2050 in US$ per ton CO₂e are: 26.24$ for low case, 41.4$ for mid case and 59.53$ for high case. One of the most important policy schemes proposed for combating against greenhouse gas emissions is tax policy, which is known as carbon tax. A carbon tax sets a per-unit charge on emissions so that it is an environmental tax that is levied on the carbon content of fuels [15] . Table 3 provides an overview of existing national and sub national jurisdictions that have introduced a direct carbon tax [16] .

*Depending on fossil fuel type and usage.

A method of estimating environmental damage costs of CO₂e emissions from

^†GDP = 39.973 billion LD (2010).

well to wheel by sector and by fuel consumption type was developed. With this approach, an estimation of environmental damage costs of fossil fired was carried in Libya. All types of energies supplied to peoples and some goods and services (electricity, gasoline, diesel and LPG) are evaluated. Furthermore, the environmental damage costs for the none fossil fuel service or production sectors (such as: Iron & steel, cement, red meat and municipality services) are also estimated. The gross environmental damage costs in Libya are 4.4 billion LD which equivalent to 10% of the country GDP. This value should be turn into projects for the environment’s good to compensate the damage winning a result of human activities. The followed procedure enables to investigate the effect of each fossil fuel on the environment individually for comparison of mitigation variants. Obviously from the results of the study that the electricity generation (which including both the general grid and that generated locally by house holders) has the heaviest weight on the environment. In this context, the mitigation policy is explicit, a shift to produce of clean energy. Fortunately, Libya has a high potential of solar and wind energies. Thus the solution will be employed the revenue from carbon tax implementation in the production of electrical power from solar and wind energies.

This work is the first step made in order to achieve the following aims:

1. Estimating the effect of different carbon tax on CO₂e emissions on the economic growth of the country, leading to obtain the optimum tax values for various public and private business;

2. Estimating the air emissions inventory of Oil and Gas extraction, refinery, transmission, storage and exploitation, in order to evaluate the gross environmental damage costs by considering all pollutants emit from the chimneys of the power plants; and

3. Putting the renewable energy sources those that have high potential in the country in a fair competition with the fired fossil fuel energy.

Nassar, Y.F., Aissa, K.R. and Alsadi, S.Y. (2017) Estimation of Environmental Damage Costs from CO₂e Emissions in Libya and the Revenue from Carbon Tax Implementation. Low Carbon Economy, 8, 118-132. https://doi.org/10.4236/lce.2017.84010