A major new report commissioned by the governments of China and Brazil has called for a carbon tax — or a carbon cap-and-trade system that would also impose a carbon price.
Lighting the Way: Toward a Sustainable Energy Future, authored by leading scientists and
energy experts from 13 countries including Russia, India, Canada,
Kenya, Egypt, Japan, and the U.S., along with Brazil and China, calls for "a wide variety of policy instruments [including] market incentives such as a price or cap on carbon emissions (which can be especially effective in influencing long-term capital investment decisions)." (The quote is from Section 4, The Role of Government and the Contribution of Science and Technology. Our Quote of the Week is drawn from the final "Conclusion" section, Lighting the Way.)
How high a price? Here’s what the report authors, who were assembled by the InterAcademy Council, a group representing the world’s 150 scientific and engineering academies, and were chaired by Nobel Laureate Stephen Chu, Director, Lawrence Berkeley National Laboratory, and José Goldemberg, Professor, University of São Paulo, Brazil, had to say:
Opinions vary as to the level of price signals that are warranted, but many experts believe that a price on the order of US$100–150 per ton of carbon equivalent emissions (in other widely used units, US$27–41 per ton of carbon dioxide equivalent emissions) may be necessary to overcome current cost differentials for many low- and non-carbon technologies and to stimulate the large-scale changes that will be required to eventually stabilize atmospheric concentrations of greenhouse gases.
It is important … to emphasize … that establishing in every market that there eventually will be an emissions price—in the range of US$100–150 per avoided metric ton of carbon equivalent (US$27–41 per ton of carbon dioxide equivalent)—is more important than establishing exactly the number of years in which such a transition will occur. For many countries, pragmatic considerations are likely to argue for a phased and multi-pronged approach, wherein an initial carbon price signal is gradually increased over time and complemented by other policies to address remaining market barriers and accelerate the commercialization of more efficient,
Without indicating a preference, the report states clearly that the carbon price must come about from either a carbon tax or a cap-and-trade system, which it compares clearly and fairly here.
In putting its imprimatur on the report, the Chinese government has taken a major step in dismantling what The New York Times earlier this year called "an alliance of denial [in which] China and the United States are using each other’s inaction as an excuse to do nothing" about the global climate crisis.
Co-chairs of the InterAcademcy Council are Bruce Alberts, Past President, U.S. National Academy of Sciences, and Lu Yongxiang, President, Chinese Academy of Sciences.
Photo: nataliebehring.com / Flickr
That is an important start. This is a great start from the scientific community. If anything is going to get done on something that is mostly a problem with the warming call that is scientific, the only way to get the general population to move on this is for the scientists to do what they don’t want to do and get into controversial politics.
Even if we get a price on carbon, every country can still move on consumption tax carbon use. We should be replacing sales taxes that tax general products and then only tax fossil fuels with it. The price on carbon will help on countries that want to tax fossil fuel use in industries that are affected with import/export industries. Fossil fuel consumption can still be taxed without the worry of affecting import/exports.
I always wonder where they come up with these numbers. $27-41 per ton of CO2? Maybe that’s reasonable. Mankiw in the post below this one is quoted as wanting $1/gallon of gas, which would be $100/tCO2, two to three times higher than this group wants. How do you decide? And one thing you guys need to face up to, which I raised last month: a true carbon tax is effectively going to fall far more heavily on coal for electricity than gasoline for driving. That’s just the nature of their carbon emissions. $30/tCO2 is only going to be about 30 cents a gallon, which is a typical fluctuation over a few months lately. It’s not likely to significantly change driving behavior. However $30 will double the cost of coal to electrical generators, making an enormous difference to that industry. The economic message behind these figures is that it makes more sense to remediate coal emissions than gasoline. "Of course we should do both", you might want to say, but that’s infantile. The point of a carbon tax, it’s great advantage, is that it shows us what our priorities should be, in terms of where its impact is felt the most. Coal is where the action is on this issue. If you ignore that or try to pretend it isn’t true (adding extra gas taxes like Dingell did) then you’re failing to understand the reasons why carbon taxes are the right solution to the CO2 problem.
Steve Hill says
Education should be used to make individuals, corporations and businesses to act – not just knowledge of climate change but education on how climate change is and will impact on their lives.
Health, their homes and ultimately their money will be damaged if action isn’t taken, in fact all these are happening now.
If people realised what they could do for free and what technology they could implement to save energy and hence money they would be become very energy efficient and as a result reduce their carbon emissions.