Carbon Pricing or Bust

The Paris talks at COP21 just concluded with a deal, which although it leaves a lot to be desired, is at least a consensus that change is needed. Coincidentally (or not), Bernie Sanders recently released his climate change policy plan, which as its central policy calls for a price to be placed on carbon. While timely, is it realistic to think that the US, or any other global government, is willing to take such a step, even in light of COP21?

The concern for many is that whether to price carbon, and at what rate, is going to difficult to negotiate, as has been true of cap and trade pricing. Cap and trade became unworkable in Europe precisely because the EU was unwilling to make the pricing and credit distribution tight enough, especially in the face of massive global economic downturn. How might carbon be priced fairly, and expeditiously, by the governments who will be in charge of setting the price?

In addition, as was noted recently on NPR in a show discussing the carbon market in China, tracking efforts may also be contentious; can we expect sufficient transparency of carbon markets to know whether pricing is correct or whether actual emissions reductions are occurring? There is a huge incentive for industry to game the system, as well as for governments to tout successes that aren’t really there.

Still, as a growing citizen and scientific chorus demands real and immediate change, working with steep carbon prices is virtually the only way to make the major reductions needed, in the short time frame the planet has left. One proposal, promoted by Citizens Climate Lobby, called “carbon fee and dividend”, begins with a fee of $15 per ton on CO2, and rises from there. Fees are paid directly to citizens to even out the pain of increased energy costs.

The technologies and the policies needed for massive, immediate change are ready and waiting for global adoption. The big question is: when will the decision makers be willing?

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