Carbon Prices Are Too Low to Reduce Emissions - Scientific American - 0 views
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Carbon prices are spreading throughout the world’s largest economies. The only problem for climate hawks: They’re nowhere near high enough to produce a meaningful reduction in carbon emissions.
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The analysis identified a gap of 76.5 percent between real climate costs and carbon prices implemented today across 42 OECD and Group of 20 countries. The gap has narrowed by 3 percent over the last three years, the report found
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“The gulf between today’s carbon prices and the actual cost of emissions to our planet is unacceptable,” OECD Secretary-General Angel Gurría said in a statement
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“Pricing carbon correctly is a concrete and cost-effective way to slow climate change. We are wasting an opportunity to steer our economics along a low-carbon growth path and losing precious time with every day that passes.”
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An abundance of carbon credits and exemptions for major emitters has plagued emission-trading systems in Europe and California, making credits cheap and hindering their effectiveness
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A series of recent developments, though, have provided a glimmer of hope for would-be carbon taxes. The United Kingdom’s adoption of a carbon tax in the power sector produced a 58 percent drop in emissions from 2012 to 2016.
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The biggest development of all may be in China, the world’s largest greenhouse gas emitter, which has taken steps toward its own emissions trading program. China’s move has the potential to narrow the gap between global carbon prices and climate costs to 63 percent in the early 2020s, OECD found.
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The OECD report compared effective carbon rates—taxes on fossil fuels, carbon taxes and emission-trading credits—against estimated climate costs, which it projected at €30 ($35) per ton of carbon. The result is a carbon pricing gap, the difference between actual carbon rates and climate costs.
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The organization found that countries with larger carbon pricing gaps tend to have more energy-intensive economies. Russia and China, for instance, have gaps of 100 percent and 90 percent, respectively, OECD found.
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Less energy-intensive economies, by contrast, have less ground to make up. OECD measured the gap in Spain at 51 percent, Ireland at 42 percent and France at 41 percent