January 19, 2009

President Obama urged to use carbon tax, not carbon trading, to address climate change

As the era of President Obama dawns, the top climate change scientist in the US has warned he has to take decisive action in his first term.

As I have suggested here before, the 'carbon trading' approach pushed by Europe is having little effect. For example, it is far cheaper to pay the Congo not to cut down trees than to invest in carbon capture development for power stations. The net result being that carbon dioxide in the atmosphere continues to rise. See:

Here's what caught my eye in the Guardian report of the comments from Jim Hansen, described as "Nasa scientist and leading climate expert":

Only the US now had the political muscle to lead the world and halt the rise, Hansen said. Having refused to recognise that global warming posed any risk at all over the past eight years, the US now had to take a lead as the world's greatest carbon emitter and the planet's largest economy. Cap-and-trade schemes, in which emission permits are bought and sold, have failed, he said, and must now be replaced by a carbon tax that will imposed on all producers of fossil fuels.

The advantage of a carbon tax is that it enables policy makers to set a price for producing greenhouse gases that will make reducing emissions economically viable. With market-derived prices for licences for the right to pollute, it is proving to be more economic to buy the licences rather than reduce emissions. Though it seems to me it would be better to levy this on carbon emitters, rather than the producers of fossil fuels. That will drive efficiencies in use of fossil fuels as well as switching to other sources of energy. It may, however, be harder and more controversial to measure.

Another advantage of a tax on fossil fuels or the greenhouse gases they produce is tax income can be used directly for investing in sustainable energy, carbon capture and ameliorating the effects of climate change.

A third advantage is that carbon taxes, to a greater or lesser degree, could be used to offset other taxes. For example, green goods could be zero rated for sales tax, providing an added incentive for consumers to select them - and, incidentally, helping the economy out of recession as society is restructured to be low carbon.

These are the type of practical, national policy steps that could be taken within the framework of global commitments to contract total emissions, while converging the right each person on the planet has to produce greenhouse cases to be equitable. This 'contraction and convergence' approach is the best-supported proposal for inclusion in the Simultaneous Policy's annual voting yet again. See:

1 comment:

E.B. said...

Buying a right to pollute is not synonymous to paying a fine for polluting.

That is what, eventually, Michael Kerjman ’s brilliant “Keeping World Cool” is about: