Implementing Effective Carbon Pricing

The Global Commission on the Economy and Climate / by James Rydge

[Business Green] Carbon pricing does help to alleviate greenhouse gas emissions – and need not harm economic growth, according to a new report by the New Climate Economy (NCE) today.
The paper looks at examples of carbon pricing being implemented across the world, and finds concerns over industrial competitiveness, which are said to currently keep prices too low to be effective, have not materialised in practice.
Lord Nicholas Stern, co-chair of the Global Commission on the Economy and Climate, which runs the NCE, said the time is now right for the introduction of carbon pricing along with “complementary measures” such as reform for fossil fuel subsidies to act as negative carbon prices…
The paper cites several situations where carbon pricing has raised revenue without doing harm to the economy. For example, the nine states in the Regional Greenhouse Gas Initiative (RGGI), the first market-based carbon regulatory programme in the US, grew 0.4 per cent more than other US states between 2009 and 2013, while simultaneously significantly reducing their emissions.
Ireland’s carbon tax meanwhile raised crucial revenues during the global financial crisis, while British Columbia had higher economic growth than the rest of Canada even while a carbon tax was helping it achieve an emissions reduction of 10 per cent.
The report also highlights China’s upcoming introduction of a national cap-and-trade system as a sign that carbon pricing is beginning to be seen by governments as a way of reducing emissions without stifling growth…

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