NEW YORK — At the U.N.’s Climate Leadership Summit held on Sept 23, 73 countries and 11 states and provinces declared their support for carbon pricing. Together, these regions make up 54 percent of the world’s greenhouse gas emissions, as well as 52 percent of GDP.
Among the participants were many of the world’s largest carbon consumers including China and Russia, as well as less developed nations like the Democratic Republic of the Congo, Zambia and Bhutan.
If enacted, carbon pricing would apply a cost to carbon pollution with the goal of persuading polluters to decrease their amount of greenhouse gas emissions. The majority of economists believe that carbon pricing is the most efficient way for countries and businesses to reduce environmental pollution.
Experts believe that introducing a carbon price would also bring more attention to the cause, providing a good incentive for people to work towards environmentally-friendly behavior such as reducing reliance on cars. In addition, money produced through carbon pricing could be used in environmental and anti-pollution efforts including research investments to build more efficient vehicles.
This level of international carbon pricing has the potential to lower emissions exponentially. “The science is clear. The economics are compelling,” said World Bank Group Vice President Rachel Kyte. “We are seeing a shift toward the economic architecture that will be necessary to avoid a two-degree-warmer world, an architecture that supports green growth, jobs and competitive.”
But what would carbon pricing mean for the average consumer? Despite the fact that more than 73 countries and 1,000 businesses worldwide support carbon taxing initiatives, consumers would have to vote in favor of implementing these taxes in order for carbon pricing to be approved.
Companies are currently focusing on adapting electricity plants which account for the highest percentage of carbon emissions at 38 percent (compared to transportation emissions which represent 31 percent). The majority of electricity is produced through the use of coal, which is one of the leading causes of carbon emissions. However, natural gas produces approximately 57 percent less CO2. This means that carbon emissions could be reduced by over half if all power plants replace coal with natural gas.
A recent European study reports that carbon prices would be around $80 USD for each ton of CO2. The study suggests that consumers would pay similar or lower electric utility prices overall.
On the other hand, opponents of carbon pricing state that this would be a regressive tax as it would cause more problems for lower-income families. Wealthier families are able to purchase energy-efficient technology; however, many struggling families do not have the extra money to put towards energy consumption. As a result, opponents argue, carbon pricing could cause a variety of unintended economic issues.
In order to promote carbon tax initiatives, the World Economic Forum, World Bank Group and We Mean Business Coalition plan to join forces to form a leadership coalition to work with businesses and governments. While the U.S. has not yet confirmed its support for carbon pricing, several countries are currently planning to enact CO2 taxes including China and South Africa.
– Meagan Douches