🛢💸 The real deal about Carbon Pricing - Revision history

Thesoftprotestdigest at 07:01, 2 September 2025

2025-09-02T07:01:39Z

← Older revision		Revision as of 09:01, 2 September 2025
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	[[File:Carbon-Market-~~Watch_cement~~-industry-report-cover.jpg\|thumb\|Thumbnailed image\|Carbon Market Watch cement industry report cover, in 2016.]]		[[File:Carbon-Market-Watch cement-industry-report-cover.jpg\|thumb\|Thumbnailed image\|Carbon Market Watch cement industry report cover, in 2016.]]
	Despite the fact that carbon pricing has been the main and most ambitious undertaking to mitigate climate change since the beginning of our century; it is widely unknown or misunderstood. It must primary be due to both of its confusing different forms, but also its tremendous complexity that never stopped to evolve since it was first implemented in 2005 in the European Union (EU). What this page wishes to propose is not only an accessible description of what carbon pricing is, without getting lost in the economic gibberish; as our goal was to analyse the effects, both positive and negative, that carbon princing is said to have on citizens, companies, governments and of course, climate (through CO2 emissions cut).		Despite the fact that carbon pricing has been the main and most ambitious undertaking to mitigate climate change since the beginning of our century; it is widely unknown or misunderstood. It must primary be due to both of its confusing different forms, but also its tremendous complexity that never stopped to evolve since it was first implemented in 2005 in the European Union (EU). What this page wishes to propose is not only an accessible description of what carbon pricing is, without getting lost in the economic gibberish; as our goal was to analyse the effects, both positive and negative, that carbon princing is said to have on citizens, companies, governments and of course, climate (through CO2 emissions cut).

Thesoftprotestdigest at 14:51, 9 March 2022

2022-03-09T14:51:54Z

Thesoftprotestdigest: /* Carbon capture and storage is too slow */

2021-01-28T11:44:49Z

Carbon capture and storage is too slow

← Older revision		Revision as of 13:44, 28 January 2021
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	Politics doesn’t seem to be on the way to purely and simply force Carbon capture and storage (CCS) technics to be installed on all carbon intensive industries — from concrete plants to electric power plants burning fossil fuels. Still, <i>soft</i> mechanisms like ETS markets are supposed to play this role without interfering too much with “business as usual”. But economical models show that only a rise of the price for 1 tonne of CO2 above 50€ could possibly force those industries to invest in CCS. So, even if some see the rise of the EU ETS carbon price since 2018 with hope, it needs to grow 70% higher to cause any drop of GHG emissions worldwide.<ref>(FR) “Le Réveilleur” youtube channel: “La Capture et Séquestration de Carbone pour réduire nos émissions de CO2 - CARBONE#4” (2020) source: https://www.youtube.com/watch?v=AQlqQEhVi1M</ref>		Politics doesn’t seem to be on the way to purely and simply force Carbon capture and storage (CCS) technics to be installed on all carbon intensive industries — from concrete plants to electric power plants burning fossil fuels. Still, <i>soft</i> mechanisms like ETS markets are supposed to play this role without interfering too much with “business as usual”. But economical models show that only a rise of the price for 1 tonne of CO2 above 50€ could possibly force those industries to invest in CCS. So, even if some see the rise of the EU ETS carbon price since 2018 with hope, it needs to grow 70% higher to cause any drop of GHG emissions worldwide.<ref>(FR) “Le Réveilleur” youtube channel: “La Capture et Séquestration de Carbone pour réduire nos émissions de CO2 - CARBONE#4” (2020) source: https://www.youtube.com/watch?v=AQlqQEhVi1M</ref>
	[[File:EU-ETS-carbon-price 2008-2021.jpeg\|thumb\|Thumbnailed image\|EU ETS carbon price variations from its creation to January 2021<ref>See Ember carbon price viewer: https://ember-climate.org/data/carbon-price-viewer/</ref>.]]		[[File:EU-ETS-carbon-price 2008-2021.jpeg\|thumb\|Thumbnailed image\|EU ETS carbon price variations from its creation to January 2021<ref>See Ember carbon price viewer: https://ember-climate.org/data/carbon-price-viewer/</ref>.]]
	CCS have become a great way for fossil industries to reassure their investors, with a “fallback solution” in case if States eventually decided to adopt <i>hard</i> mechanisms to make emissions drop mandatory (be it fines or taxes). The problem is that most predictive models and commitments for a world below the +2°C rise of global temperatures, are calling massively on the use of CCS technics. Despite this, we are nowhere near the commitments that are necessary, in term of CCS development, to reach the Paris Agreement.<ref>“Carbon capture and storage (CCS) is recognised as being vital to least cost pathways for climate change mitigation, and in particular the negative emissions technologies (NETs) that are key to limiting warming to “well below” 2C. However, it has not yet been deployed on the scale understood to be required, owing to a variety of technical, economic and commercial challenges.” <i>Carbon capture and storage (CCS): the way forward</i>, Energy Environ. Sci., 2018, 11, 1062. Published on Royal Society of Chemistry website, 2018. source: https://pubs.rsc.org/en/content/articlehtml/2018/ee/c7ee02342a</ref>		CCS have become a great way for fossil industries to reassure their investors, with a “fallback solution” in case if States eventually decided to adopt <i>hard</i> mechanisms to make emissions drop mandatory (be it fines or taxes). The problem is that most predictive models and commitments (including the IPCC) for a world below the +2°C rise of global temperatures, are calling massively on the use of CCS technics. Despite this, we are nowhere near the commitments that are necessary, in term of CCS development, to reach the Paris Agreement.<ref>“Carbon capture and storage (CCS) is recognised as being vital to least cost pathways for climate change mitigation, and in particular the negative emissions technologies (NETs) that are key to limiting warming to “well below” 2C. However, it has not yet been deployed on the scale understood to be required, owing to a variety of technical, economic and commercial challenges.” <i>Carbon capture and storage (CCS): the way forward</i>, Energy Environ. Sci., 2018, 11, 1062. Published on Royal Society of Chemistry website, 2018. source: https://pubs.rsc.org/en/content/articlehtml/2018/ee/c7ee02342a</ref>

	== Notes ==		== Notes ==

Thesoftprotestdigest: /* Carbon capture and storage is too slow */

2021-01-28T11:36:09Z

Carbon capture and storage is too slow

← Older revision		Revision as of 13:36, 28 January 2021
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	====Carbon capture and storage is too slow====		====Carbon capture and storage is too slow====
	Politics doesn’t seem to be on the way to purely and simply force Carbon capture and storage (CCS) technics to be installed on all carbon intensive industries — from concrete plants to electric power plants burning fossil fuels. Still, <i>soft</i> mechanisms like ETS markets are supposed to play this role without interfering too much with “business as usual”. But economical models show that only a rise of the price for 1 tonne of CO2 above 50€ could possibly force those industries to invest in CCS. So, even if some see the rise of the EU ETS carbon price since 2018 with hope, it ~~is nowhere near enough~~ to cause any drop of GHG emissions worldwide.<ref>(FR) “Le Réveilleur” youtube channel: “La Capture et Séquestration de Carbone pour réduire nos émissions de CO2 - CARBONE#4” (2020) source: https://www.youtube.com/watch?v=AQlqQEhVi1M</ref>		Politics doesn’t seem to be on the way to purely and simply force Carbon capture and storage (CCS) technics to be installed on all carbon intensive industries — from concrete plants to electric power plants burning fossil fuels. Still, <i>soft</i> mechanisms like ETS markets are supposed to play this role without interfering too much with “business as usual”. But economical models show that only a rise of the price for 1 tonne of CO2 above 50€ could possibly force those industries to invest in CCS. So, even if some see the rise of the EU ETS carbon price since 2018 with hope, it needs to grow 70% higher to cause any drop of GHG emissions worldwide.<ref>(FR) “Le Réveilleur” youtube channel: “La Capture et Séquestration de Carbone pour réduire nos émissions de CO2 - CARBONE#4” (2020) source: https://www.youtube.com/watch?v=AQlqQEhVi1M</ref>
	[[File:EU-ETS-carbon-price 2008-2021.jpeg\|thumb\|Thumbnailed image\|EU ETS carbon price variations from its creation to January 2021<ref>See Ember carbon price viewer: https://ember-climate.org/data/carbon-price-viewer/</ref>.]]		[[File:EU-ETS-carbon-price 2008-2021.jpeg\|thumb\|Thumbnailed image\|EU ETS carbon price variations from its creation to January 2021<ref>See Ember carbon price viewer: https://ember-climate.org/data/carbon-price-viewer/</ref>.]]
	CCS have become a great way for fossil industries to reassure their investors, with a “fallback solution” in case if States eventually decided to adopt <i>hard</i> mechanisms to make emissions drop mandatory (be it fines or taxes). The problem is that most predictive models and commitments for a world below the +2°C rise of global temperatures, are calling massively on the use of CCS technics. Despite this, we are nowhere near the commitments that are necessary, in term of CCS development, to reach the Paris Agreement.<ref>“Carbon capture and storage (CCS) is recognised as being vital to least cost pathways for climate change mitigation, and in particular the negative emissions technologies (NETs) that are key to limiting warming to “well below” 2C. However, it has not yet been deployed on the scale understood to be required, owing to a variety of technical, economic and commercial challenges.” <i>Carbon capture and storage (CCS): the way forward</i>, Energy Environ. Sci., 2018, 11, 1062. Published on Royal Society of Chemistry website, 2018. source: https://pubs.rsc.org/en/content/articlehtml/2018/ee/c7ee02342a</ref>		CCS have become a great way for fossil industries to reassure their investors, with a “fallback solution” in case if States eventually decided to adopt <i>hard</i> mechanisms to make emissions drop mandatory (be it fines or taxes). The problem is that most predictive models and commitments for a world below the +2°C rise of global temperatures, are calling massively on the use of CCS technics. Despite this, we are nowhere near the commitments that are necessary, in term of CCS development, to reach the Paris Agreement.<ref>“Carbon capture and storage (CCS) is recognised as being vital to least cost pathways for climate change mitigation, and in particular the negative emissions technologies (NETs) that are key to limiting warming to “well below” 2C. However, it has not yet been deployed on the scale understood to be required, owing to a variety of technical, economic and commercial challenges.” <i>Carbon capture and storage (CCS): the way forward</i>, Energy Environ. Sci., 2018, 11, 1062. Published on Royal Society of Chemistry website, 2018. source: https://pubs.rsc.org/en/content/articlehtml/2018/ee/c7ee02342a</ref>

	== Notes ==		== Notes ==

Thesoftprotestdigest: /* Carbon capture and storage is too slow */

2021-01-28T11:29:43Z

Carbon capture and storage is too slow

← Older revision		Revision as of 13:29, 28 January 2021
Line 120:		Line 120:

	====Carbon capture and storage is too slow====		====Carbon capture and storage is too slow====
	Despite being not correlated with a drop of GHG emissions worldwide, some see the rise of the EU ETS carbon price since 2018 with hope (see [https://ember-climate.org/data/carbon-price-viewer/ Ember carbon price viewer].) Politics ~~are not at all~~ on the way to purely and simply force ~~[https://en.wikipedia.org/wiki/Carbon_capture_and_storage#Sequestration~~ Carbon capture and storage] (CCS) technics to be installed on all carbon intensive industries — from concrete plants to electric power plants burning fossil fuels. Still, <i>soft</i> mechanisms like ETS markets are supposed to play this role without interfering too much with “business as usual”. But economical models show that only a rise of the price for 1 tonne of CO2 above 50€ could possibly force those industries to invest in CCS.<ref>(FR) “Le Réveilleur” youtube channel: “La Capture et Séquestration de Carbone pour réduire nos émissions de CO2 - CARBONE#4” (2020) source: https://www.youtube.com/watch?v=AQlqQEhVi1M</ref>		Politics doesn’t seem to be on the way to purely and simply force Carbon capture and storage (CCS) technics to be installed on all carbon intensive industries — from concrete plants to electric power plants burning fossil fuels. Still, <i>soft</i> mechanisms like ETS markets are supposed to play this role without interfering too much with “business as usual”. But economical models show that only a rise of the price for 1 tonne of CO2 above 50€ could possibly force those industries to invest in CCS. So, even if some see the rise of the EU ETS carbon price since 2018 with hope, it is nowhere near enough to cause any drop of GHG emissions worldwide.<ref>(FR) “Le Réveilleur” youtube channel: “La Capture et Séquestration de Carbone pour réduire nos émissions de CO2 - CARBONE#4” (2020) source: https://www.youtube.com/watch?v=AQlqQEhVi1M</ref>
	[[File:EU-ETS-carbon-~~price_2008~~-2021.~~jpg~~\|thumb\|Thumbnailed image\|EU ETS carbon price variations from its creation to January 2021.]]		[[File:EU-ETS-carbon-price 2008-2021.jpeg\|thumb\|Thumbnailed image\|EU ETS carbon price variations from its creation to January 2021<ref>See Ember carbon price viewer: https://ember-climate.org/data/carbon-price-viewer/</ref>.]]
	CCS have become a great way for fossil industries to reassure their investors, with a “fallback solution” in case if States eventually decided to adopt <i>hard</i> mechanisms to make emissions drop mandatory (be it fines or taxes). The problem is that most predictive models and commitments for a world below the +2°C rise of global temperatures, are calling massively on the use of CCS technics. Despite this, we are nowhere near the commitments that are necessary, in term of CCS development, to reach the Paris Agreement.<ref>“Carbon capture and storage (CCS) is recognised as being vital to least cost pathways for climate change mitigation, and in particular the negative emissions technologies (NETs) that are key to limiting warming to “well below” 2C. However, it has not yet been deployed on the scale understood to be required, owing to a variety of technical, economic and commercial challenges.” <i>Carbon capture and storage (CCS): the way forward</i>, Energy Environ. Sci., 2018, 11, 1062. Published on Royal Society of Chemistry website, 2018. source: https://pubs.rsc.org/en/content/articlehtml/2018/ee/c7ee02342a</ref>		CCS have become a great way for fossil industries to reassure their investors, with a “fallback solution” in case if States eventually decided to adopt <i>hard</i> mechanisms to make emissions drop mandatory (be it fines or taxes). The problem is that most predictive models and commitments for a world below the +2°C rise of global temperatures, are calling massively on the use of CCS technics. Despite this, we are nowhere near the commitments that are necessary, in term of CCS development, to reach the Paris Agreement.<ref>“Carbon capture and storage (CCS) is recognised as being vital to least cost pathways for climate change mitigation, and in particular the negative emissions technologies (NETs) that are key to limiting warming to “well below” 2C. However, it has not yet been deployed on the scale understood to be required, owing to a variety of technical, economic and commercial challenges.” <i>Carbon capture and storage (CCS): the way forward</i>, Energy Environ. Sci., 2018, 11, 1062. Published on Royal Society of Chemistry website, 2018. source: https://pubs.rsc.org/en/content/articlehtml/2018/ee/c7ee02342a</ref>

	== Notes ==		== Notes ==

Thesoftprotestdigest: /* Carbon capture and storage is too slow */

2021-01-28T11:22:59Z

Carbon capture and storage is too slow

← Older revision		Revision as of 13:22, 28 January 2021
Line 120:		Line 120:

	====Carbon capture and storage is too slow====		====Carbon capture and storage is too slow====
	~~[[File:\|thumb\|Thumbnailed image\|.]]~~		Despite being not correlated with a drop of GHG emissions worldwide, some see the rise of the EU ETS carbon price since 2018 with hope (see [https://ember-climate.org/data/carbon-price-viewer/ Ember carbon price viewer].) Politics are not at all on the way to purely and simply force [https://en.wikipedia.org/wiki/Carbon_capture_and_storage#Sequestration Carbon capture and storage] (CCS) technics to be installed on all carbon intensive industries — from concrete plants to electric power plants burning fossil fuels. Still, <i>soft</i> mechanisms like ETS markets are supposed to play this role without interfering too much with “business as usual”. But economical models show that only a rise of the price for 1 tonne of CO2 above 50€ could possibly force those industries to invest in CCS.<ref>(FR) “Le Réveilleur” youtube channel: “La Capture et Séquestration de Carbone pour réduire nos émissions de CO2 - CARBONE#4” (2020) source: https://www.youtube.com/watch?v=AQlqQEhVi1M</ref>
	Despite being not correlated with a drop of GHG emissions worldwide, some see the rise of the EU ETS carbon price since 2018 with hope (see [https://ember-climate.org/data/carbon-price-viewer/ Ember carbon price viewer].) Politics are not at all on the way to purely and simply force [https://en.wikipedia.org/wiki/Carbon_capture_and_storage#Sequestration Carbon capture and storage] (CCS) technics to be installed on all carbon intensive industries — from concrete plants to electric power plants burning fossil fuels. Still, <i>soft</i> mechanisms like ETS markets are supposed to play this role without interfering too much with “business as usual”. But economical models show that only a rise of the price for 1 tonne of CO2 above 50€ could possibly force those industries to invest in CCS.		[[File:EU-ETS-carbon-price_2008-2021.jpg\|thumb\|Thumbnailed image\|EU ETS carbon price variations from its creation to January 2021.]]

	CCS have become a great way for fossil industries to reassure their investors, with a “fallback solution” in case if States eventually decided to adopt <i>hard</i> mechanisms to make emissions drop mandatory (be it fines or taxes). The problem is that most predictive models and commitments for a world below the +2°C rise of global temperatures, are calling massively on the use of CCS technics. Despite this, we are nowhere near the commitments that are necessary, in term of CCS development, to reach the Paris Agreement.<ref>“Carbon capture and storage (CCS) is recognised as being vital to least cost pathways for climate change mitigation, and in particular the negative emissions technologies (NETs) that are key to limiting warming to “well below” 2C. However, it has not yet been deployed on the scale understood to be required, owing to a variety of technical, economic and commercial challenges.” <i>Carbon capture and storage (CCS): the way forward</i>, Energy Environ. Sci., 2018, 11, 1062. Published on Royal Society of Chemistry website, 2018. source: https://pubs.rsc.org/en/content/articlehtml/2018/ee/c7ee02342a</ref>		CCS have become a great way for fossil industries to reassure their investors, with a “fallback solution” in case if States eventually decided to adopt <i>hard</i> mechanisms to make emissions drop mandatory (be it fines or taxes). The problem is that most predictive models and commitments for a world below the +2°C rise of global temperatures, are calling massively on the use of CCS technics. Despite this, we are nowhere near the commitments that are necessary, in term of CCS development, to reach the Paris Agreement.<ref>“Carbon capture and storage (CCS) is recognised as being vital to least cost pathways for climate change mitigation, and in particular the negative emissions technologies (NETs) that are key to limiting warming to “well below” 2C. However, it has not yet been deployed on the scale understood to be required, owing to a variety of technical, economic and commercial challenges.” <i>Carbon capture and storage (CCS): the way forward</i>, Energy Environ. Sci., 2018, 11, 1062. Published on Royal Society of Chemistry website, 2018. source: https://pubs.rsc.org/en/content/articlehtml/2018/ee/c7ee02342a</ref>

	== Notes ==		== Notes ==

Thesoftprotestdigest: /* What is carbon pricing and what concepts stand behind it? */

2021-01-28T11:13:29Z

What is carbon pricing and what concepts stand behind it?

← Older revision		Revision as of 13:13, 28 January 2021
Line 12:		Line 12:
	source: <i>Climate Analysis Indicators Tool</i> from World Ressource Institute, 2017. source: https://www.c2es.org/content/international-emissions/</ref> of industries worldwide by giving a room and a price to carbon on public markets around the world. The economic theory behind this idea is that we should consider “externalities” in our economic system: the unexpected effects of any human activity should be taken into account in the value they create/destroy, despite the fact that it has no “direct” positive or negative impact on the activity: for example, an hotel or a coal-fired power plant opening next to a small town would have different effects on the baker’s like and business in this town; and this externality would be economically taken into account or not, depending on the political choices made in this town’s government. As carbon emissions would be considered as a negative externality that has a cost, in the long run to society, the emitter is levied from an amount of value that is indexed and proportionate to his emissions. To lower emissions with hope to mitigate global warming; carbon emissions cost never ceases to increase while permits to emit are gradually limited.		source: <i>Climate Analysis Indicators Tool</i> from World Ressource Institute, 2017. source: https://www.c2es.org/content/international-emissions/</ref> of industries worldwide by giving a room and a price to carbon on public markets around the world. The economic theory behind this idea is that we should consider “externalities” in our economic system: the unexpected effects of any human activity should be taken into account in the value they create/destroy, despite the fact that it has no “direct” positive or negative impact on the activity: for example, an hotel or a coal-fired power plant opening next to a small town would have different effects on the baker’s like and business in this town; and this externality would be economically taken into account or not, depending on the political choices made in this town’s government. As carbon emissions would be considered as a negative externality that has a cost, in the long run to society, the emitter is levied from an amount of value that is indexed and proportionate to his emissions. To lower emissions with hope to mitigate global warming; carbon emissions cost never ceases to increase while permits to emit are gradually limited.
	You can get from the last sentence that there are 2 ways to monetize carbon: the <u>carbon tax system</u> and the <u>carbon trading system</u>.		You can get from the last sentence that there are 2 ways to monetize carbon: the <u>carbon tax system</u> and the <u>carbon trading system</u>.
	===The carbon tax===		====The carbon tax====
	The carbon tax is as simple as it gets: you usually levy this tax on the carbon content of fuels<ref>In 2019, carbon taxes on fuel were of the following amount for those countries:		The carbon tax is as simple as it gets: you usually levy this tax on the carbon content of fuels<ref>In 2019, carbon taxes on fuel were of the following amount for those countries:
	*124$/tCO2 in Sweden.		*124$/tCO2 in Sweden.
Line 18:		Line 18:
	*2,6$/tCO2 in Japan.		*2,6$/tCO2 in Japan.
	source: <i>Global Carbon Account 2019</i>,Institute for Climate Economics (I4CE), 2019. source: https://www.i4ce.org/wp-core/wp-content/uploads/2019/05/i4ce-PrixCarbon-VA.pdf</ref>, meaning that citizens and companies running cars, trucks, machines, etc. on fossil fuels would get it at an increasing price<ref>Only if the ressource price of extraction from the soil doesn’t drop for some reason: the price could stagnate or even decrease, regardless of taxes.</ref> — the same way it was done for tobacco in numerous countries. It will discourage fossil fuel use in favour of less emitting energy sources such as wind, solar, geothermal or nuclear fission; by making them more competitive.		source: <i>Global Carbon Account 2019</i>,Institute for Climate Economics (I4CE), 2019. source: https://www.i4ce.org/wp-core/wp-content/uploads/2019/05/i4ce-PrixCarbon-VA.pdf</ref>, meaning that citizens and companies running cars, trucks, machines, etc. on fossil fuels would get it at an increasing price<ref>Only if the ressource price of extraction from the soil doesn’t drop for some reason: the price could stagnate or even decrease, regardless of taxes.</ref> — the same way it was done for tobacco in numerous countries. It will discourage fossil fuel use in favour of less emitting energy sources such as wind, solar, geothermal or nuclear fission; by making them more competitive.
	===The carbon emission trading system===		====The carbon emission trading system====
	The carbon emission trading system, on the other hand, is trickier to get: a given government will first estimate the carbon emissions (in tons) of the whole emitting industries active in its territory during a given time (a year). Based on those datas, the government can create an Emissions Trading Scheme (ETS) by 2 ways:		The carbon emission trading system, on the other hand, is trickier to get: a given government will first estimate the carbon emissions (in tons) of the whole emitting industries active in its territory during a given time (a year). Based on those datas, the government can create an Emissions Trading Scheme (ETS) by 2 ways:
	:: - The government allocates each company with an annual emissions permit, where the sum of all permits account for less carbon emissions than the previous year, in order to reach their decreasing goals, year after year. In that case, what is call an allowance (permit to emit) would be freely distributed to companies, depending on their previous year emissions. If they decide to emit more that they were allowed to, they can buy allowances on the carbon market. Those allowances will be traded with companies who managed to lower emissions even more than the government expected.<ref>But not only: the offset system makes it possible to create allowances that were not distributed by the government. We will come back to it later.</ref>		:: - The government allocates each company with an annual emissions permit, where the sum of all permits account for less carbon emissions than the previous year, in order to reach their decreasing goals, year after year. In that case, what is call an allowance (permit to emit) would be freely distributed to companies, depending on their previous year emissions. If they decide to emit more that they were allowed to, they can buy allowances on the carbon market. Those allowances will be traded with companies who managed to lower emissions even more than the government expected.<ref>But not only: the offset system makes it possible to create allowances that were not distributed by the government. We will come back to it later.</ref>

Thesoftprotestdigest: /* What is carbon pricing and what concepts stand behind it? */

2021-01-28T11:13:15Z

What is carbon pricing and what concepts stand behind it?

← Older revision		Revision as of 13:13, 28 January 2021
Line 12:		Line 12:
	source: <i>Climate Analysis Indicators Tool</i> from World Ressource Institute, 2017. source: https://www.c2es.org/content/international-emissions/</ref> of industries worldwide by giving a room and a price to carbon on public markets around the world. The economic theory behind this idea is that we should consider “externalities” in our economic system: the unexpected effects of any human activity should be taken into account in the value they create/destroy, despite the fact that it has no “direct” positive or negative impact on the activity: for example, an hotel or a coal-fired power plant opening next to a small town would have different effects on the baker’s like and business in this town; and this externality would be economically taken into account or not, depending on the political choices made in this town’s government. As carbon emissions would be considered as a negative externality that has a cost, in the long run to society, the emitter is levied from an amount of value that is indexed and proportionate to his emissions. To lower emissions with hope to mitigate global warming; carbon emissions cost never ceases to increase while permits to emit are gradually limited.		source: <i>Climate Analysis Indicators Tool</i> from World Ressource Institute, 2017. source: https://www.c2es.org/content/international-emissions/</ref> of industries worldwide by giving a room and a price to carbon on public markets around the world. The economic theory behind this idea is that we should consider “externalities” in our economic system: the unexpected effects of any human activity should be taken into account in the value they create/destroy, despite the fact that it has no “direct” positive or negative impact on the activity: for example, an hotel or a coal-fired power plant opening next to a small town would have different effects on the baker’s like and business in this town; and this externality would be economically taken into account or not, depending on the political choices made in this town’s government. As carbon emissions would be considered as a negative externality that has a cost, in the long run to society, the emitter is levied from an amount of value that is indexed and proportionate to his emissions. To lower emissions with hope to mitigate global warming; carbon emissions cost never ceases to increase while permits to emit are gradually limited.
	You can get from the last sentence that there are 2 ways to monetize carbon: the <u>carbon tax system</u> and the <u>carbon trading system</u>.		You can get from the last sentence that there are 2 ways to monetize carbon: the <u>carbon tax system</u> and the <u>carbon trading system</u>.
	~~#<u>~~The carbon tax~~</u>~~ is as simple as it gets: you usually levy this tax on the carbon content of fuels<ref>In 2019, carbon taxes on fuel were of the following amount for those countries:		===The carbon tax===
			The carbon tax is as simple as it gets: you usually levy this tax on the carbon content of fuels<ref>In 2019, carbon taxes on fuel were of the following amount for those countries:
	*124$/tCO2 in Sweden.		*124$/tCO2 in Sweden.
	*51$/tCO2 in France.		*51$/tCO2 in France.
	*2,6$/tCO2 in Japan.		*2,6$/tCO2 in Japan.
	source: <i>Global Carbon Account 2019</i>,Institute for Climate Economics (I4CE), 2019. source: https://www.i4ce.org/wp-core/wp-content/uploads/2019/05/i4ce-PrixCarbon-VA.pdf</ref>, meaning that citizens and companies running cars, trucks, machines, etc. on fossil fuels would get it at an increasing price<ref>Only if the ressource price of extraction from the soil doesn’t drop for some reason: the price could stagnate or even decrease, regardless of taxes.</ref> — the same way it was done for tobacco in numerous countries. It will discourage fossil fuel use in favour of less emitting energy sources such as wind, solar, geothermal or nuclear fission; by making them more competitive.		source: <i>Global Carbon Account 2019</i>,Institute for Climate Economics (I4CE), 2019. source: https://www.i4ce.org/wp-core/wp-content/uploads/2019/05/i4ce-PrixCarbon-VA.pdf</ref>, meaning that citizens and companies running cars, trucks, machines, etc. on fossil fuels would get it at an increasing price<ref>Only if the ressource price of extraction from the soil doesn’t drop for some reason: the price could stagnate or even decrease, regardless of taxes.</ref> — the same way it was done for tobacco in numerous countries. It will discourage fossil fuel use in favour of less emitting energy sources such as wind, solar, geothermal or nuclear fission; by making them more competitive.
	~~#<u>~~The carbon emission trading system~~</u>~~, on the other hand, is trickier to get: a given government will first estimate the carbon emissions (in tons) of the whole emitting industries active in its territory during a given time (a year). Based on those datas, the government can create an Emissions Trading Scheme (ETS) by 2 ways:		===The carbon emission trading system===
			The carbon emission trading system, on the other hand, is trickier to get: a given government will first estimate the carbon emissions (in tons) of the whole emitting industries active in its territory during a given time (a year). Based on those datas, the government can create an Emissions Trading Scheme (ETS) by 2 ways:
	:: - The government allocates each company with an annual emissions permit, where the sum of all permits account for less carbon emissions than the previous year, in order to reach their decreasing goals, year after year. In that case, what is call an allowance (permit to emit) would be freely distributed to companies, depending on their previous year emissions. If they decide to emit more that they were allowed to, they can buy allowances on the carbon market. Those allowances will be traded with companies who managed to lower emissions even more than the government expected.<ref>But not only: the offset system makes it possible to create allowances that were not distributed by the government. We will come back to it later.</ref>		:: - The government allocates each company with an annual emissions permit, where the sum of all permits account for less carbon emissions than the previous year, in order to reach their decreasing goals, year after year. In that case, what is call an allowance (permit to emit) would be freely distributed to companies, depending on their previous year emissions. If they decide to emit more that they were allowed to, they can buy allowances on the carbon market. Those allowances will be traded with companies who managed to lower emissions even more than the government expected.<ref>But not only: the offset system makes it possible to create allowances that were not distributed by the government. We will come back to it later.</ref>
	:: - We start with this same system of an allowance market which “size” is decided every year by the government, depending on its emissions decrease goals. However, the allowances are auctioned every year on a given platform. Allowances prices varies greatly depending on the market<ref>In 2019, the price of a ton of carbon traded was of the following amount for those countries:		:: - We start with this same system of an allowance market which “size” is decided every year by the government, depending on its emissions decrease goals. However, the allowances are auctioned every year on a given platform. Allowances prices varies greatly depending on the market<ref>In 2019, the price of a ton of carbon traded was of the following amount for those countries:

Thesoftprotestdigest at 11:12, 28 January 2021

2021-01-28T11:12:12Z

Thesoftprotestdigest: /* Carbon capture and storage is too slow */

2021-01-28T11:10:36Z

Carbon capture and storage is too slow

← Older revision		Revision as of 13:10, 28 January 2021
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	Despite being not correlated with a drop of GHG emissions worldwide, some see the rise of the EU ETS carbon price since 2018 with hope (see [https://ember-climate.org/data/carbon-price-viewer/ Ember carbon price viewer].) Politics are not at all on the way to purely and simply force [https://en.wikipedia.org/wiki/Carbon_capture_and_storage#Sequestration Carbon capture and storage] (CCS) technics to be installed on all carbon intensive industries — from concrete plants to electric power plants burning fossil fuels. Still, <i>soft</i> mechanisms like ETS markets are supposed to play this role without interfering too much with “business as usual”. But economical models show that only a rise of the price for 1 tonne of CO2 above 50€ could possibly force those industries to invest in CCS.		Despite being not correlated with a drop of GHG emissions worldwide, some see the rise of the EU ETS carbon price since 2018 with hope (see [https://ember-climate.org/data/carbon-price-viewer/ Ember carbon price viewer].) Politics are not at all on the way to purely and simply force [https://en.wikipedia.org/wiki/Carbon_capture_and_storage#Sequestration Carbon capture and storage] (CCS) technics to be installed on all carbon intensive industries — from concrete plants to electric power plants burning fossil fuels. Still, <i>soft</i> mechanisms like ETS markets are supposed to play this role without interfering too much with “business as usual”. But economical models show that only a rise of the price for 1 tonne of CO2 above 50€ could possibly force those industries to invest in CCS.

	CCS have become a great way for fossil industries to reassure their investors, with a “fallback solution” in case if States eventually decided to adopt <i>hard</i> mechanisms to make emissions drop mandatory (be it fines or taxes). The problem is that most predictive models and commitments for a world below the +2°C rise of global temperatures, are calling massively on the use of CCS technics. Despite this, we are nowhere near the commitments that are necessary, in term of CCS development, to reach the Paris Agreement.<ref>“Carbon capture and storage (CCS) is recognised as being vital to least cost pathways for climate change mitigation, and in particular the negative emissions technologies (NETs) that are key to limiting warming to “well below” 2C. However, it has not yet been deployed on the scale understood to be required, owing to a variety of technical, economic and commercial challenges.” ~~[https://pubs.rsc.org/en/content/articlehtml/2018/ee/c7ee02342a~~ <i>Carbon capture and storage (CCS): the way forward</i>], Energy Environ. Sci., 2018, 11, 1062. Published on Royal Society of Chemistry website, 2018.</ref>		CCS have become a great way for fossil industries to reassure their investors, with a “fallback solution” in case if States eventually decided to adopt <i>hard</i> mechanisms to make emissions drop mandatory (be it fines or taxes). The problem is that most predictive models and commitments for a world below the +2°C rise of global temperatures, are calling massively on the use of CCS technics. Despite this, we are nowhere near the commitments that are necessary, in term of CCS development, to reach the Paris Agreement.<ref>“Carbon capture and storage (CCS) is recognised as being vital to least cost pathways for climate change mitigation, and in particular the negative emissions technologies (NETs) that are key to limiting warming to “well below” 2C. However, it has not yet been deployed on the scale understood to be required, owing to a variety of technical, economic and commercial challenges.” <i>Carbon capture and storage (CCS): the way forward</i>, Energy Environ. Sci., 2018, 11, 1062. Published on Royal Society of Chemistry website, 2018. source: https://pubs.rsc.org/en/content/articlehtml/2018/ee/c7ee02342a</ref>

	== Notes ==		== Notes ==

← Older revision		Revision as of 16:51, 9 March 2022
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	[[File:Carbon-Market-Watch_cement-industry-report-cover.~~png~~\|thumb\|Thumbnailed image\|Carbon Market Watch cement industry report cover, in 2016.]]		[[File:Carbon-Market-Watch_cement-industry-report-cover.jpg\|thumb\|Thumbnailed image\|Carbon Market Watch cement industry report cover, in 2016.]]
	Despite the fact that carbon pricing has been the main and most ambitious undertaking to mitigate climate change since the beginning of our century; it is widely unknown or misunderstood. It must primary be due to both of its confusing different forms, but also its tremendous complexity that never stopped to evolve since it was first implemented in 2005 in the European Union (EU). What this page wishes to propose is not only an accessible description of what carbon pricing is, without getting lost in the economic gibberish; as our goal was to analyse the effects, both positive and negative, that carbon princing is said to have on citizens, companies, governments and of course, climate (through CO2 emissions cut).		Despite the fact that carbon pricing has been the main and most ambitious undertaking to mitigate climate change since the beginning of our century; it is widely unknown or misunderstood. It must primary be due to both of its confusing different forms, but also its tremendous complexity that never stopped to evolve since it was first implemented in 2005 in the European Union (EU). What this page wishes to propose is not only an accessible description of what carbon pricing is, without getting lost in the economic gibberish; as our goal was to analyse the effects, both positive and negative, that carbon princing is said to have on citizens, companies, governments and of course, climate (through CO2 emissions cut).

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	source: https://en.wikipedia.org/wiki/Clean_Development_Mechanism</ref>, which are very tricky to evaluate on the long run (a solar energy project or the renewal of a facility to emit less may not always be successful) and may benefit to developed countries getting “cheap” offsets from low-cost projects abroad. Moreover, the risk of fraud is high, in the form of “non-additional” credits: it means that the offset project will have taken place anyway, without the help from an interested carbon emitter. In this case, money is only going from hands to hands without financing anything else than pollution. This would even suggest that a wide part of carbon offsets do not represent actual emissions cuts, allowing companies to skew their emissions reduction easily.		source: https://en.wikipedia.org/wiki/Clean_Development_Mechanism</ref>, which are very tricky to evaluate on the long run (a solar energy project or the renewal of a facility to emit less may not always be successful) and may benefit to developed countries getting “cheap” offsets from low-cost projects abroad. Moreover, the risk of fraud is high, in the form of “non-additional” credits: it means that the offset project will have taken place anyway, without the help from an interested carbon emitter. In this case, money is only going from hands to hands without financing anything else than pollution. This would even suggest that a wide part of carbon offsets do not represent actual emissions cuts, allowing companies to skew their emissions reduction easily.

	[[File:emission-vs-free-allowances_2013_carbonleakage_evidence_project_ecorys.~~png~~\|thumb\|Thumbnailed image\|Emission versus free allowances in the steel industry. Carbon-leakage evidence project, Ecorys, 2013, p.33.]]		[[File:emission-vs-free-allowances_2013_carbonleakage_evidence_project_ecorys.jpg\|thumb\|Thumbnailed image\|Emission versus free allowances in the steel industry. Carbon-leakage evidence project, Ecorys, 2013, p.33.]]
	Exaggerating the carbon benefits of an offset is a common practice too<ref>Take for instance the HFC-23 GHG destruction model that made China built 18 new refrigerant manufacturing plants equipped with HFC-23 incinerators for $100 millions, thus generating $5,7 billions in CDM offsets credits. This type of offset credit has since been eliminated by EU officials (in 2011).		Exaggerating the carbon benefits of an offset is a common practice too<ref>Take for instance the HFC-23 GHG destruction model that made China built 18 new refrigerant manufacturing plants equipped with HFC-23 incinerators for $100 millions, thus generating $5,7 billions in CDM offsets credits. This type of offset credit has since been eliminated by EU officials (in 2011).
	source: https://www.carbontax.org/carbon-tax-vs-the-alternatives/offsets/</ref>; and same goes with what is called “carbon leakage” scam: companies are threatening governments, pretending they will close plants and delocalize in countries with no or less costly carbon pricing systems. Governments are then weakened when it comes to the negotiation of free allowances, but all this claim that carbon pricing could disadvantage companies dangerously has never been proven right in years. EU commissioned reports show no proof of carbon leakage<ref>See those different documents:		source: https://www.carbontax.org/carbon-tax-vs-the-alternatives/offsets/</ref>; and same goes with what is called “carbon leakage” scam: companies are threatening governments, pretending they will close plants and delocalize in countries with no or less costly carbon pricing systems. Governments are then weakened when it comes to the negotiation of free allowances, but all this claim that carbon pricing could disadvantage companies dangerously has never been proven right in years. EU commissioned reports show no proof of carbon leakage<ref>See those different documents:
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	===Carbon taxes===		===Carbon taxes===

	[[File:carbon-intensities-of-connected-grids_2020_how_electricity_generated_from_coal_is_leaking_into_the_eu_sandbag.~~png~~\|thumb\|Thumbnailed image\|Carbon intensities of connected grids in EU.]]		[[File:carbon-intensities-of-connected-grids_2020_how_electricity_generated_from_coal_is_leaking_into_the_eu_sandbag.jpg\|thumb\|Thumbnailed image\|Carbon intensities of connected grids in EU.]]
	[[File:EU-planned-electricity-connection-2020_how_electricity_generated_from_coal_is_leaking_into_the_eu_sandbag.~~png~~\|thumb\|Thumbnailed image\|European Union planned electricity connection in 2020.]]		[[File:EU-planned-electricity-connection-2020_how_electricity_generated_from_coal_is_leaking_into_the_eu_sandbag.jpg\|thumb\|Thumbnailed image\|European Union planned electricity connection in 2020.]]
	If we dive in the flaws from the more straightforward method, carbon tax, we can see how it compares to emissions trading. First, one could think that carbon taxes are less “citizen friendly” than emissions trading, because they directly impact goods price, but they are harder for companies to dodge, thus less expensive to governments and citizens, while generating more revenues worldwide. In fact, ecologists often favor carbon tax systems on emissions trading: James E. Hansen for instance, an influent former NASA scientist studying global warming since the 70s, advocated for a carbon tax in an open letter to the Obama presidential couple<ref>James Hansen, <i>An open letter to the president and 1st lady from the nation’s top climate scientist</i>, 2009, Grist website.		If we dive in the flaws from the more straightforward method, carbon tax, we can see how it compares to emissions trading. First, one could think that carbon taxes are less “citizen friendly” than emissions trading, because they directly impact goods price, but they are harder for companies to dodge, thus less expensive to governments and citizens, while generating more revenues worldwide. In fact, ecologists often favor carbon tax systems on emissions trading: James E. Hansen for instance, an influent former NASA scientist studying global warming since the 70s, advocated for a carbon tax in an open letter to the Obama presidential couple<ref>James Hansen, <i>An open letter to the president and 1st lady from the nation’s top climate scientist</i>, 2009, Grist website.
	source: https://grist.org/article/dear-barack-and-michelle/</ref> in 2009, when emissions trading was not even implemented for long enough to discredit it. According to Hansen, emissions trading will allow “business as usual” for emitting industries, thanks to its ultra-liberal dimension; while a tax will appropriately affects all products that use fossile fuels, from cars to food. But as Hansen points out, “the public will support the tax if it is returned to them, equal shares on a per capita basis, deposited monthly in bank accounts”. He asks for absolutely no revenues of this tax to ends up in government pockets, and some says it could allow for a basic income to exist.		source: https://grist.org/article/dear-barack-and-michelle/</ref> in 2009, when emissions trading was not even implemented for long enough to discredit it. According to Hansen, emissions trading will allow “business as usual” for emitting industries, thanks to its ultra-liberal dimension; while a tax will appropriately affects all products that use fossile fuels, from cars to food. But as Hansen points out, “the public will support the tax if it is returned to them, equal shares on a per capita basis, deposited monthly in bank accounts”. He asks for absolutely no revenues of this tax to ends up in government pockets, and some says it could allow for a basic income to exist.
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	source: https://www.nature.com/news/prove-paris-was-more-than-paper-promises-1.22378</ref>		source: https://www.nature.com/news/prove-paris-was-more-than-paper-promises-1.22378</ref>

	[[File:greta-thunberg_WordEconomicForum-davos_2020.~~png~~\|thumb\|Thumbnailed image\|Activist Greta Thunberg at Word Economic Forum in Davos, Switzerland, 2020.]]		[[File:greta-thunberg_WordEconomicForum-davos_2020.jpg\|thumb\|Thumbnailed image\|Activist Greta Thunberg at Word Economic Forum in Davos, Switzerland, 2020.]]
	Nevertheless, according to European Commission, the GHG emissions of all Member States were reduced by 23% between 1990 and 2018; and they might be on-track to reduce furthermore by at least 40% by 2030 and net-zero emissions by 2050 (2015 Paris Agreement commitment). From 2017 to 2018 for instance, emissions declined by 2%, most significantly in sectors covered by EU ETS.<ref>EU Commission website, Progress made in cutting emissions, 2019.		Nevertheless, according to European Commission, the GHG emissions of all Member States were reduced by 23% between 1990 and 2018; and they might be on-track to reduce furthermore by at least 40% by 2030 and net-zero emissions by 2050 (2015 Paris Agreement commitment). From 2017 to 2018 for instance, emissions declined by 2%, most significantly in sectors covered by EU ETS.<ref>EU Commission website, Progress made in cutting emissions, 2019.
	source: https://ec.europa.eu/clima/policies/strategies/progress_en</ref> However, a large amount of CO2 is embedded in traded goods, making countries able to consume more emissions that they actually produce.<ref>Nature website, <i>Prove paris was more than paper promises</i>, several scientists, 2017.		source: https://ec.europa.eu/clima/policies/strategies/progress_en</ref> However, a large amount of CO2 is embedded in traded goods, making countries able to consume more emissions that they actually produce.<ref>Nature website, <i>Prove paris was more than paper promises</i>, several scientists, 2017.
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	==To conclude==		==To conclude==

	[[File:illustration_larry-lohmann_carry-on-polluting_NewScientist-2006.~~png~~\|thumb\|Thumbnailed image\|Illustration (unknown author) published in New Scientist, 2006: “Carry on polluting”, Larry Lohmann.]]		[[File:illustration_larry-lohmann_carry-on-polluting_NewScientist-2006.jpg\|thumb\|Thumbnailed image\|Illustration (unknown author) published in New Scientist, 2006: “Carry on polluting”, Larry Lohmann.]]
	The assumption that economic growth is always correlated to a minimum of CO2 emissions growth lays at the heart of carbon pricing, since it was never hidden that its goal is to mitigate climate change with the least negative effects on global markets. It seems obvious for European Commission to compare Europe’s reductions (-23%) with its economic growth (+61%); to show what “tour de force” it accomplished.<ref>EU Commission website, Progress made in cutting emissions, 2019.		The assumption that economic growth is always correlated to a minimum of CO2 emissions growth lays at the heart of carbon pricing, since it was never hidden that its goal is to mitigate climate change with the least negative effects on global markets. It seems obvious for European Commission to compare Europe’s reductions (-23%) with its economic growth (+61%); to show what “tour de force” it accomplished.<ref>EU Commission website, Progress made in cutting emissions, 2019.
	source: https://ec.europa.eu/clima/policies/strategies/progress_en</ref> Accordingly, studies diverge about the effects of 2008-2009 global financial crisis (loss of economic growth) on carbon emissions. On one hand, emissions decrease in the US were believed to be caused by gas energy transition, but are suspected to be caused by the crisis.<ref>Climate Central Website, <i>Recession caused U.S. emissions drop, study says</i>, Bobby Magill, 2015.		source: https://ec.europa.eu/clima/policies/strategies/progress_en</ref> Accordingly, studies diverge about the effects of 2008-2009 global financial crisis (loss of economic growth) on carbon emissions. On one hand, emissions decrease in the US were believed to be caused by gas energy transition, but are suspected to be caused by the crisis.<ref>Climate Central Website, <i>Recession caused U.S. emissions drop, study says</i>, Bobby Magill, 2015.

← Older revision		Revision as of 13:12, 28 January 2021
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	Because carbon is the atmospheric greenhouse gas that has the overall biggest impact on global warming<ref>Atmospheric CO2 is not the most impactful gas per ton in the air: methane, among others, has a global warming potential 84 times greater than CO2 for 20 years, but methane lowest concentration in the Earth’s atmosphere makes it contribute less to global warming (4-9% contribution). “Greenhouse gas”, Wikipedia Page, 2020.		Because carbon is the atmospheric greenhouse gas that has the overall biggest impact on global warming<ref>Atmospheric CO2 is not the most impactful gas per ton in the air: methane, among others, has a global warming potential 84 times greater than CO2 for 20 years, but methane lowest concentration in the Earth’s atmosphere makes it contribute less to global warming (4-9% contribution). “Greenhouse gas”, Wikipedia Page, 2020.
	source: https://en.wikipedia.org/wiki/Greenhouse_gas#Global_warming_potential</ref>, it has been considered as a good solution to tackle the emissions<ref>In 2013, industrial processes account for 6% of anthropogenic emissions, while manufacturing and construction account for 12,4% of emissions. As carbon market also applies to the energy sector in general, it could affect more than 80% of our emissions.		source: https://en.wikipedia.org/wiki/Greenhouse_gas#Global_warming_potential</ref>, it has been considered as a good solution to tackle the emissions<ref>In 2013, industrial processes account for 6% of anthropogenic emissions, while manufacturing and construction account for 12,4% of emissions. As carbon market also applies to the energy sector in general, it could affect more than 80% of our emissions.
	source: <i>Climate Analysis Indicators Tool</i> from World Ressource Institute, 2017.		source: <i>Climate Analysis Indicators Tool</i> from World Ressource Institute, 2017. source: https://www.c2es.org/content/international-emissions/</ref> of industries worldwide by giving a room and a price to carbon on public markets around the world. The economic theory behind this idea is that we should consider “externalities” in our economic system: the unexpected effects of any human activity should be taken into account in the value they create/destroy, despite the fact that it has no “direct” positive or negative impact on the activity: for example, an hotel or a coal-fired power plant opening next to a small town would have different effects on the baker’s like and business in this town; and this externality would be economically taken into account or not, depending on the political choices made in this town’s government. As carbon emissions would be considered as a negative externality that has a cost, in the long run to society, the emitter is levied from an amount of value that is indexed and proportionate to his emissions. To lower emissions with hope to mitigate global warming; carbon emissions cost never ceases to increase while permits to emit are gradually limited.
	https://www.c2es.org/content/international-emissions/</ref> of industries worldwide by giving a room and a price to carbon on public markets around the world. The economic theory behind this idea is that we should consider “externalities” in our economic system: the unexpected effects of any human activity should be taken into account in the value they create/destroy, despite the fact that it has no “direct” positive or negative impact on the activity: for example, an hotel or a coal-fired power plant opening next to a small town would have different effects on the baker’s like and business in this town; and this externality would be economically taken into account or not, depending on the political choices made in this town’s government. As carbon emissions would be considered as a negative externality that has a cost, in the long run to society, the emitter is levied from an amount of value that is indexed and proportionate to his emissions. To lower emissions with hope to mitigate global warming; carbon emissions cost never ceases to increase while permits to emit are gradually limited.
	You can get from the last sentence that there are 2 ways to monetize carbon: the <u>carbon tax system</u> and the <u>carbon trading system</u>.		You can get from the last sentence that there are 2 ways to monetize carbon: the <u>carbon tax system</u> and the <u>carbon trading system</u>.
	#<u>The carbon tax</u> is as simple as it gets: you usually levy this tax on the carbon content of fuels<ref>In 2019, carbon taxes on fuel were of the following amount for those countries:		#<u>The carbon tax</u> is as simple as it gets: you usually levy this tax on the carbon content of fuels<ref>In 2019, carbon taxes on fuel were of the following amount for those countries:
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	*51$/tCO2 in France.		*51$/tCO2 in France.
	*2,6$/tCO2 in Japan.		*2,6$/tCO2 in Japan.
	source: <i>Global Carbon Account 2019</i>,Institute for Climate Economics (I4CE), 2019.		source: <i>Global Carbon Account 2019</i>,Institute for Climate Economics (I4CE), 2019. source: https://www.i4ce.org/wp-core/wp-content/uploads/2019/05/i4ce-PrixCarbon-VA.pdf</ref>, meaning that citizens and companies running cars, trucks, machines, etc. on fossil fuels would get it at an increasing price<ref>Only if the ressource price of extraction from the soil doesn’t drop for some reason: the price could stagnate or even decrease, regardless of taxes.</ref> — the same way it was done for tobacco in numerous countries. It will discourage fossil fuel use in favour of less emitting energy sources such as wind, solar, geothermal or nuclear fission; by making them more competitive.
	https://www.i4ce.org/wp-core/wp-content/uploads/2019/05/i4ce-PrixCarbon-VA.pdf</ref>, meaning that citizens and companies running cars, trucks, machines, etc. on fossil fuels would get it at an increasing price<ref>Only if the ressource price of extraction from the soil doesn’t drop for some reason: the price could stagnate or even decrease, regardless of taxes.</ref> — the same way it was done for tobacco in numerous countries. It will discourage fossil fuel use in favour of less emitting energy sources such as wind, solar, geothermal or nuclear fission; by making them more competitive.
	#<u>The carbon emission trading system</u>, on the other hand, is trickier to get: a given government will first estimate the carbon emissions (in tons) of the whole emitting industries active in its territory during a given time (a year). Based on those datas, the government can create an Emissions Trading Scheme (ETS) by 2 ways:		#<u>The carbon emission trading system</u>, on the other hand, is trickier to get: a given government will first estimate the carbon emissions (in tons) of the whole emitting industries active in its territory during a given time (a year). Based on those datas, the government can create an Emissions Trading Scheme (ETS) by 2 ways:
	:: - The government allocates each company with an annual emissions permit, where the sum of all permits account for less carbon emissions than the previous year, in order to reach their decreasing goals, year after year. In that case, what is call an allowance (permit to emit) would be freely distributed to companies, depending on their previous year emissions. If they decide to emit more that they were allowed to, they can buy allowances on the carbon market. Those allowances will be traded with companies who managed to lower emissions even more than the government expected.<ref>But not only: the offset system makes it possible to create allowances that were not distributed by the government. We will come back to it later.</ref>		:: - The government allocates each company with an annual emissions permit, where the sum of all permits account for less carbon emissions than the previous year, in order to reach their decreasing goals, year after year. In that case, what is call an allowance (permit to emit) would be freely distributed to companies, depending on their previous year emissions. If they decide to emit more that they were allowed to, they can buy allowances on the carbon market. Those allowances will be traded with companies who managed to lower emissions even more than the government expected.<ref>But not only: the offset system makes it possible to create allowances that were not distributed by the government. We will come back to it later.</ref>
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	*8,9$/tCO2 for Beijing pilot ETS.		*8,9$/tCO2 for Beijing pilot ETS.
	*4$/tCO2 for the North-East states of USA (RGGI ETS).		*4$/tCO2 for the North-East states of USA (RGGI ETS).
	source: <i>Global Carbon Account 2019</i>, Institute for Climate Economics (I4CE), 2019.		source: <i>Global Carbon Account 2019</i>, Institute for Climate Economics (I4CE), 2019. source: https://www.i4ce.org/wp-core/wp-content/uploads/2019/05/i4ce-PrixCarbon-VA.pdf</ref>, but no extra permit to emit is given for free. This method gains more trust than free allowances, as it “puts into practice the principle that the polluter should pay”<ref>Quote from EU ETS web page. It states the shifting for a bigger share of auctioned allowances, following scandals and market stabilisation.
	https://www.i4ce.org/wp-core/wp-content/uploads/2019/05/i4ce-PrixCarbon-VA.pdf</ref>, but no extra permit to emit is given for free. This method gains more trust than free allowances, as it “puts into practice the principle that the polluter should pay”<ref>Quote from EU ETS web page. It states the shifting for a bigger share of auctioned allowances, following scandals and market stabilisation.
	source: https://ec.europa.eu/clima/policies/ets/auctioning_en</ref> Both options are now used by some governments, as free allowance is now seen by newcomers as a soft transition towards auctioned allowances.		source: https://ec.europa.eu/clima/policies/ets/auctioning_en</ref> Both options are now used by some governments, as free allowance is now seen by newcomers as a soft transition towards auctioned allowances.
	[[File:Article-02-c-2015_Adoption-ParisAgreements_UN.jpg\|thumb\|Thumbnailed image\|Adoption of the Paris Agreement, Article 02, (c), UNFCC, 2015, p.22.]]		[[File:Article-02-c-2015_Adoption-ParisAgreements_UN.jpg\|thumb\|Thumbnailed image\|Adoption of the Paris Agreement, Article 02, (c), UNFCC, 2015, p.22.]]
	Carbon pricing continues to grow with new countries joining: as of 2019, 25 carbon taxes and 26 Emissions Trading Schemes were operating worldwide, generating $45B in revenues with respectively 52% from carbon taxes and 48% from ETS.<ref>source: <i>Global Carbon Account 2019</i>, Institute for Climate Economics (I4CE), 2019.		Carbon pricing continues to grow with new countries joining: as of 2019, 25 carbon taxes and 26 Emissions Trading Schemes were operating worldwide, generating $45B in revenues with respectively 52% from carbon taxes and 48% from ETS.<ref>source: <i>Global Carbon Account 2019</i>, Institute for Climate Economics (I4CE), 2019. soource: https://www.i4ce.org/wp-core/wp-content/uploads/2019/05/i4ce-PrixCarbon-VA.pdf</ref> It is still considered today that one of the main efforts to mitigate climate change would come from finance mechanisms. “Making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development”<ref>Adoption of the Paris Agreement, Article 02, (c), UNFCC, 2015.
	https://www.i4ce.org/wp-core/wp-content/uploads/2019/05/i4ce-PrixCarbon-VA.pdf</ref> It is still considered today that one of the main efforts to mitigate climate change would come from finance mechanisms. “Making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development”<ref>Adoption of the Paris Agreement, Article 02, (c), UNFCC, 2015.
	source: https://unfccc.int/resource/docs/2015/cop21/eng/l09r01.pdf</ref> was one of the objectives of the 2015 Paris Agreement, following Kyoto Protocol.		source: https://unfccc.int/resource/docs/2015/cop21/eng/l09r01.pdf</ref> was one of the objectives of the 2015 Paris Agreement, following Kyoto Protocol.

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	To make it even harder to foresee, the carbon market is not only composed by allowances provided and auctioned by governments, but also allowances “created” by so-called “offsets”. An offset is basically a reduction of emissions made in order to compensate emissions made elsewhere. A polluting company would typically invest in a renewable energy project, reforestation or even de-pollution of environments, to get allowances in exchange, and emit more CO2 than they were “allowed” to. At least, The Kyoto Protocol (2007) has sanctioned offsets as a way to earn carbon credits that can be traded with other companies.<ref>Thanks to this measure, offsets cannot be a direct source of profit. “Carbon Offset” on Wikipedia, introduction, 2020.		To make it even harder to foresee, the carbon market is not only composed by allowances provided and auctioned by governments, but also allowances “created” by so-called “offsets”. An offset is basically a reduction of emissions made in order to compensate emissions made elsewhere. A polluting company would typically invest in a renewable energy project, reforestation or even de-pollution of environments, to get allowances in exchange, and emit more CO2 than they were “allowed” to. At least, The Kyoto Protocol (2007) has sanctioned offsets as a way to earn carbon credits that can be traded with other companies.<ref>Thanks to this measure, offsets cannot be a direct source of profit. “Carbon Offset” on Wikipedia, introduction, 2020.
	source: https://en.wikipedia.org/wiki/Carbon_offset</ref> They also created an organisation for approval of offsets<ref>It is the role of the Clean Development Mechanism, one of the Flexible Mechanism established by Kyoto Protocol. It provides help to offsets projects which generate Certified Emission Reduction units (CER).		source: https://en.wikipedia.org/wiki/Carbon_offset</ref> They also created an organisation for approval of offsets<ref>It is the role of the Clean Development Mechanism, one of the Flexible Mechanism established by Kyoto Protocol. It provides help to offsets projects which generate Certified Emission Reduction units (CER).
	“Clean Development Mechanism” on Wikipedia, introduction, 2020.		“Clean Development Mechanism” on Wikipedia, introduction, 2020.
	source: https://en.wikipedia.org/wiki/Clean_Development_Mechanism</ref>, which are very tricky to evaluate on the long run (a solar energy project or the renewal of a facility to emit less may not always be successful) and may benefit to developed countries getting “cheap” offsets from low-cost projects abroad. Moreover, the risk of fraud is high, in the form of “non-additional” credits: it means that the offset project will have taken place anyway, without the help from an interested carbon emitter. In this case, money is only going from hands to hands without financing anything else than pollution. This would even suggest that a wide part of carbon offsets do not represent actual emissions cuts, allowing companies to skew their emissions reduction easily.		source: https://en.wikipedia.org/wiki/Clean_Development_Mechanism</ref>, which are very tricky to evaluate on the long run (a solar energy project or the renewal of a facility to emit less may not always be successful) and may benefit to developed countries getting “cheap” offsets from low-cost projects abroad. Moreover, the risk of fraud is high, in the form of “non-additional” credits: it means that the offset project will have taken place anyway, without the help from an interested carbon emitter. In this case, money is only going from hands to hands without financing anything else than pollution. This would even suggest that a wide part of carbon offsets do not represent actual emissions cuts, allowing companies to skew their emissions reduction easily.