🛢💸 The real deal about Carbon Pricing: Difference between revisions

Introduction to come.

<strong>“<i>Everything has a cost, but not everything is paid.</i>”</strong>

source: https://unfccc.int/resource/docs/2015/cop21/eng/l09r01.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”° was one of the objectives of the 2015 Paris Agreement, following Kyoto Protocol.

<u>“<i>There are better ways of tackling climate change than by privatising the Earth's carbon-cycling capacity.</i>” (Larry Lohmann, 2006)</u>

For a lot of economists, NGOs and politics, carbon pricing figures in number 1 position among solutions to mitigate climate change in a development-friendly way. But now that you know what is carbon pricing, and how successful it has been at generation money from polluting industries since years, you might ask yourself: “Great, now where did all this money go?” Well, in one of the earliest market, the European Union, the EU Directive announced in 2008 that half of its auctioning revenue should be used by Member States “for climate and energy related purposes”<ref>Quote from EU ETS web page.

source: https://ec.europa.eu/clima/policies/ets/auctioning_en</ref>. Still in EU, this money ends up in governments pockets, with fluctuating transparency about the way it is used<ref>“In a number of Member States, revenues from auctioning of allowances are not allocated to specific uses […] generally pooled in the national budget and redistributed.”

source: https://www.interpol.int/Crimes/Environmental-crime/Pollution-crime</ref>

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://sandbag.org.uk/wp-content/uploads/2020/01/2020-SB-Path-of-least-resistance-1.2b_DIGI.pdf</ref>

<u>“<i>Prove that Paris was more than paper promises.</i>”</u>