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

🛢💸 The real deal about Carbon Pricing (view source)

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 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.
-[[File:Article-02-c-2015_Adoption-ParisAgreements_UN.jpg|thumb|Thumbnailed image|“Making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development”
+[[File:Article-02-c-2015_Adoption-ParisAgreements_UN.jpg|thumb|Thumbnailed image|Adoption of the Paris Agreement, Article 02, (c), UNFCC, 2015, p.22.]]
-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.
 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.
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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.
-[[File:emission-vs-free-allowances_2013_carbonleakage_evidence_project_ecorys.png|thumb|Thumbnailed image|“For every year under the EU ETS thus far, the verified emissions in the iron & steel sector as a whole were lower than the allocation of free EU Allowances for that year. During 2008-2012, mainly due to the economic downturn, almost 360 million tonnes CO2-eq were built up from the excess of EUAs, which if valued by the yearly average price result in freed-up allowances of roughly €5 billion.”
+[[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.]]
-Emission versus free allowances in the steel industry. Carbon-leakage evidence project, Ecorys, 2013, p.33.]]
+[[File:transfer-mispricing-fraud_2013_Interpol_Guide-to-Carbon-Trading-Crime.png|thumb|Thumbnailed image|About carbon mispricing fraud. Interpol, Guide to Carbon Trading Crime, 2013, p.23.]]
-[[File:transfer-mispricing-fraud_2013_Interpol_Guide-to-Carbon-Trading-Crime.png|thumb|Thumbnailed image|“It is possible that companies that need to purchase carbon credits to offset their emissions may also have investments in derivatives trading and in businesses responsible for generating carbon credits.68 This raises the potential for those related companies to engage in transfer mispricing. Transfer mispricing, also known as transfer pricing manipulation, refers to trades between two related parties at artificial prices for the purposes of tax avoidance.”
-Interpol, Guide to Carbon Trading Crime, 2013, p.23.]]
 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: