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

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.

==What are the flaws of carbon pricing?==

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

===Emissions Trading Schemes===

source: https://ec.europa.eu/clima/sites/clima/files/ets/auctioning/docs/auction_revenues_report_2017_en.pdf</ref> This was for carbon trading in EU, but if you consider carbon taxes that are levied nationally, it becomes more difficult to follow the revenues use.<ref>As citizens, nobody would like to learn that carbon pricing revenues are used to refund national debt or subsidy companies that are already thriving.</ref>

Despite the goodwill of governments, some frauds have been spotted, like the case of French cement producer Lafarge who benefited of an overestimated CO2 emissions permit, while shutting down plants; thus being able to sell its extra allowances on the carbon market for a total exceeding €1100M in 5 years. Between 2008 and 2014, the cement sector might have made €2,7B of windfall profit from this allowances surplus.<ref>Carbon Market Watch & Sandbag are 2 NGOs who contributed to unveil this scandal.

source: https://carbonmarketwatch.org/wp-content/uploads/2016/11/Cement-windfall-from-the-ETS_4page_final.pdf</ref> No surprise the EU decided to decrease the share of free allowances since 2013: some industries were literally paid to pollute!

In the end, carbon market did not escape from the weakness of any young unregulated market, attracting so much scammers that Interpol, the international police, published a report about carbon trading crimes in 2013.<ref>See <i>Interpol Environmental Crime Program: Guide to carbon trading crime</i>, 2013.

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

===Carbon taxes===

source: https://sandbag.org.uk/wp-content/uploads/2020/01/2020-SB-Path-of-least-resistance-1.2b_DIGI.pdf</ref> are particularly exposed to imports of low-cost coal electricity, because they have a significant electricity interconnection or because their energy policy contrasts with that of their non-European neighbouring countries. This, for sure, is a carbon leakage profitable to energy companies, shaping possible “offshore carbon havens”. That is why the new European Commission President has put forward border carbon adjustments; that could start with the power sector. This means to apply a carbon price to electricity imports, making them less appealing to Member States. Since 2015, EU imports more electricity that it exports; with Russia and Ukraine as main sources. In 2019, 33TWh of electricity worth €1,6B was imported into EU. It is still marginal, since it accounts for approximately 1% of EU’s total production; but much more interconnections and coal plants are planned.<ref>Sandbag NGO, <i>How Electricity generated from coal is leaking into the EU</i>, 2020.

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

==What are the concrete effects of carbon pricing on climate?==

REDD Monitor website, Greta Thunberg: “We are not telling you to offset your emissions”, January 2020.

source: https://redd-monitor.org/2020/01/25/greta-thunberg-we-are-not-telling-you-to-offset-your-emissions/</ref>

==To conclude==

source 1: https://www.independent.co.uk/environment/climate-change/recession-did-not-lower-c02-emissions-6272333.html

source 2: https://www.nature.com/articles/nclimate1332</ref> Glen P. Peters, a Norwegian scientist who participated to the later study, considers that in some ways the financial crisis was a missed opportunity to curb future emissions worldwide… A potential next question to open the scope of this carbon pricing series will be: “Will the 2020 economic crisis, that arise from the disastrous COVID19 virus, eventually put some governments on good tracks to Paris pledges, or is it a short minor break on carbon emissions?”

== Notes ==