Leading economists warn that very high carbon tax, starting soon, needed to avoid climate catastrophe
A group of leading economists have warned that the world risks catastrophic global warming in just 13 years unless countries raise taxes on CO2 emissions to as much as $100 (£77) per metric tonne. Experts including Nobel laureate Joseph Stiglitz and former World Bank chief economist Nicholas Stern believe governments must impose a tax on CO2 of $40-$80 per tonne by 2020, to limit emissions from high carbon polluting industries. The price needs to rise to $50-$100 by 2030. This would be needed to attempt to prevent global temperature rising above 2C, in line with targets set by the Cop21 Paris Agreement in 2015. In a report by the High Level Commission on Carbon Prices, backed by the World Bank and the IMF, the authors suggest poor countries could aim for a lower tax, as their economies are more vulnerable. Currently though Europe talks the talk on carbon, the EU carbon trading system currently charges major polluters just €6 (£5.20) for every tonne of CO2, which is far too low to have any impact. Stiglitz and Stern say CO2 prices should rise now, to give businesses and governments the necessary incentive to lower CO2 emissions even when fossil fuels are cheap. The rise in the cost of carbon, if the aviation industry was included, would have a significant impact on the cost of air travel, reducing demand slightly.
By Phillip Inman (Economics editor, Guardian)
A group of leading economists warned on Monday that the world risks catastrophic global warming in just 13 years unless countries ramp up taxes on carbon emissions to as much as $100 (£77) per metric tonne.
Experts including Nobel laureate Joseph Stiglitz and former World Bank chief economist Nicholas Stern said governments needed to move quickly to tackle polluting industries with a tax on carbon dioxide at $40-$80 per tonne by 2020.
In a report by the High Level Commission on Carbon Prices, which is backed by the World Bank and the International Monetary Fund, they suggest poor countries could aim for a lower tax since their economies are more vulnerable.
The aim of a tax on carbon would be essential to meet the targets set by the Cop21 Paris Agreement in 2015, they said.
The call for action will sting European leaders, who have presided over a carbon trading scheme since 2005 that currently charges major polluters just €6 (£5.20) for every tonne of carbon they release into the atmosphere.
The European scheme, which issues firms with carbon credits that can be traded on a central exchange, has come under fire for allowing heavy energy users to avoid investments in new technology to cut their emissions.
Critics accuse officials of issuing too many credits and allowing the price to fall to a level that makes it cheaper for companies to pollute than change their behaviour.
The Trump administration has rejected calls to introduce a carbon tax in the United States, saying it would cost jobs.
Washington’s refusal to adopt a tax has deterred Brussels from moving to a more substantial charge on emissions, which would have the effect of increasing energy costs, at least in the short term, and imposing higher costs on European manufacturers.
The European Union’s Emissions Trading System (ETS) is the world’s biggest scheme for trading greenhouse gas emissions allowances. It covers 11,000 power stations and industrial plants in 30 countries, whose carbon emissions make up almost 50% of Europe’s total.
There are many other news stories about aviation and the European Emissions Trading system, or the ICAO deal, at