{"id":735,"date":"2015-07-08T15:05:02","date_gmt":"2015-07-08T20:05:02","guid":{"rendered":"http:\/\/blogs.edf.org\/markets\/?p=735"},"modified":"2015-07-08T15:23:04","modified_gmt":"2015-07-08T20:23:04","slug":"the-holy-grail-of-climate-economics-a-price-on-carbon","status":"publish","type":"post","link":"https:\/\/blogs.edf.org\/markets\/2015\/07\/08\/the-holy-grail-of-climate-economics-a-price-on-carbon\/","title":{"rendered":"The holy grail of climate economics? A price on carbon."},"content":{"rendered":"
\n
\n
(This blog post was co-authored with Dominic Watson and originally posted on EDF Voices<\/a>.)<\/i><\/div>\n<\/div>\n
<\/div>\n<\/div>\n
\n
\n
\n

If there were a competition for the most important number in the world, the price on carbon would certainly be a strong contender.<\/p>\n

The World Bank has been a long-time supporter of carbon pricing and its recent report, Decarbonizing Development<\/a>, adds a strong voice to the chorus of climate policy experts, economists, and business leaders <\/a>who champion the economic, social and environmental benefits of pricing pollution.<\/p>\n

The report\u00a0underscores the importance of getting the\u00a0economics<\/a> of climate change policies right so we can transition cost-effectively to a carbon-neutral economy.<\/p>\n

Because we live in a world of \u2018bottom-up\u2019 climate policy, the authors rightfully say, this will require multi-pronged policy solutions, each tailored to a country\u2019s particular economic and political conditions.<\/p>\n

At the heart of this broader approach, however, lies the holy grail of climate economics: a price on carbon.<\/p>\n

Markets bring results – fossil fuel subsidies don\u2019t<\/h4>\n

Global temperatures must stay below the 2\u00b0C threshold for the world to avoid catastrophic climate change. This requires that net carbon emissions are reduced to zero by the middle to the end of the century.<\/p>\n

A price on pollution has been shown time and time again to be the most cost-effective way to reduce emissions. By internalizing the cost of pollution to firms – meaning, making polluters pay<\/a> for the right to emit carbon – they will have an incentive to reduce emissions and look for the cheapest emissions reduction options.<\/p>\n

A tax on carbon, or a cap-and-trade system where permits – or allowances to emit carbon – are auctioned to firms, have the added benefit of bolstering government coffers. The additional revenue can be used to, for example, offset costs low-income households incur should power rates or costs on goods rise.<\/p>\n

It can also be used to reduce taxes, including taxes on labor and capital that can affect social welfare and create market inefficiencies.<\/p>\n

The World Bank reminds us that getting the price right will include removing costly subsidies on fossil fuels \u2013 now estimated at $548 billion<\/a> worldwide. In addition to encouraging the overconsumption of fossil fuels, these subsidies have proven ineffective for helping the poor or for promoting competitiveness.<\/p>\n

A mix of policies can boost clean energy<\/h4>\n

A comprehensive climate policy package should include a mix of additional policies to help address other market failures, the report notes. Policy makers can help boost innovation in clean technologies, for example, by supplementing a carbon price with temporary support for investments, targeted subsidies, performance standards and technology mandates.<\/p>\n

Case in point:\u00a0California\u2019s AB 32 program<\/a>, which guarantees emissions reductions through a market based cap-and-trade program while supplementing the cap with a range of statewide regulations.<\/p>\n

Among other things, the legislation incentivizes\u00a0utilities to invest in renewables and requires building, vehicle and appliance efficiency standards that help consumers save on their electricity bills.<\/p>\n

Next: A global price on carbon<\/h4>\n

Some countries may choose to rely on such regulatory measures alone and opt out of market-based solutions<\/a> for the time being. Such policies will certainly bring countries closer to meeting their emissions goals.<\/p>\n

In the long-term, however, a carbon price must form the linchpin of any viable national emissions reduction plan.<\/p>\n

And ultimately, if we\u2019re to meet that net-zero carbon emissions goal in the most cost-effective way,\u00a0all countries should face the same global carbon price.<\/p>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

(This blog post was co-authored with Dominic Watson and originally posted on EDF Voices.) If there were a competition for the most important number in the world, the price on carbon would certainly be a strong contender. The World Bank has been a long-time supporter of carbon pricing and its recent report, Decarbonizing Development, adds …<\/p>\n","protected":false},"author":8819,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"coauthors":[],"class_list":["post-735","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nThe holy grail of climate economics? A price on carbon. - Market Forces<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/blogs.edf.org\/markets\/2015\/07\/08\/the-holy-grail-of-climate-economics-a-price-on-carbon\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The holy grail of climate economics? A price on carbon. - Market Forces\" \/>\n<meta property=\"og:description\" content=\"(This blog post was co-authored with Dominic Watson and originally posted on EDF Voices.) If there were a competition for the most important number in the world, the price on carbon would certainly be a strong contender. The World Bank has been a long-time supporter of carbon pricing and its recent report, Decarbonizing Development, adds ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/blogs.edf.org\/markets\/2015\/07\/08\/the-holy-grail-of-climate-economics-a-price-on-carbon\/\" \/>\n<meta property=\"og:site_name\" content=\"Market Forces\" \/>\n<meta property=\"article:published_time\" content=\"2015-07-08T20:05:02+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2015-07-08T20:23:04+00:00\" \/>\n<meta name=\"author\" content=\"Jonathan Camuzeaux\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Jonathan Camuzeaux\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/blogs.edf.org\\\/markets\\\/2015\\\/07\\\/08\\\/the-holy-grail-of-climate-economics-a-price-on-carbon\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/blogs.edf.org\\\/markets\\\/2015\\\/07\\\/08\\\/the-holy-grail-of-climate-economics-a-price-on-carbon\\\/\"},\"author\":{\"name\":\"Jonathan Camuzeaux\",\"@id\":\"https:\\\/\\\/blogs.edf.org\\\/markets\\\/#\\\/schema\\\/person\\\/2756fb29f5a8be16c5031aef5c6d2083\"},\"headline\":\"The holy grail of climate economics? A price on carbon.\",\"datePublished\":\"2015-07-08T20:05:02+00:00\",\"dateModified\":\"2015-07-08T20:23:04+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/blogs.edf.org\\\/markets\\\/2015\\\/07\\\/08\\\/the-holy-grail-of-climate-economics-a-price-on-carbon\\\/\"},\"wordCount\":576,\"commentCount\":0,\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/blogs.edf.org\\\/markets\\\/2015\\\/07\\\/08\\\/the-holy-grail-of-climate-economics-a-price-on-carbon\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/blogs.edf.org\\\/markets\\\/2015\\\/07\\\/08\\\/the-holy-grail-of-climate-economics-a-price-on-carbon\\\/\",\"url\":\"https:\\\/\\\/blogs.edf.org\\\/markets\\\/2015\\\/07\\\/08\\\/the-holy-grail-of-climate-economics-a-price-on-carbon\\\/\",\"name\":\"The holy grail of climate economics? A price on carbon. - Market Forces\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/blogs.edf.org\\\/markets\\\/#website\"},\"datePublished\":\"2015-07-08T20:05:02+00:00\",\"dateModified\":\"2015-07-08T20:23:04+00:00\",\"author\":{\"@id\":\"https:\\\/\\\/blogs.edf.org\\\/markets\\\/#\\\/schema\\\/person\\\/2756fb29f5a8be16c5031aef5c6d2083\"},\"breadcrumb\":{\"@id\":\"https:\\\/\\\/blogs.edf.org\\\/markets\\\/2015\\\/07\\\/08\\\/the-holy-grail-of-climate-economics-a-price-on-carbon\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/blogs.edf.org\\\/markets\\\/2015\\\/07\\\/08\\\/the-holy-grail-of-climate-economics-a-price-on-carbon\\\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/blogs.edf.org\\\/markets\\\/2015\\\/07\\\/08\\\/the-holy-grail-of-climate-economics-a-price-on-carbon\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/blogs.edf.org\\\/markets\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"The holy grail of climate economics? A price on carbon.\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/blogs.edf.org\\\/markets\\\/#website\",\"url\":\"https:\\\/\\\/blogs.edf.org\\\/markets\\\/\",\"name\":\"Market Forces\",\"description\":\"Economic Incentives = Environmental Gains\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/blogs.edf.org\\\/markets\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\\\/\\\/blogs.edf.org\\\/markets\\\/#\\\/schema\\\/person\\\/2756fb29f5a8be16c5031aef5c6d2083\",\"name\":\"Jonathan Camuzeaux\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/147a3735613db2fb4f8c213b622b26b1c7fd654370782bff0e2d05ab3553443c?s=96&d=mm&r=gf251dae9cacc42d281893268488f466b\",\"url\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/147a3735613db2fb4f8c213b622b26b1c7fd654370782bff0e2d05ab3553443c?s=96&d=mm&r=g\",\"contentUrl\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/147a3735613db2fb4f8c213b622b26b1c7fd654370782bff0e2d05ab3553443c?s=96&d=mm&r=g\",\"caption\":\"Jonathan Camuzeaux\"},\"url\":\"https:\\\/\\\/blogs.edf.org\\\/markets\\\/author\\\/jcamuzeaux\\\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"The holy grail of climate economics? A price on carbon. - Market Forces","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/blogs.edf.org\/markets\/2015\/07\/08\/the-holy-grail-of-climate-economics-a-price-on-carbon\/","og_locale":"en_US","og_type":"article","og_title":"The holy grail of climate economics? A price on carbon. - Market Forces","og_description":"(This blog post was co-authored with Dominic Watson and originally posted on EDF Voices.) If there were a competition for the most important number in the world, the price on carbon would certainly be a strong contender. The World Bank has been a long-time supporter of carbon pricing and its recent report, Decarbonizing Development, adds ...","og_url":"https:\/\/blogs.edf.org\/markets\/2015\/07\/08\/the-holy-grail-of-climate-economics-a-price-on-carbon\/","og_site_name":"Market Forces","article_published_time":"2015-07-08T20:05:02+00:00","article_modified_time":"2015-07-08T20:23:04+00:00","author":"Jonathan Camuzeaux","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Jonathan Camuzeaux","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/blogs.edf.org\/markets\/2015\/07\/08\/the-holy-grail-of-climate-economics-a-price-on-carbon\/#article","isPartOf":{"@id":"https:\/\/blogs.edf.org\/markets\/2015\/07\/08\/the-holy-grail-of-climate-economics-a-price-on-carbon\/"},"author":{"name":"Jonathan Camuzeaux","@id":"https:\/\/blogs.edf.org\/markets\/#\/schema\/person\/2756fb29f5a8be16c5031aef5c6d2083"},"headline":"The holy grail of climate economics? A price on carbon.","datePublished":"2015-07-08T20:05:02+00:00","dateModified":"2015-07-08T20:23:04+00:00","mainEntityOfPage":{"@id":"https:\/\/blogs.edf.org\/markets\/2015\/07\/08\/the-holy-grail-of-climate-economics-a-price-on-carbon\/"},"wordCount":576,"commentCount":0,"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/blogs.edf.org\/markets\/2015\/07\/08\/the-holy-grail-of-climate-economics-a-price-on-carbon\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/blogs.edf.org\/markets\/2015\/07\/08\/the-holy-grail-of-climate-economics-a-price-on-carbon\/","url":"https:\/\/blogs.edf.org\/markets\/2015\/07\/08\/the-holy-grail-of-climate-economics-a-price-on-carbon\/","name":"The holy grail of climate economics? A price on carbon. - Market Forces","isPartOf":{"@id":"https:\/\/blogs.edf.org\/markets\/#website"},"datePublished":"2015-07-08T20:05:02+00:00","dateModified":"2015-07-08T20:23:04+00:00","author":{"@id":"https:\/\/blogs.edf.org\/markets\/#\/schema\/person\/2756fb29f5a8be16c5031aef5c6d2083"},"breadcrumb":{"@id":"https:\/\/blogs.edf.org\/markets\/2015\/07\/08\/the-holy-grail-of-climate-economics-a-price-on-carbon\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/blogs.edf.org\/markets\/2015\/07\/08\/the-holy-grail-of-climate-economics-a-price-on-carbon\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/blogs.edf.org\/markets\/2015\/07\/08\/the-holy-grail-of-climate-economics-a-price-on-carbon\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/blogs.edf.org\/markets\/"},{"@type":"ListItem","position":2,"name":"The holy grail of climate economics? A price on carbon."}]},{"@type":"WebSite","@id":"https:\/\/blogs.edf.org\/markets\/#website","url":"https:\/\/blogs.edf.org\/markets\/","name":"Market Forces","description":"Economic Incentives = Environmental Gains","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/blogs.edf.org\/markets\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/blogs.edf.org\/markets\/#\/schema\/person\/2756fb29f5a8be16c5031aef5c6d2083","name":"Jonathan Camuzeaux","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/secure.gravatar.com\/avatar\/147a3735613db2fb4f8c213b622b26b1c7fd654370782bff0e2d05ab3553443c?s=96&d=mm&r=gf251dae9cacc42d281893268488f466b","url":"https:\/\/secure.gravatar.com\/avatar\/147a3735613db2fb4f8c213b622b26b1c7fd654370782bff0e2d05ab3553443c?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/147a3735613db2fb4f8c213b622b26b1c7fd654370782bff0e2d05ab3553443c?s=96&d=mm&r=g","caption":"Jonathan Camuzeaux"},"url":"https:\/\/blogs.edf.org\/markets\/author\/jcamuzeaux\/"}]}},"_links":{"self":[{"href":"https:\/\/blogs.edf.org\/markets\/wp-json\/wp\/v2\/posts\/735","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.edf.org\/markets\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.edf.org\/markets\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.edf.org\/markets\/wp-json\/wp\/v2\/users\/8819"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.edf.org\/markets\/wp-json\/wp\/v2\/comments?post=735"}],"version-history":[{"count":0,"href":"https:\/\/blogs.edf.org\/markets\/wp-json\/wp\/v2\/posts\/735\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.edf.org\/markets\/wp-json\/wp\/v2\/media?parent=735"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.edf.org\/markets\/wp-json\/wp\/v2\/categories?post=735"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.edf.org\/markets\/wp-json\/wp\/v2\/tags?post=735"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.edf.org\/markets\/wp-json\/wp\/v2\/coauthors?post=735"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}