A primer on carbon pricing and carbon border adjustments
economics.td.com
economics.td.com
In the future, we might see a union of countries that have carbon pricing agree to apply adjustments to non-carbon priced countries equal to (or greater than) their estimated internal carbon outputs.
Those funds can be redirected into extra carbon-offset projects.
With this mechanism, it's theoretically possible to force the would to be carbon neutral (or carbon negative), even if there are a few large countries holding out.
Up here in Alberta Canada we have an oil producing province chock full of people who are against the Federal carbon tax.
Some are climate deniers, but most are rational people who are asking: “Why we should sacrifice our wealth to reduce emissions when capital investment will just flow somewhere that has no carbon tax and the emissions will happen anyways?”
Up until the idea of CBAs started gaining traction the only answer anyone could muster was “Because it’s the right thing to do”, which is incredibly weak and unlikely to convince pragmatic individuals or anyone who benefits from the oil industry (~5% of GDP, so it’s a lot of people).
I hope that CBAs can be a way of addressing this concern such that taking action on climate change doesn’t mean reducing global competitiveness.
It’s a shame anyone who is skeptical about realities of tax policy changing the climate are labeled “deniers”.
You have perfectly illustrated the right argument. So the question is really, “by what mechanism other than world war are you going to force everyone on to the same tax and credit system”?
Maybe it is import/export and border adjustment, IDK. Interesting idea.
Some countries have a point-based system for immigration, why not reward those doing their parts for the planet?
Unless they vote against using coal
translation, exclude china and most other "developing" nations while increasing the Tax on "rich" nations, a tax that is regressive in nature and will impact the poor people living in "rich" nations the most...
We didn’t set a price on lead emissions, we banned leaded gas and lead paint.
Carbon permits are a failed policy; they will make somebody rich, who will feed back 1% of the profits to politicians to maintain their privilege.
Personally, I advocate for a "carbon market" type system, where any company, is required to buy carbon credits equal to the amount of carbon they produce. You can't grandfather companies into a given amount of carbon credits, every carbon credit must be created by another entity capturing and storing carbon.
This carbon market should find the correct price for carbon, and create growth in the carbon offset industry. Some industries might decide the correct solution is reducing their emissions to zero, others might decide it's cheaper to just buy carbon credits.
The government also gets a useful knob to force market into carbon negative territory, by forcing companies to buy 1.1 carbon credits for every unit of carbon they emit.
And if we actually want to reverse some of the damage we have already caused, we need to go massively net-negative.
I'm not a fan of tax+spend either, which is why I support a carbon market solution.
But it doesn't follow that we need to e.g. reduce petrol consumption to zero.
Squeezing out that last one or two percent is going to be much harder than just moving on and looking for gains elsewhere.
The trouble is that we don't know the true cost of the externalities of carbon emissions until it's far to late.
If carbon leads to climate feed backs that ultimately lead to an extinction event on the scale of the End-Permian (which is a real possibility) then it's clear that the "price" of carbon, factoring in all it's externalities, should make using hydrocarbons so expernsive we never would have propped our civilization (and species) up with them.
If climate change and the other externalities of carbon emissions only mean the collapse of industrial civilization, we would find an equally prohibitive price.
I'm in agreement with GP that this is mostly a failed policy. Until we see carbon emissions drop fairly dramatically this will just be shuffling around money to different people while we watch the planet heat up.
When mass casualty events become common by 2030, political and financial elites will face angry crowds and death over this failed policy.
It's never too early to start doing the right hing.
You would have to bootstrap the system by inserting a large number of 'phantom offsets' into the market at the start. These fake offsets will be retired on a schedule or formula so that companies deciding to enter the carbon offset industry have a good idea about demand during their planning stages.
Whenever possible, the carbon market will encourage industries to produce less, it should always be the cheaper option. But reducing carbon emissions is harder in some industries, and the carbon market gives those industries an alternative option.
Also, it's impossible to reach net-zero emissions by just emitting less. Plus, the latest papers make it clear that we are far past the point were we can limit damage by simply going net-zero. We need to go massively net-negative.
If we want to go net-negative, we need a robust carbon offset industry, and a carbon market is one way of encouraging growth in that industry.
Besides, as far as the global environment is concerned, there is zero difference between not emitting CO2 and emitting CO2 in one place and sequestering it in another.
Put carbon in the soil or trees and it is just a fire away from being released again.
Crush olvine on the the beach and you will never know how much carbon was captured, if any.
If you compress it to 1500 psi and inject it underground you can measure it going in the same way you measured oil and gas coming out. That's real, but it is a lot more expensive. Nobody should be paying for any of the other things.
Then comes the political reality where one party will propose enough money for all that, then it gets wheedled down to half, then half of that goes to pork and then a half of the remainder is overhead, so consultants get that 1/8 to draw up an estimate and the budget's gone
Turns out: capital markets don't incentivse >>50y investments.
Because there was an alternative. There is no current good enough alternative to burning fuel. We want to motivate people to come up with some, and you do that with money.
Imagine if you could actually ban all fuel burning starting tomorrow - think about the results: Country wide blackouts (so no electric cars), no fuel, so no gas cars either.
All food deliveries stop, water pumps stop, and people die.
So, how sure are you that you want to ban CO2?
By all accounts its already too late to stop the warming of the planet and we will have to learn to live with the consequences of our actions for the foreseeable future.
Even with wildfires raging across the northern hemisphere this year and in the southern hemisphere last year we keep on digging more coal and oil from the ground.
We keep on acting as if its business as usual. Move along, nothing to see here.
And no, renewable energy is not going to save us. We wont even reach 45% of renewable energy production worldwide for another 20 years at best.
Our global population keeps on increasing and we are depleting our natural resources at an ever faster pace than before therefore increasing deforestation and carbon emission.
All of this done in order to satisfy the need for our economies to grow no matter what the cost on our habitat is, and threatening a million species of animals/insects in the process.
There is a garbage island in the pacific and there will be soon more plastic in the ocean than fish. What a depressing thought.
If only we were the rational creatures that we think we are, maybe we would stop this madness and realize that we are driving at full speed towards a cliff.
I am afraid there is no hope for us.
We also need to stop thinking that renewable energy will save us. It wont. Maybe in 50 years, but its already too late as of now.
We need to stop ICE cars from being sold within the next 5 years and we need to start decreasing our population to reach a natural equilibrium with our global ecosystem.
Its time for the leaders of this world to acknowledge that we are in danger as a species.
It's time to call a spade a spade and its time to stop having pointless debates about climate change. Its time to act.
If you can maintain power by doing the exact opposite of your position then that is exactly what is going to happen. The conservative German party CDU gets 30% in Germany because people don't want things to change. The CDU is well known for pretending to care about the environment and then not doing anything, their voters don't see a problem in that, they like it that way.
Just need to point out that a price on carbon is a mechanism for achieving exactly this. The goal is to make emitting energy sources expensive enough that people shift to carbon free alternatives wherever possible.
In summary, climate change is a human problem, not a technological one. Technology has changed a lot and continues to do so, but the fundamentals of human psychology haven't really changed. We know of the problem, we have the technology to solve it, to the extent that it can be solved, but not the will and coordination to do so. Yet what reason do we have to believe that this will change in the future?
Of course, I know nothing about OP, have no professional knowledge, and could be way off. I just thought mentioning it might push someone to seek help. I won't mention it again.
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Climate change is a hard problem, but not for the reasons you give. To me, it's mainly a "Collective Action Problem". I, my city, my state, or my country may do our part of what's needed to solve the problem, but it won't be worth anything if the rest of the world doesn't join in.
Worse, our sacrifices makes the problem less urgent for other regions, who can "free ride" on our efforts.
If there was "local global warming", and changing California's emissions would fix California's weather, I think it would long since be handled, despite the long term nature of the benefits.
https://www.britannica.com/topic/collective-action-problem-1...
A political will is definitely lacking. One thing we cannot say, when the last forest has been cut down or was burned down during the soon to be longer summer months, when the food chains start collapsing due to the death of trillions of insects, is that we did not know.
We knew as far back as the 80s that this was going to happen but too often the human species likes to bury its head in the sand until its too late.
There is no reason to think that this will change anytime soon.
We, in tech like to think about technological solutions to a problem. In this case the tech is here. Its affordable, but we are not embracing it as we should.
Instead of committing to net zero in 2050, we should do the transition in less than a decade and then start capturing CO2 from the atmosphere after that. Yet here we are debating if we should or not start trading carbon credits between ourselves, as if there is nothing better to do.
Even when it makes financial sense people may be attached to the old way of doing things. They may drive an ICE car because they want to complete their 500 mile trip with one tank even though charging on the way only delays the trip by 30 minutes, something which is possible today.
There are inferior ways of achieving a goal that don't harm the planet. They often require a small sacrifice but they are possible today. When someone insists on an ICE because of a difference in range, they insist that engineers solve the impossible e.g. carbon capture [0] even though a possible solution exists.
That is the real problem. We collectively decide to create a problem that is impossible to solve and then we point at the engineers. They are already solving problems, you know, the solvable ones.
[0] By that I mean enough carbon capture to undo all the pollution that we didn't even try to prevent.