Sunday, October 13, 2013

Price Carbon Correctly

 Dana Smillie/World Bank
 by Karin Rives On Thu, 10/10/2013

This was not the time to discuss the science of climate change, or ways to protect coastal cities against monster storms.
The development experts, journalists, policy wonks and investment professionals who gathered at the Center for Global Development [1] in Washington this week were there to sort out a much thornier issue: How to mobilize and spend the $700 billion [2] or so the world will need annually – above what’s already being spent – to slow and adapt to climate change.
Their consensus: Current levels of public and private finance won’t even begin to do the job.
Four years after advanced countries promised in Copenhagen to raise $100 billion annually by 2020 to fight climate change – in addition to the $30 billion they pledged to raise through 2012 in “fast-start” financing for developing nations ­– the road forward is murky at best.
Fiscal constraints make governments less willing, or able, to spend money on a long-term problem, no matter how critical.
“We should have no illusions that public money is going to come rushing back to solve this,” said John Morton, chief of staff at the Overseas Private Investment Corporation [3], the United States development finance agency. “Therefore the role of the private sector is absolutely critical.”
So what will it take to get risk-averse, institutional investors with trillions of dollars in clout to enter climate finance in emerging economies?
A technology revolution? New investment strategies that take the risk out of green projects? The elimination of $485 billion in fossil fuel subsidies [4] and other policy reforms?
Or perhaps a pact between those forward-looking countries that are willing to set a price on carbon, once and for all? By banding together, they could create the size market investors are looking for.
The U.S., the world’s second-largest emitter of greenhouse gases, likely won’t be leading such a coalition effort any time soon. But China might.
Xueman Wang, team leader for the World Bank’s Partnership for Market Readiness, noted that five cities and two provinces in China are now piloting emissions trading systems [5] with the goal of eventually building a national market.
It’s also working with South Africa, which is planning to implement a carbon tax in 2015. South Africa wants to position itself as a leader in a new world where polluters must pay for each kilo of carbon dioxide they emit into the air, Wang said.
In all, the Partnership for Market Readiness is working with 16 emerging economies that are looking to emissions trading, carbon taxes and other instruments to scale up their greenhouse-gas mitigation efforts.
A price on carbon, as leaders of the World Bank Group [6] and the OECD [7] noted this week, will send a signal to private investors that renewable energy and low-carbon projects are, in fact, very profitable. It may be the game changer everybody’s waiting for.

19 comments:

Anonymous said...

If I were to chose a realistc option, it would be for carbon to have a set price once and for all throughout different countries. Like the article said, the US might not go along with it but if China did it would have a HUGE impact which would (hopefully) make the US follow.

Although this is a great short-term, I still don't think we're getting to the route of the problem. It's like we speak about in class, we need a complete paradigm shift in the way we view the environment. Trying to get countries to all agree upon one price will be incredibly challenging and could possibly end up being a waste of time.

If I were in a position of power and had the opportunity to have my opinions hold true weight, I would say we need to invest a good chunk of that money into alternative power sources! We're constantly trying to come up with these ways to slow down climate change but it's really very simple. The root of the issue is how much we strip and abuse this planets natural reasources. Perhaps if we focused more on creating way way less carbon we wouldn't have to set these prices in the first place.

-Megan Spaulding

Anthony JOnes said...

In all honesty, these talks and discussions are completely a huge waste of time....We are not going to simply be able to as they say, "adapt" to or "fix" climate change...It is really discouraging to see that we are of the persuasion thatt throwing enormous dollar figures around is going to allow us to arrive at feasible solution...Indeed a paradigm shift is in order to illicit real tangible change. The issue of climate change is one that isn't going to be solved by governments simply allocating money/subsidies to various programs/initiatives aimed at "fixing" the issue or simply making it "better"...What is putting a "tax" on carbon emissions going to do? Consecutive governments all around the world have made it very clear that they have truly have no interest in curbing climate change as they say they do. Why hasn't anybody yet came out and said "we need to have a shift in lifestyle, the way we live, the way we think, the way we eat, the very way in which we function?!" Because, we, humans, are way too comfortable with the way we exist on this planet for our own good. We are addicted to material, to the traditional, to the norm. Yet this is the very norm is what is threatening our very existence. True change begins with a change in mindset.

Leah DeEgidio said...

The number 700 billion surprised me at first. This seems like an unreachable goal to expect the world to achieve. Then I thought about how expensive it is these days to be "environmentally friendly." To get close to seeing this amount of money funded into stopping climate change, or any form of sustainable development for that matter, is to get rid of the risk associated with the newest green technologies. For private investors to even think twice about contributing to sustainable development we as a whole need a revolution. Perhaps we should invest in a lifestyle change. In the long run it may be a cheaper investment.

Remy Gallo said...

The reason the money we have is not completing anything is because it is being spent in the wrong places. Just like what was promised in Copenhagen, countries will continue to bail out of agreements because it is not in their benefit. This is the same reason that regimes are not producing the results they should be. Like others comments say, the problems we are facing are social, but unfortunately corporations seem unwilling to change so laws must be instated. A price on carbon would be a start, but it would have to be a definitive price that is very high. Accompanying the price would be a set of rules that countries must follow because every regime that exists has loopholes which defeat its purpose. Getting countries to agree with this policy however is unlikely, but if they can it would be a step in the right direction.

Annamaria Watson said...

I think that it is true as some have said, and in accordance with Dali, that we will need a paradigm shift in order to truly rid the world of its environmental problems. However, that is not going to happen immediately, and probably not even in my lifetime. This is because, while ideas may move fast, policy moves slowly. It is difficult to get all the various political institutions in the United States to work with one another- imagine how difficult it will be to convince the entire world.

Whoever the leader in this paradigm shift will be, be it China or South Africa, the work is going to have to be started now by voluntary corporate cooperation and civilian groups in order to make the "deadline" for climate change.

Chris Olsen said...

I don't believe throwing money at this problem will solve anything in the long run. The only thing that could is a shift in people's lifestyles. Humans have to realize that their way of living is destroying the environment and change it. People must be more aware and considerate of their impact on the environment and more considerate of the environment as a whole. If people view their current lifestyle as more important than the environment nothing will change.

Bradley Malave said...

I found it very interesting that in the beginning of the article they were talking about how they will spend the $700 billion dollars to "slow and adapt to climate change.” Simply putting money into projects to slowdown climate change is not a big enough action that needs to be taken in order to actually tackle the issue of climate change. Greatest factor of climate change is air pollution. The 16 emerging countries have it right when by looking towards “emissions trading, carbon taxes and other instruments to scale up their greenhouse-gas mitigation efforts.” The air pollution needs to be controlled and by making it a cost to emit these harmful gases is a great way to get people to reduce the CO2 emissions. South Africa is making a very strategic and smart move by working on putting a carbon tax by 2015. This will put them ahead of USA for emitting less air pollution. Since USA is the second largest emitter of greenhouse gases, it’s not likely that USA will make such drastic changes that the other 16 countries are planning to do. The great thing about implementing a carbon tax is that companies will be forced to lower they greenhouse gas emission and they will then realize that they need to invest in renewable energy and products that will lower the emissions. This will lead to a demand for environmental engineering which will be like the industrial revolution with major inventions emerging but this will be an environmental revolution. I do believe that taking strong actions to reduce air pollution will bring rise to an environmental era.

Mary O'Sullivan said...

I agree with the overall idea of putting a set price for carbon once and for all. However, this would not have as big an impact as one would expect.Just putting a monetary value to something won't change the rate at which it is consumed/emitted. We as a society, must first change the way in which we live. As discussed in class, we are in desperate need of a paradigm shift in the years to come. We need to stop strictly focusing on the short term, and begin to look into preventing long term damage. Hopefully if the countries that implement the carbon pricing find it to be successful, many others will follow along as well.

Cynthia Romero said...

Having a set price for carbon feels like a step in the right direction but what worries me is that it will seem like enough when it is not. We must find a solution. A long term one that really gets to the root of the problem. I also worry because changing the price does not change the rate at which carbon is being used. We need to look at the bigger picture and continue to inform each other. We need to want a better future for everyone and stop being selfish. A paradigm shift is needed in order to be able to find long term solutions and stick to it.

Michael Bronn said...

I think that setting a price on carbon will make a difference, because these companies would try to limit their emissions in order to save money. Setting this price will help push people to change their lifestyles. If they do not want to change in order to help the environment, they will do it in order to save money. If this money is put to good use, such as for research on alternative energies or cleaner emissions this climate change issue can possibly be fixed.

Omer Aitzaz said...

Although this might work in theory, practically this project can never reach completion of its goals. First and foremost, not every nation lists environmental conservation at its priorities. Developing nations today focus more on economic growth over environmental protection, since growth seems to be the short hand issue. However, countries that are making the project of enforcing taxation on the amount of carbon possible, have to realize that the project would only work if everyone gets involved; this not only includes nation states throughout the globe but individuals that can recognize the environmental problem and change the whole paradigm of economic growth and transfer it towards the environment. Limiting our use of carbon is a solution that might had worked 50 years ago, but in today's time when nations are using resources at an alarming rate, critical and dire methods should be implored to help conserve the depletion of natural resources in order to continue surviving. We should not forget the role capitalism plays; monopolies have not only halted the democratization of societies, it has grasped such a hold over nation governments that any major change in carbon taxation influencing economic growth can become very hard to veto.

Omer Aitzaz said...

Although this might work in theory, practically this project can never reach completion of its goals. First and foremost, not every nation lists environmental conservation at its priorities. Developing nations today focus more on economic growth over environmental protection, since growth seems to be the short hand issue. However, countries that are making the project of enforcing taxation on the amount of carbon possible, have to realize that the project would only work if everyone gets involved; this not only includes nation states throughout the globe but individuals that can recognize the environmental problem and change the whole paradigm of economic growth and transfer it towards the environment. Limiting our use of carbon is a solution that might had worked 50 years ago, but in today's time when nations are using resources at an alarming rate, critical and dire methods should be implored to help conserve the depletion of natural resources in order to continue surviving. We should not forget the role capitalism plays; monopolies have not only halted the democratization of societies, it has grasped such a hold over nation governments that any major change in carbon taxation influencing economic growth can become very hard to veto.

Omer Aitzaz said...

Although this might work in theory, practically this project can never reach completion of its goals. First and foremost, not every nation lists environmental conservation at its priorities. Developing nations today focus more on economic growth over environmental protection, since growth seems to be the short hand issue. However, countries that are making the project of enforcing taxation on the amount of carbon possible, have to realize that the project would only work if everyone gets involved; this not only includes nation states throughout the globe but individuals that can recognize the environmental problem and change the whole paradigm of economic growth and transfer it towards the environment. Limiting our use of carbon is a solution that might had worked 50 years ago, but in today's time when nations are using resources at an alarming rate, critical and dire methods should be implored to help conserve the depletion of natural resources in order to continue surviving. We should not forget the role capitalism plays; monopolies have not only halted the democratization of societies, it has grasped such a hold over nation governments that any major change in carbon taxation influencing economic growth can become very hard to veto.

Kira Knight said...

I think that we need to stop talking about all these "green" options and things we can do to help our environment and start acting on what we say. Coming up with a standard price for carbon isn't as important as the need for a paradigm shift in our society right now. We say we want to be a more environmentally safe and cautious people and yet we do nothing to alter our actions and the way we use our resources. Money has nothing to do with us being able to waste less and conserve more. We need to make a lifestyle change if our environment is to be a sustainable one, no amount of money is going to buy that.

Taylor Vogt said...

I followed the Cop15 conference closely when it happened and remember when the 'green fund' was approved. It seemed like the only true concrete result from the conference that had any meaning. Though, having studied this issue considerably in the past, I knew that the path forward actualizing on that promise would be fraught with problems. These countries that signed on to put money in this slush fund don't even sink enough money voluntarily into the OWN future to make me think that they would seriously consider something that could drain their precious domestic resources on helping someone elsewhere. It's interesting this article brought up China. They're the world largest producer of solar photovoltaic technologies and installer of wind power. They have a vested stake in seeing this sector grow and thrive both domestically and abroad. They will soon be the world greatest economic superpower. They are the world largest emitter of greenhouse gases. It will be interesting to see how this dynamic plays out.

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