Opinion: A price on carbon offers the clearest way to tackle climate change

Green MEP’s and NGO campaigning for a price on carbon in 2013. Photo credit: greensefa via Flickr.
By Declan Milling

Wouldn’t it be great if we did things because they were ‘the right thing to do’? Even if there was a personal cost, even though our altruism wouldn’t be rewarded with anything more than the warm inner feeling that we’d done it solely because it was right, and we should do it. Leaving aside all the assumptions and value judgments implicit in such a statement, it would be good, wouldn’t it?


Sadly, however, that seems to be less and less the way of a world in which everything has a price and a cost (not necessarily in line with its value), all decisions need to be considered in monetary terms, the financial costs weighed up and public policy issues are reduced to cost-benefit analyses, returns on investment, economic efficiency, economic impact analyses and so on.


So it is with climate change. Whether you’re a free marketeer, or believe emissions trading to be the work of the Devil, the reality is that putting a price on carbon emissions offers the clearest way of getting people to change the way they do the things that cause carbon emissions.


This is the case, in spite of the way in which emissions trading under the Kyoto Protocol has flopped, despite the problems that beset the Clean Development Mechanism and Joint Implementation. And in Europe, while some point to price fluctuations to argue it is a failure and others point to the emissions reductions it has already fostered to argue it isn’t, the European Union Emissions Trading Scheme remains a central plank of EU climate change policy.


There’s no doubt that the designs of these mechanisms have been fraught with problems and, in many respects, left much to be desired. Nevertheless, putting a price on carbon remains integral to any future climate change policy mix.


More to the point, it seems that the idea of using a price mechanism is gaining ground, rather than losing it, in jurisdictions around the world. Not only carbon tax mechanisms, but also new emissions trading schemes, are being included in the suites of policies and measures implemented as cities, provinces and countries, in both the developed and developing worlds, look at ways to reduce their emissions; to enhance the removals of greenhouse gases from the atmosphere; to play their part in avoiding dangerous anthropogenic climate change.


However, this groundswell of bottom up carbon price setting activity could all be for nought, if the collective mindset of the UNFCCC Parties – the national governments of the 195 countries that have ratified the Convention – fails to show sufficiently clear and unambiguous support for carbon pricing mechanisms and emissions trading, in particular, when it meets in Paris in December at COP21.


At present, it’s too early (although you might say, but isn’t time running short?) for indications of where the Paris agreement might lead. The negotiating text for a new treaty remains just that, with all draft options still there, square-bracketed. But when the ink dries on the finally agreed version, at the end of COP21, unless that text provides the sort of signals necessary to give confidence to the people who will finance re-engineering of the global economy towards low carbon emissions options, the people who will be relying on the carbon price signals, then all the talk will amount to nothing more than yet another discharge of hot air.


If, as seems to be the case, carbon pricing and, in particular, emissions trading, will remain central to global carbon emission mitigation efforts, the signals coming out of COP21 must set an agenda that ensures the mistakes of the past are learnt from, avoided and not repeated.

Declan Milling has over thirty years experience practising as an environmental lawyer. Born in Australia, he holds bachelor degrees in science and law and a masters degree in environmental law. Currently based in the United Kingdom Declan divides his time between London and Edinburgh. Declan released Carbon Black last year its available on Amazon or via his website: www.declan-milling.com.

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