What’s Next for Climate? Carbon Emissions Likely to be Priced

Capture

Today, hot on the heels of the Senate’s vote on Keystone XL, Grist blogger David Roberts shared the following post: Within two years, a quarter of the world’s carbon emissions are likely to be priced. While the Keystone XL vote is critical to the green lobby, and all eyes have been on this issue – Roberts reminds us that change is underway, and often not discussed in the headlines. 

It often surprises people to hear that big companies like Exxon use a “shadow carbon price” when assessing future investment opportunities (in other words, they assume a price on carbon even where/when there isn’t one). After all, if you only pay attention to the headlines, it sounds like the big story on climate change is that nobody’s doing anything and we’re all doomed. Why would Exxon think carbon will be priced any time soon?

Well, it turns out that carbon is getting priced, not in the big, dramatic, simple way climate hawks would prefer, but incrementally, piecemeal, country-by-country, region-by-region, still inadequately but in a way that’s starting to add up.

The always-excellent folks at the Sightline Institute have done the world a favor by pulling all the world’s carbon pricing systems into one place… (See their map). As you can see, the big story (as usual) is China, which is planning on rolling out a nationwide cap-and-trade system in 2016. That system will instantly become the largest in the world, covering some 5,000 million metric tons worth of emissions, about 13 percent of the the world’s total. Once that’s in place, about a quarter of the world’s total carbon emissions will be priced. Not bad!

The next biggest systems after China’s are the EU’s and Japan’s. America’s — RGGI on the East Coast and California’s on the West Coast — are comparatively small, especially relative to total emissions in those areas.

How high are the prices on carbon? Sightline explains:

Prices range from $1 to $168 per ton, but most cluster between $10 and $30 per ton. For example, California’s price is currently around $13 per ton, and British Columbia’s price is currently around $28. The price outlier at $168 per ton is Sweden, where a high and persistent price has helped reduce pollution 13 percent in a decade. A carbon tax of $28 plus other policies have helped Ireland slash pollution more than 15 percent since 2008…

For David’s full post, click here. 

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