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UN climate report: Pricing of CO2 emissions critical
Date:4/4/2014

sufficiently high emission tax of SEK 1 (about USD 0.15) per kilo CO2 (or an equivalent permit trading scheme) were introduced in all sectors across the world, the total emissions could be reduced by half by 2050. The difficulty, however, lies in establishing sufficiently strong international agreements.

Another effective intervention identified in the report is to stimulate research on new technologies. One dilemma, says Sterner, is that companies know they will have problems patenting new environmentally friendly technologies. This realisation of course affects their motivation negatively, implying that they will not do enough research and therefore there is a need also for state-funded research.

Today, CO2 taxes are relatively unusual being limited mainly to a few countries in northern Europe. Sectoral taxes on transport fuels are more common and have been shown to have very significant effects. On the other hand, many countries are in fact still subsidising fossil fuels. Sterner says that one important policy instrument would be to remove these subsidies. The measures discussed in the report also include voluntary agreements.

'I really don't believe in voluntary measures since they imply letting business and industry do as they please. Overall, I feel that our report may come across as too modest compared with the report from Working Group I, which was presented last autumn and described the climate situation in the world as catastrophic. But there are indeed real opportunities to limit the emissions,' says Sterner.


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Contact: Karin Backteman
karin.backteman@economics.gu.se
46-031-786-2595
University of Gothenburg
Source:Eurekalert  

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