Subscribe to our free daily newsletters
  Energy News  




Subscribe to our free daily newsletters



ENERGY NEWS
Carbon Taxes Are The Answer To The Stalled Climate Negotiations

Emissions of carbon dioxide are externalities - social consequences not accounted for in the market place. They are market failures because people do not pay for the current and future costs of their emissions.
by Staff Writers
London, UK (SPX) Jan 06, 2011
For global warming policy, the 2009 United Nations Climate Change Conference (Copenhagen Summit) was a major disappointment. Designed to negotiate a successor to the Kyoto Protocol, which expires in 2012, the Summit concluded without a binding agreement because of deep divisions on the distribution of emissions reductions and costs.

In addition, the United States failed to take action on a carbon cap-and-trade bill in 2010. Confronting this policy vacuum, leading climate economist William Nordhaus argues in the Bulletin of Atomic Scientists that carbon taxes are the best approach to achieve significant emissions reductions.

William Nordhaus argues that the cap-and-trade approach used in the 1997 Kyoto Protocol will not accomplish the goals of slowing climate change. As currently designed, it is both economically inefficient and ineffective and should be supplemented or replaced. Additionally, a carbon tax could be a useful means to cut budget deficits while meeting environmental objectives.

Emissions of carbon dioxide are externalities - social consequences not accounted for in the market place. They are market failures because people do not pay for the current and future costs of their emissions.

"If economics provides a single bottom line for policy, it is that we need to correct this market failure by ensuring that all people, everywhere, and for the indefinite future, face a market price for the use of carbon that reflects the social costs of their activities," Nordhaus states.

He says that it is necessary to raise the price of carbon to implement carbon policies so that they will have an impact on everyday human decisions, and on decision makers at every level in every nation and sector.

At present, incentives and levels of involvement vary, and where some countries have implemented strong emission control measures, they only cover a limited part of national emissions. For example, the European Trading Scheme - Europe's effort to initiate a cap-and-trade structure - covers only about half of EU emissions.

Economic evidence suggests the cost of this limited participation is high. Participation will have to involve everyone by the mid 21st century if the aim of keeping global temperature change within the 2 degrees Celsius target of the Copenhagen Accord is to be achieved.

Given a choice between a cap-and-trade system (such as is embodied in the Kyoto model), and a carbon tax system (such as is used for limiting gasoline or cigarette consumption), Nordhaus favours taxation: "Countries have used taxes for centuries," he says. "By contrast, there is no experience - as in zero - with international cap-and-trade systems."

A carbon-tax model also provides a friendly way for countries to join a climate treaty. Countries considering joining under the current Kyoto model have to weigh up concerns about the long-term impacts of climate change with heavy pressures that big countries could apply.

Under the carbon-tax model, by contrast, countries would need only to guarantee that their domestic carbon price would be at least at the level of the international norm - a relatively straightforward and transparent choice.

How do we modify the Kyoto Protocol to include tax-type models? Some have suggested a hybrid approach combining both quantity and price approaches. An example of a hybrid plan would be a traditional cap-and-trade system combined with a floor carbon tax and a safety-valve price. The Kyoto treaty might also be broadened, to allow countries to fulfill their treaty obligations if they have a domestic regime with a minimum carbon price attached to all emissions.

One further impetus for climate-tax legislation comes from the need to curb the growing budget deficits in many high-income countries. A carbon tax would provide an important revenue source, and a carbon tax is the closest thing to an ideal tax that can be imagined, he argues.

"The international community should move quickly to replace the current cap-and-trade structure by one in which the central economic mechanism is a tax on greenhouse-gas emissions," Nordhaus concludes.

William Nordhaus is a Sterling Professor of Economics at Yale University, CT. He has served on several committees of the U.S. National Academy of Sciences (NAS), including the Committee on Nuclear and Alternative Energy Systems, the Panel on Policy Implications of Greenhouse Warming, and the Committee on Implications for Science and Society of Abrupt Climate Change. The architecture of climate economics: Designing a global agreement on global warming by William D. Nordhaus is published in the Bulletin of the Atomic Scientists Volume 67, issue 1. The article will be free to access for a limited period from http://bos.sagepub.com. The Bulletin of the Atomic Scientists is published by SAGE.



Share This Article With Planet Earth
del.icio.usdel.icio.us DiggDigg RedditReddit
YahooMyWebYahooMyWeb GoogleGoogle FacebookFacebook



Related Links
SAGE Publications UK




Memory Foam Mattress Review
Newsletters :: SpaceDaily :: SpaceWar :: TerraDaily :: Energy Daily
XML Feeds :: Space News :: Earth News :: War News :: Solar Energy News


ENERGY NEWS
Wake Up And Smell The Willow
Leeds, UK (SPX) Jan 05, 2011
More plant matter could be burned in coal-fired power stations if this 'green' fuel was delivered pre-roasted like coffee beans, according to researchers from the University of Leeds, UK. Many UK power stations are now burning plant matter, or biomass, as well as coal in a bid to cut their carbon footprint. Unlike fossil fuels, plants like willow, Miscanthus and poplar are a virtually carb ... read more







ENERGY NEWS
EU to miss efficiency target, Barroso says

Capstone Receives Follow-on Order For 6MW

Carbon Taxes Are The Answer To The Stalled Climate Negotiations

Iceland's Bjork in karaoke marathon against energy takeover

ENERGY NEWS
Falklands may lose vital shipping link

BP report spreads blame

Japan traders eye giant Russia LNG project

Bolivia offers perks to oil prospectors

ENERGY NEWS
Keenan 2 Wind Farm Commences Commercial Operation

US challenges Chinese wind power subsidies at WTO

Italy wind farm seized by prosecutors

Outsmarting The Wind

ENERGY NEWS
Is The Hornet Our Key To Renewable Energy

New Dyes Improve Solar Technologies

UNI-SOLAR Brand Photovoltaics Set Sail

Kalahari Greentech Addresses Major Office Energy Use

ENERGY NEWS
Turkey in talks with France on nuclear plant: report

Medvedev ratifies nuclear energy pact with Japan

Taiwan's new nuclear plant delayed, operator says

China announces new nuclear technology

ENERGY NEWS
Pratt And Whitney Military Engines Power Biofuel Tests For USAF

Biofuel Grasslands Better For Birds Than Ethanol Staple Corn

Household Sewage: Not Waste, But A Vast New Energy Resource

New Direction Of Bioenergy Research At University Of Idaho

ENERGY NEWS
China Builds Theme Park In Spaceport

Tiangong Space Station Plans Progessing

China-Made Satellite Keeps Remote Areas In Venezuela Connected

Optis Software To Optimize Chinese Satellite Design

ENERGY NEWS
China says faces tough fight against desertification

The First Decade Of The 2000s Warmer Than The Preceding Decades

Broken Glass Yields Clues To Climate Change

Broken Glass Yields Clues To Climate Change


The content herein, unless otherwise known to be public domain, are Copyright 1995-2010 - SpaceDaily. AFP and UPI Wire Stories are copyright Agence France-Presse and United Press International. ESA Portal Reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement,agreement or approval of any opinions, statements or information provided by SpaceDaily on any Web page published or hosted by SpaceDaily. Privacy Statement