... The World Bank’s annual review of carbon markets shows that schemes designed to ensure polluters either pay for or reduce their emissions were at play in 39 nations and 23 subnational jurisdictions, as of April 2015. “There has been a rapid acceleration in both the support for carbon pricing and the adoption of carbon pricing policies in countries and regions around the world”, said Noah Kaufman, a Climate Economist for the World Resources Institute. “It is now far more difficult for countries to delay climate change action by pointing at the inaction of others.”
Looking only at the financial value of carbon pricing, the progress is significant, and, as of April 2015, the market was
worth an estimated $50bn. The increase is made to seem even more significant considering that Australia last year repealed its carbon pricing mechanism and made a quite sizeable dent in the market. Buoyed by South Korea’s newly introduced emissions trading system (ETS) and Portugal’s $5 per tonne of CO2 tax, the market enjoyed a modest pick-me-up last year; compounded further by the expansion of schemes such as those in California and Quebec.
Impressive as the numbers are, the coverage extends to only
12 percent of global emissions, and progress on the issue has been wildly inconsistent. Sure, there is cause for optimism insofar as carbon pricing is finding its way onto the frontlines of global policy discussion, but participants are yet to arrive at a workable solution. Introduced or expanded on the basis that
carbon pricing raises revenue and reduces budget deficits, while curbing emissions, the system is seen by many as a costly and sometimes-oppressive policy stance...
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“Politics is the biggest challenge for any climate change policy because, the benefits are distributed throughout the current and future populations of the world, whereas the costs are concentrated on the regions and countries that must pass legislation”, said Kaufman. “While many governments not only see carbon pricing as a way to combat climate change, but also to improve public finances, the worry of short-term increases in energy prices and goods persists. Businesses are worried about their competitiveness and consumers about their energy bill”, said Long Lam, Consultant on Climate Strategies and Policies at Ecofys. “Many carbon pricing schemes therefore have measures in place to compensate businesses and low-income households for the additional costs they face. It will remain a challenge to strike a balance between the incentive to reduce GHG emissions and mitigating these worries to gain public acceptance.”
As it stands, carbon pricing takes one of two forms, either a carbon tax, as in the case of Australia, or an ETS, popularised by the EU. Speaking on the challenges, Kaufman said: “Carbon taxes and emissions trading systems are the best way to overcome this political hurdle, because they generate government revenues that can accomplish important and popular policy objectives, such as lowering taxes, reducing deficits, and investing in infrastructure and education.” However,
the promise of broad-based and sustainable gains has eluded the majority, and the priority for participating nations in the here-and-now has fallen on learning from the mistakes made in days past and on reaching a political consensus...
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http://www.worldfinance.com/markets/can-you-put-a-price-on-pollution
