Is Carbon Price the key to dealing with global warming?


UN has pointed out in a climate change report published on Oct.8th that the issue of climate change has to be addressed now before an irreversible threshold, and in order to contain the global warming, putting a price on carbon emission is one of the core ideas that needs to be researched.

Putting a price on carbon emission is also one of the most important theories from Dr. William D. Nordhaus, the Nobel Price of Economic winner and Economics Professor at Yale University. Nordhaus’s research indicates that the most effective way to solve greenhouse gas emission is to tax the carbon emission.

One of the authors of the published UN report, Drew Schindell (professor at Duke University) said that although people think the price putting on the emission is too high, this is still an efficient way to include emission into the economy regime.

In a recent published report by OECD, researchers stated that the average carbon emission price in 42 economic entities is 8 dollars/ton, which is much lower than the price that required to fix climate change.

So far there are more than 45 nations begin to price the carbon emission, including China, EU and California, USA. These nations are doing such in two ways, 1) increase fossil fuel tax, 2) issue carbon emission allowance and trading scheme. Although there are multiple factors that may impede the pricing of carbon emission, including politics, and there are also people arguing that a carbon tax may bring much more negative impacts to the economy such as increasing burden to people by raising the cost of transportation or utilities.  

Researchers from Columbia University estimated that if the carbon price increases to 50 dollars/ton then by 2030 the average US utility bill of each family will increase by 22%, and US Tradition Fund also pointed out in a 2014 report that a 37 dollars/ton carbon price will lower the US economy output by 2.5 trillion dollars by 2030.

UN secretary-general Antonio Guterres believed that instead of the short-term loss, the world should focus on the long-term loss brought by climate change. Guterres said UN is going to prioritize climate change and address this issue in multiple future meetings.