Real carbon price index intensifies pressure on polluters
A global coalition of businessmen and academics has released the groundbreaking Real Carbon Price Index to track the progress the world is making towards reducing greenhouse gas emissions.
“Our ambition is to make the Real Carbon Price Index the global benchmark for carbon pricing. This will highlight global decarbonization efforts, showing whether concrete steps are being taken and who is taking them, ”said Dr Roger Cohen, founder and CEO of Sydney-based start-up C2Zero.
The High Level Commission on Carbon Pricing has determined that if polluters pay US $ 50-100 per tonne for their carbon emissions by 2030, that would be enough to trigger action through direct emission reduction and innovation. , which would allow the objectives of the Paris Agreement to be met.
“If the price is low, as it is now, there is little reason for polluters to act. Our clue shows the brutal truth: greenhouse gas emissions are still far too cheap, ”adds Dr Cohen.
Dr Ummul Ruthbah, senior researcher at the Monash Center for Financial Studies (MCFS), says the real carbon price index shows that the cost of carbon emissions globally has fallen from zero in the 1980s to the level current of only 4.42 USD per tonne.
“This is well below what it needs to be to force both individual companies and entire industries with high carbon emissions to significantly reduce their pollution levels. In fact, the index reveals that about 75% of carbon emitters pay absolutely nothing.
“Although it represents 1% of global emissions, Australia is not even included in the real carbon price index because it does not have a carbon emissions trading system, well let it have an offsets trading system administered by the Clean Energy Regulator, ”Dr Ruthbah said.
“This inaction is against the damage caused by the emission of greenhouse gases. A recent European study found that the social cost of emitting a ton of CO2 could actually be well over $ 3,000 if we don’t act, ”adds Dr. Bei Cui, MCFS researcher.
Some economies, including the EU, US and China, charge polluters for their greenhouse gases, but most countries, including Australia, have imposed very little or no price to greenhouse gas emissions.
“The real carbon price index lets everyone see how seriously the world takes climate change. It looks at which countries or regions are paying their contribution or helping to tackle this crisis, ”said Jan Ahrens, head of research at SparkChange, a provider of carbon products and investment data.
“The index can be used to highlight differences between regions and countries, show how historic decisions (like Brexit) affect carbon pricing, and provide advice to policymakers when setting carbon prices. . Unfortunately, it also illustrates the large gap between our current ambition levels and the scientific goals we need to achieve to limit global warming, ”adds Ahrens.
At around US $ 70, the European Union (US $ 66) as well as Finland (US $ 72.5), Norway (US $ 65.5) and the United Kingdom (US $ 65.06) reached or exceeded the lower end of the 2030 target: with Switzerland (US $ 104.67). ) and Sweden (US $ 136.34) leading the world. At the other end of the spectrum, the poorest performers are India (7% of global emissions), Russia (5%), Iran (2%), Indonesia (2%), Saudi Arabia (2%) as well as Australia (1%), which collectively represent 19% of global emissions and pay zero. Somewhere in the middle are New Zealand (US $ 33.5), California (US $ 21.96) and China (US $ 8.20).
“What is encouraging is that the price of carbon and the extent of emissions covered are steadily increasing. This trend needs more momentum if we are to reach the US $ 50-100 target and change the trajectory of climate change, ”said Dr Cohen.
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