Tuesday, November 10, 2015

Six Principles to Implement Carbon Pricing Quickly, Fairly and Cost-Effectively

The FASTER Principles for Successful Carbon Pricing: An approach based on initial experience (49 page pdf, the Organisation for Economic Cooperation and Development (OECD) and the World Bank Group (WBG), Sep. 20, 2015)

Also discussed here: New Principles to Move on a Low Carbon Path, amid Growing Momentum for Carbon Pricing (Press Release, World Bank, Sep. 20, 2015)

 Today we review proposals from the World Bank and OECD to implement carbon pricing around the world based on experiences from 40 nations and 23 cities. Wider adoption by other countries has the potential to both reduce carbon emissions and to raise significant revenue that could accelerate emission reductions and climate adaptation: up to $400 B by 2030 and $2.2 trillion by 2050. FASTER  

Key Quotes:

“the FASTER principles:
  • fair; Successful carbon pricing policies reflect the“polluter pays” principle and contribute to distributing costs and benefits equitably,
  • aligned with other policies measures that facilitate competition and openness, ensure equal opportunities for low-carbon alternatives, and interact with a broader set of climate and non-climate policies.
  • stable and predictable, gives a consistent, credible, and strong investment signal, the intensity of which should increase over time.
  • transparent, Successful carbon pricing policies are clear in design and implementation.
  • efficient Successful carbon pricing improves economic efficiency and reduces the costs of emission reduction.
  • cost-effective and reliable Successful carbon pricing schemes result in a measurable reduction in environmentally harmful behavior.”
“40 nations and 23 cities, states or regions are using a carbon price. This represents the equivalent of about 7 billion tons of carbon dioxide, or 12 percent of annual global greenhouse gas emissions.”

“cooperation between countries, compared to domestic action alone, could significantly lower the cost of achieving a 2°C goal, … can result in up to $400 billion by 2030 and up to $2.2 trillion by 2050 in net annual flows of financial resources.”

“California and Qu├ębec, which together with British Columbia, Manitoba and Ontario, form part of the Western Climate Initiative (WCI), linked their emissions trading systems from January 1, 2014. Together, they form the largest carbon market in North America.”

 “British Columbia’s carbon tax design includes a tax credit for low-income households to offset the financial burden of more expensive fuel. The credit was last increased in 2011, when it rose to Can$115.50 per adult and Can$34.50 per child. A study found that low-income households were better off after 2010 because the Low Income Climate Action tax credit was more than the amount paid in carbon tax”

“Counterproductive policies undermine the environmental benefits of carbon pricing and should be scaled back….when domestic retail fuel prices are held down below international prices .. or when domestic prices are below cost-recovery prices (for electricity).. climate-harmful subsidies include those for company cars, parking, livestock production and crop production using fertilizers that release nitrogen oxides.”

No comments:

Post a Comment