New U.N. Climate Report Says Put a High Price on Carbon

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“It is safe to say that policies other than carbon pricing have driven the majority of emissions reductions to date,” said Jesse Jenkins, a postdoctoral researcher at Harvard’s John F. Kennedy School of Government.

One possible reason for that: While government regulations can often be more expensive in reducing emissions on a per-ton basis, they also tend to hide their costs from voters, and therefore can be a safer political bet. A policy that requires utilities to build more renewable energy has visible benefits — more wind and solar — and murky costs. But a carbon tax that directly increases the price of gasoline at the pump or electricity rates brings more obvious pain, and hence is more likely to garner opposition.

A case in point: In 2012, the Australian government enacted a cap-and-trade program that effectively set a price on carbon of $23 per ton. Emissions fell nationwide under the program. Yet the policy faced a fierce political backlash from industry groups and voters, and when the nation’s more conservative Liberal Party swept into power in 2013, it quickly moved to repeal the program.

A recent report from the Organization for Economic Cooperation and Development found that the average carbon price across 42 major economies was around $8 per ton in 2018, far below the level most experts say is necessary to address climate change. Those low prices, some researchers have argued, may reflect political constraints on pricing carbon directly.

For comparison, the United Nations report estimated that governments would need to impose effective carbon prices of $135 to $5,500 per ton of carbon dioxide pollution by 2030 to keep overall global warming below 1.5 degrees Celsius, or 2.7 degrees Fahrenheit.

The O.E.C.D. report did mention, however, that carbon pricing is starting to show signs of momentum in many parts of the world. Portugal launched its own carbon tax in 2015, and Chile followed suit in 2017. China has launched an early carbon-trading program in several of its provinces. California recently expanded its own cap-and-trade program to cover 85 percent of its statewide emissions. This fall, voters in Washington State will decide whether to enact their own statewide carbon tax.

Some scientists hope that the new United Nations report on the dangers of further climate change may spur nations to step up efforts like these. “If the report works and governments take it seriously, it should increase their ambition for expeditiously reducing emissions,” said Michael Oppenheimer, a climate scientist at Princeton.

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