Ending subsidies for fossil fuel companies also high on the list
FRISCO — A modest carbon tax of just $0.15 per kilo could lead the world down the path of meaningful action on global warming, says a Swedish researcher who was one of the coordinating lead authors of a new report that the Intergovernmental Panel on Climate Change will present next week.
“What we need to avoid dangerous climate change is the application of strong policy instruments,” said Thomas Sterner, professor of environmental economics at the University of Gothenburg.
Despite climate change, most polluters still pay little or nothing when they release carbon dioxide into the atmosphere. The IPCC’s next report focuses on the technical and socio-economic aspects of climate change, including measures to reduce or eliminate emissions of greenhouse gases.
The report covers most important economic sectors; energy, transport, construction, industry, agriculture, forestry and waste management. The summary for politicians will be finalized and presented in Berlin next week.
While the idea of a global carbon tax isn’t likely to find much political traction anytime soon, the report makes it clear that a carbon tax could help dramatically cut greenhouse gas emissions, perhaps by half as soon as 2050. The challenge is to establish sufficiently strong international agreements.
More state-led research to develop new technologies is also needed, and ending subsidies for fossil fuel companies would also have a big impact. Sterner said.
Today, CO2 taxes are relatively unusual being limited mainly to a few countries in northern Europe. Sectoral taxes – on transport fuels are more common and have been shown to have very significant effects. On the other hand, many countries are in fact still subsidising fossil fuels. Sterner says that one important policy instrument would be to remove these subsidies. The measures discussed in the report also include voluntary agreements.
“I really don’t believe in voluntary measures since they imply letting business and industry do as they please,” Sterner said. “Overall, I feel that our report may come across as too modest compared with the report from Working Group I, which was presented last autumn and described the climate situation in the world as catastrophic. But there are indeed real opportunities to limit the emissions,” he added.