Foreign Affairs magazine is the most influential journal of its kind in the United States and is widely read abroad as well. A new article makes “The Case for a Global Carbon-Pricing Framework." It's well worth reading. A few excerpts:
At climate change summits, world leaders tend to agree on almost everything except what could help the most: directly addressing rising carbon emissions by making them expensive for emitters. For decades, scientists and economists have concluded that pricing carbon is critical to reducing global carbon-dioxide emissions fast enough to combat irreversible climate change. Yet most politicians overlook or even fear carbon pricing. The fossil fuel lobby, in particular, has circulated dangerous myths about carbon pricing, including that it disadvantages developing countries.
By now, however, there is abundant proof that pricing carbon dramatically lowers emissions and even economically benefits the societies that do it. The technical and political barriers that have, so far, impeded an agreement can be overcome with the right institutional design. The need for a global agreement on carbon pricing can no longer be postponed: without a global carbon-pricing agreement, no serious plan to tackle climate change can be made. . .
More than half a century of economic analysis and three decades of empirical evidence suggest that, in the long run, pricing carbon would be politically, economically, and socially beneficial even for the poorest countries. It drives innovation in clean energy technology and generates revenue that can alleviate poverty. It also promotes bilateral, regional, and global cooperation. . .
An agreement to implement carbon pricing worldwide is achievable at this year’s climate summits if leaders make it a top priority. Previous efforts to establish a global agreement for carbon pricing have set target prices too high, making the frameworks seem daunting and politically unpalatable. But a realistic starting point exists between the ideal carbon price ($100 per ton) and the actual median prices in developed countries ($40 per ton) and developing countries (around $10 per ton). World leaders must start at this realistic point: it is crucial to show that a global pricing mechanism of any kind can be set.
@Jonathan Marshall, thanks for highlighting this important Foreign Affairs essay.
The statement in the article that an ideal carbon price for developed countries would be between $40 and $100 per ton of CO2-equivalent (CO2e) in 2030 leads me to note that a re-introduced Energy Innovation and Carbon Dividend Act that started pricing CO2e at $15/ton in 2025 would hit $65/ton in 2030. So even with the years lost since initial introduction in 2018, we're still in the right range for effective emissions reduction.
Certainly, persuading nations to sign onto an enforceable international carbon pricing agreement is a tough assignment, particularly in a time when radical nationalism reminiscent of the early 20th century has been seizing the upper hand in far too many places. But we should all applaud those who want to take it on, and provide whatever help we can.
In related news,
"The European Commission president asked G20 leaders on Saturday to join a proposal to set up global carbon pricing. . .
"Climate change is man-made. So it means we can address it. For this we need innovation, investments in green technologies, renewable energy capacity and energy efficiency ... At the G20 I invited leaders to join the call for global carbon pricing," Ursula von der Leyen wrote on X social media, formerly known as Twitter.
Speaking at the opening session of the G20 Summit in New Delhi, Leyen said that the EU's 'Emissions Trading System' has helped reduce emission by 35% since 2005, while generating more than 152 billion euros ($162.6 billion) of revenues."
@Jonathan Marshall - Thanks for flagging this excellent article. It is remarkably specific in terms of dollar amounts and timing. I wish it were required reading for every US congressional staffer charged with advising their boss about energy policy. Perhaps Rep. Carbajal could send a copy to all MOC offices on the day he reintroduces EICDA. We could also make this an action for all Liaisons. Any chance we could secure a PDF and permission to distribute it?
I was surprised to see almost no mention of CBAMs, apart from this indirect reference:
And the agreement’s designers should ensure that their plan dovetails well with other instruments, including measures that the EU, the United States, and other entities are contemplating to combat carbon leakage.
The authors' main point is that we need a global carbon-pricing mechanism. Rather than wishing and hoping that COP28 might yield an agreement (highly unlikely in my view) it would seem better to talk more about the pressure an EU CBAM will put on countries like the US that are way behind on carbon pricing.
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