Carbon tax overestimation | Naked capitalism
This is Naked Capitalism Fundraising Week. 504 donors have invested in our efforts to fight corruption and predatory behavior, especially in the financial sector.Please join us and participate through our Donation page, Which shows how to donate via check, credit card, debit card, or PayPal.read Why we do this fundraising event,, What we achieved last year,, And our current goals, Support expanded news coverage.
Yves came As early as the 2007 IPCC report was released, the Financial Times touted the concept of carbon pricing in an editorial. Even conservative economics websites like Marginal Revolution tout the idea of ??a “Pigou” carbon tax. Even so, we point out that this kind of taxation will be very regressive and will need to be accompanied by changes in taxation, and may even provide income subsidies for the poor. Needless to say, it is not difficult to imagine how likely this is in the United States.
You can imagine how unreasonable the idea of ??redistributing carbon tax revenues to poor countries that will be hit by high energy costs. In addition to the example of “help” provided by the International Monetary Fund in the form of tenders, Nicholas Shaxon pointed out in his book “Treasure Island” that due to the transnational transfer pricing game and the plunder of the rich, the poor countries in Africa are A typical capital exporting country.
Authors: Anis Chowdhury, adjunct professor at the University of Western Sydney and the University of New South Wales (Australia), held senior positions at the United Nations in New York and Bangkok; Jomo Kwame Sundaram, a former professor of economics, served as the United Nations Assistant Secretary-General for Economic Development. Won the Vasily Leontief Prize for the frontier of economic thought.Originally published on Jomo Kwame Sundaram’s website
Solving the problem of global warming requires reducing carbon emissions by nearly half by 2030! For the Intergovernmental Panel on Climate Change, Emissions must be reduced by 45% By 2030, it will be lower than the level in 2010 and limit the temperature increase to 1.5°C instead of the currently expected 2.7°C.
On the contrary, countries are mainly under pressure to commit to achieving “net zero” carbon (carbon dioxide, carbon dioxide) emissions by 2050 under the agreement. At the same time, despite rising fossil fuel prices, global carbon emissions-now close to pre-pandemic levels-are rising rapidly.
Emissions The emissions from burning coal and natural gas are now greater than in 2019. As the transportation industry recovers from pandemic restrictions, global oil use is expected to increase. In short, by 2050, carbon emissions are far from net zero.
At the annual climate conference in Glasgow, carbon pricing was touted as the main means of reducing carbon dioxide and other greenhouse gas (GHG) emissions. The EU President urged, “Put a price on carbon“, while Canadian Prime Minister Justin Trudeau advocated The world’s lowest carbon tax.
Companies are also uniting One-size-fits-all carbon dioxide pricing, claiming it is “effective and fair.” But there is little discussion about how to distribute the income so raised among countries, let alone supporting the adaptation and mitigation efforts of poorer countries.
Carbon pricing purportedly Punish carbon dioxide emitters for economic losses caused by global warming. The public bears the costs of global warming, such as losses due to sea level rise, extreme weather events, changes in rainfall, drought or higher medical care and other expenses.
But there is little effort or evidence to show compensation to those who have been adversely affected. Therefore, it is understandable that poor countries are skeptical, especially the failure of rich countries to fulfill their commitment to provide US$100 billion in climate financing support each year.
It is said that the carbon dioxide price market solution is “The most powerful tool“In the climate policy library. It claims to prevent and reduce greenhouse gas emissions, while encouraging investment to shift from fossil fuel combustion to clean energy power generation technologies.
No silver bullet
In fact, the actual impact of carbon pricing is minimal-it reduces emissions by less than 2% each year. The impact is still small, because “the emitters hardly pay.” Most people are still not deterred and still rely on the energy produced by burning fossil fuels.In addition, many easy Pass the burden of carbon tax on to others Its expenditure is not sensitive enough to price.
only 22% of greenhouse gases The carbon price of global production is only US$3 per ton on average!Therefore, this Separate price incentives Can not significantly prevent high greenhouse gas emissions, or greatly accelerate the widespread use of low-carbon technologies.
Strong fossil fuel corporate interests ensure that carbon prices are not so high that they force users to switch to energy. Therefore, the existing CO2 pricing policy is “Humble and not so ambitious“Better than they can and should be. At the same time, several factor Has weakened the carbon tax’s ability to accelerate the “decarbonization”.
First, the carbon tax has never actually provided too much climate financing. Second, the carbon dioxide tax mistakenly believes that climate change is caused by “market failure” rather than a fundamental systemic problem. Third, it pursues efficiency, not efficacy! Therefore, it does not regard global warming as an urgent threat.
Fourth, the market signal of carbon tax seeks to “optimize” the status quo, rather than transforming the system that causes global warming. Fifth, it provides a seemingly simple “universal” solution, rather than a situation-sensitive policy approach. Sixth, it ignores political reality, especially the difference in power and influence of key stakeholders.
Unfair to the poor
Even if it is introduced gradually, a unified carbon tax will place more burdens on poorer countries. worse, Carbon pricing is regressive, It hurts the poor even more. Therefore, compared with poor consumers in “ordinary” countries, ordinary consumers in poor countries bear a heavier carbon dioxide tax burden.
However Polls It shows that the burden of a seemingly fair and uniform global carbon tax on developing countries—as part of GDP—far exceeds that of developed countries. Therefore, although the per capita emissions of poorer countries are much lower than those of richer countries, the fixed carbon dioxide tax is much more burdensome for developing countries.
In addition, the standard carbon tax not only directly raises energy costs, but also raises the cost of all goods and services that require energy, thereby placing more burdens on low-income groups. Because of this seemingly fair and one-size-fits-all tax, low-income families and the state pay relatively higher fees.
Analytically speaking, this distribution effect can be avoided through differentiated pricing, for example, by raising prices to reflect the amount of energy used. In addition, compensation mechanisms—such as subsidies or cash transfers to low-income groups—can help.
But these are administratively difficult, especially for poor countries with limited taxation and social assistance systems.In addition, effectively targeting vulnerable groups is There are big problems in practice.
Selective investment and technology promotion policies are more effective in encouraging clean energy and reducing greenhouse gas emissions. Significant investments in solar, hydro and wind energy, and public transportation are required, often involving high initial costs and low returns. Therefore, public investment must often take the lead.
But most developing countries lack the financial capacity to implement such large-scale public investment plans. There is an urgent need for a large increase in compensatory financing, official development assistance and concessional loans, but despite much talk, it has not been fulfilled.
Climate finance initiatives often require improved mitigation incentives, while providing more funding for climate adaptation in developing countries. Potentially, a carbon dioxide tax can generate more resources to meet such international funding needs, but this requires appropriate redistribution measures that have never been seriously negotiated.
Carbon taxes can help
Even if there is no ostensibly market-determined carbon dioxide price, a tax on greenhouse gas emissions will make renewable energy more competitive in price. The United Nations advocated the “Global Green New Deal” in response to the 2008-2009 global financial crisis. It noticed In addition to raising 500 billion U.S. dollars for climate financing each year, a tax of 50 U.S. dollars per ton will make more renewable energy commercially competitive.
International Monetary Fund (IMF) in mid-2021 Staff notes A lower limit for international carbon prices was proposed. This will “quickly start” emission reductions by requiring the G20 governments to enforce minimum carbon prices. While bypassing the difficulties of collective action among the 195 UN member states, it will be very important to involve the largest emitters.
The plan can be pragmatically designed to be fairer and applicable to all types of greenhouse gases, not just carbon dioxide emissions.But even the global carbon price USD 75/ton It will only reduce enough emissions to keep global warming below 2°C-not the 1.5°C required by the Paris Agreement target!