Report: Carbon Prices Must Increase Dramatically To Meet Paris Deal Expectations
The cost of emitting carbon dioxide must increase much more than previously expected if countries in the Paris climate deal are to meet their obligations, according to a report published Monday.
Costs associated with emitting carbon dioxide will have to increase nearly $100 per ton within the next 10 years, economists told Reuters. That number is much higher than the current price in Europe of less than $6.
“If we are going to meet the commitments of Paris, we will have to have prices (at those levels) … The costs of not doing it will be much higher,” said Columbia University Professor Joseph Stiglitz.
Stiglitz is a member of the Commission on Carbon Prices, a group of more than a dozen economists arguing that carbon dioxide prices would need to be $40-$80 per ton by next year, according to a report from the commission. The price would need to double to $50-$100 per ton the following decade.
The climate agreement’s effectiveness largely hinges on whether President Donald Trump decides to pull the U.S. out of the wide-ranging deal.
European leaders have urged Trump to stay with the deal. French President Emmanuel Macron, for instance, said he had a “extremely direct and very frank” conversation with Trump during the G-7 Summit earlier this month.
The climate agreement is not legally binding, allowing the Obama administration to sidestep the Republican Senate’s approval.
Former President Barack Obama joined more than 190 countries in 2016 in a pledge to keep global temperatures below 2 degrees Celsius to stave off what many scientists believe to be man-made global warming. He pledged to cut U.S. greenhouse gas emissions 26 to 28 percent below 2005 levels by 2025.
High prices for carbon dioxide would hamper company’s ability emit pollutants, the report noted, and could see a windfall advantage to wind and solar power projects.
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