Hansen: Tax carbon now.
Professor James Hansen has called for taxes to be imposed on carbon emissions and fossil fuels in place of carbon markets which he says do not work. Hansen, director of the Nasa Goddard Institute for Space Studies believes that carbon markets often referred to as ‘cap and trade’ schemes are not working and cannot reduce emissions to the level needed to prevent uncontrolled climate change.
Despite high expectations amongst developed countries that carbon markets will cut emissions, interviewed in today’s Independent, Hansen is scathing. Though government representatives all say they will bring down emissions using carbon markets, ‘you can prove that this is horseshit because they’re building more coal plants’.
Cap and Trade schemes operate by imposing an overall cap on emissions, which is reduced incrementally. Members which could be countries, organizations or individuals, trade emissions within the cap and can purchase emission allowances from other members who don’t require or use their full emissions quota.
It’s a system designed to stimulate investment in carbon reduction by increasing the price of carbon emissions year on year, as the cap tightens. But to work it requires the cap to be set tight enough so the price of carbon stimulates investment in clean alternatives, and for governments to hold their nerve and maintain the cap. It also requires a transparent means of trading emission credits and a way of monitoring and regulating the system to make sure members don’t cheat. Despite the faith of western governments there is increasing concern that supposed reductions in emissions using Cap and Trade are illusory.
What Hansen proposes is a framework built around the introduction of a carbon tax in both the US and China. Under his proposal all of the revenue from a carbon tax is returned in equal amounts to citizens so that those with lower carbon footprints are likely to be better off.
But why should China that has refused a cap outright impose a carbon tax? Hansen argues that China is well aware of its vulnerability to the direct impacts of climate change and needs to deal with existing problems to do with air and water pollution. Having invested in carbon-free energy and become the leading producer of solar, wind and nuclear they need to put a price on carbon so that clean energy can take over from fossil fuels.
With Cap and Trade legislation effectively dead in the water in the US with a new Republican Dominated House of Representatives there is no doubt about the need for fresh thinking on this issue. Hansen is using his expertise and reputation to persuade governments that it should become a reality.
Tags: Cap and Trade, carbon taxes, carbon policy, Goddard Institute