Countries across the globe have been struggling to deal with the impact of Covid-19 and its accompanying economic slowdown. As economies “build back better,” it may be an opportune time to introduce carbon pricing to tackle climate change, according to new Princeton University policy research.
While endorsed by many economists, carbon pricing has been slower to gain traction because of its potential to shock economies and the difficulty of securing political support for increasing taxes. However, fuel prices are already low and people are buying fewer goods and traveling less, so there could be greater benefits to introducing or strengthening carbon prices, the authors argue in the journal Climate Policy.
Carbon pricing — whether in the form of taxes or emissions trading — is an economic approach to account for the environmental costs of emitting greenhouse gases from burning fossil fuels. Carbon taxes typically apply to the producer with increased costs ultimately trickling down to any activity using carbon. For example, oil-extraction companies would be taxed, adding costs to any process that involved burning oil. Emissions-trading schemes set some cap on emissions and permits to emit are traded, but the number of total permits available correspond to that cap.
“When we think about long-term problems like the pandemic or climate change, it’s easy to assume that the solutions could conflict since they all require massive resources,” said lead author Kian Mintz-Woo, a former postdoctoral research associate in Princeton’s University Center for Human Values and the Princeton School of Public and International Affairs (SPIA). “But what we describe in this article is how the context of the coronavirus crisis actually provides a unique opportunity for mutually reinforcing forward-thinking solutions to improve sustainability and wellbeing as countries recover.”…
Skinnerboxed princeton economists who haven’t bothered to investigate the sources of their own funding can be assured of their own access to the harvest extracted via the carbon scam as long as they play the game. The system is turning darwinian selection on its head.