This is one of the great regrets of those who know the influence of the market and who see with what difficulty the existential fight against climate change is progressing. This is, of course, our reluctance to attribute a price to greenhouse gas (GHG) emissions that would be proportional to the damage they inflict on the planet or, at the very least, which would force changes in the planet. necessary behaviors before it is too late.
Every time the experts look at the question, they come to the same conclusion. One of the best ways to encourage consumers, businesses and nations to reduce their GHG emissions is to put a price on them, which will then weigh on each of their decisions, encouraging energy conservation and the search for greener alternatives. The best part about this idea is that, in the case of a carbon tax, you can then use your revenues as you want, including to finance the green shift or, as in Ottawa, return them to your pocket. Household.
But hey, apparently it is not enough that an idea is good for it to gain ground quickly, a new report from the Organization for Economic Co-operation and Development (OECD) found on Wednesday on the G20 countries, which count. for 80% of global emissions.
If we add the carbon taxes, the cost of emission quota systems as in Quebec and even the excise taxes and duties that apply to fuels, we see that only half (49%) of emissions of GHGs are subject to one form or another of carbon pricing, against 37% in 2018. This average hides large differences between sectors such as transport (94%) and electricity production (64 %), industry (24%) or construction (21%), as well as between countries, with Canada (88%) leading the way, such as South Korea (97%) and Germany (88%), unlike China (48%), the United States (38%) and Brazil (8%).
The total price of these different forms of carbon pricing has not changed much, going from an average of 17 euros (CA $ 24.40) per tonne of CO.2 in 2018 at 19 euros ($ 27.30) today. Here again, there are large differences between sectors such as road transport ($ 126.50), construction ($ 10.50) or industry ($ 5.40), as well as between countries, such as UK ($ 138), Italy ($ 135) and France ($ 133.60) on one side, and USA ($ 21.90), India ($ 20.75) and China ($ 12.30) on the other. Canada sits somewhere in the middle, with an average total carbon price of $ 58.15 (40.47 euros).
Far from the account
All of this usually stays out of the way, not only when it comes to the sectors covered, but also when it comes to pricing. If experts’ estimates vary a lot in this regard, observed the OECD this spring, many say that it should have arrived at 120 euros ($ 172.50) per tonne of CO.2 in 2030 to have chances of achieving carbon neutrality by 2050. The most pessimistic about the progress of technology speak of double, while those who want this price to reflect the social and environmental costs of climate change already set it at 260 $ per ton in 2016.
But don’t we run the risk of dealing a terrible blow to the competitiveness of our own companies or of encouraging them to go and produce elsewhere if we impose a higher carbon price on them? Not if we impose a countervailing tax at the border on goods produced in countries where the carbon price is not high enough, as many already promise to do, especially in Europe. Such “border carbon adjustments” could also take into account the economic costs inflicted by environmental regulations more or less severe than his, we explained last week in the specialized site Resources for the Future.
Well-designed, these border taxes could even encourage recalcitrant countries to increase their own carbon pricing rather than having their exporters pay the difference to foreign countries, argued the OECD on Wednesday. On the condition of course that these recalcitrants are not giants, like the United States or China, in which case we are exposed above all to commercial reprisals.