[Editor Note: Part I yesterday explained why carbon pricing cannot succeed unless it is global, and global carbon pricing is unlikely to be achieved, let alone sustained for the time until the job is done (centuries). Today’s post evaluates the output from the most widely cited and accepted climate economics model to show that at realistically likely participation rates, carbon pricing would be economically damaging for all this century, if not far beyond.]
A new report by Sir Nicholas Stern and co-authors “Better growth better climate”, released a week before the UN Climate Summit in New York (September 2014), advocates governments around the world intervene to impose carbon pricing, wind and solar power, and energy efficiency improvements. They imply the net economic costs could be negligible.
“If Europe chooses a solo effort through a one-sided climate protection target of 40% less emissions, it would mean billions in losses for us that our global competitors would not otherwise have gained. The damage done to competitiveness among energy-intensive companies in the EU would be considerable.”
– Utz Tillmann, Energy Intensive Industries of Germany, quoted in “German Industry Issues Stark Warning Ahead of EU Climate Summit,” EurActiv, October 22, 2014.
This two-part series considers the probability of success of carbon pricing and an alternative approach. Part 1, ‘Why carbon pricing will not succeed’, is an edited extract from my submission to the Australian Senate inquiry into repeal of the carbon tax legislation (Submission No 2; Mr Peter Lang). Part 1 explains why carbon pricing cannot succeed unless it is global, and global carbon pricing is unlikely to be achieved, let alone sustained for the time until the job is done (centuries).…