#MoveTheDate
63
Days
Placing a price of $100 USD per ton of carbon would move Earth Overshoot Day by 63 days.
What is the solution?
Placing a price on carbon that reflects the true cost of carbon pollution on the planet. Carbon Taxes place a direct cost on carbon, which disincentivizes highly-polluting activities. Revenues can also be invested in green infrastructure, or returned equally to each citizen. Carbon Markets achieve the same goal via a slightly different mechanism: Instead of a fixed cost, the government places a ceiling on emissions and auctions off the right to pollute to companies, which can then buy and sell the rights amongst themselves.
This solution improves our resource security in the energy category.
How does it #MoveTheDate?
Modeling of Carbon Tax proposals in the US show that a price of 79$ per ton, implemented gradually by 2035, could lead to a 38% drop in Energy-related emissions, and prices of 125-150$ per ton could lead to a decline of over 50%. In countries with lower incomes, these prices would potentially drive carbon emissions down even more.
The EU’s Emissions Trading System, which is the largest multinational system in the world, has been shown to reduce emissions in the sectors targeted (40% of overall emissions) by 10%, despite the cost of carbon being set at a low price. Studies have shown that changes to the allocation process could reduce emissions by up to 25%.
How is it scalable?
Pricing carbon at an appropriate level has the effect of changing the incentives governing all polluting activities. Carbon pricing is a solution that exists alongside all other solutions because it can make all other solutions easier to implement.
What is the solution?
Placing a price on carbon that reflects the true cost of carbon pollution on the planet. Carbon Taxes place a direct cost on carbon, which disincentivizes highly-polluting activities. Revenues can also be invested in green infrastructure, or returned equally to each citizen. Carbon Markets achieve the same goal via a slightly different mechanism: Instead of a fixed cost, the government places a ceiling on emissions and auctions off the right to pollute to companies, which can then buy and sell the rights amongst themselves.
This solution improves our resource security in the energy category.
How does it #MoveTheDate?
Modeling of Carbon Tax proposals in the US show that a price of 79$ per ton, implemented gradually by 2035, could lead to a 38% drop in Energy-related emissions, and prices of 125-150$ per ton could lead to a decline of over 50%. In countries with lower incomes, these prices would potentially drive carbon emissions down even more.
The EU’s Emissions Trading System, which is the largest multinational system in the world, has been shown to reduce emissions in the sectors targeted (40% of overall emissions) by 10%, despite the cost of carbon being set at a low price. Studies have shown that changes to the allocation process could reduce emissions by up to 25%.
How is it scalable?
Pricing carbon at an appropriate level has the effect of changing the incentives governing all polluting activities. Carbon pricing is a solution that exists alongside all other solutions because it can make all other solutions easier to implement.
A high price on carbon means fossil fuels become more expensive than renewables for generating electricity, thereby changing how investments are made in the energy industry. Fossil-fuel based transportation becomes more expensive than electric or mass transit alternatives, shifting demand patterns everywhere. Energy-intensive goods become more expensive to purchase, whereas the price of energy-efficient alternatives remain mostly unchanged. Sustainable alternatives to high-polluting industries and activities could even see their prices decline as they become the targets of renewed investment.This effect may be further amplified if the revenues earned from carbon pricing are used to subsidize them.
Despite the consensus among economists that appropriately implemented carbon pricing has the potential to substantially reduce global emissions, the overall impacts are difficult to model. This is because carbon pricing has such a broad-based impact on the economy, as well as the fact that it is difficult to predict how investment patterns and individual consumption patterns will change. Nevertheless, existing examples of carbon pricing schemes, covering regions of Europe, Asia and North America, have shown that significant benefits can be achieved with minimal disruption.
Implementing carbon pricing requires many decisions to be made: Will it take the form of a carbon tax, or a carbon market, which allows for more flexibility but results in a more complex, less universal system. How will the appropriate price be determined? Prices can be set to reflect a calculated “social cost of carbon” (all existing schemes are currently far below this value), or to achieve a specific reduction in emissions, or to raise a specific amount of revenue. What will the revenue be spent on? Proposals include redistributing revenue to households, subsidizing sustainable alternatives, or investing in green infrastructure. Finally, if prices are not implemented universally, what methods exist to prevent polluting industries from moving to low-carbon-cost areas? All these variations on carbon pricing should not be seen as daunting, rather they show that carbon pricing is a flexible tool that can be tailored to a variety of circumstances and can adapt to new and emerging challenges.
For more information on carbon pricing, please see:
- How to set a price on carbon – Scientific American
- Why is carbon pricing in some countries more successful than others? – Our World in Data
- Carbon taxes and greenhouse gas emissions trading systems: what have we learned? – Journal of Climate Policy
- US Climate Pricing Calculator
There’s no benefit in waiting!
Acting now puts you at a strategic advantage in a world increasingly defined by ecological overshoot. Countless solutions exist that #MoveTheDate. They’re creative, economically viable, and ready to deploy at scale. With them, we can make ourselves more resilient and #MoveTheDate of Earth Overshoot Day. If we move the date 6 days each year, humanity can be out of overshoot before 2050.