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Why Carbon Pricing Isn’t Working
Article

Why Carbon Pricing Isn’t Working

Good Idea in Theory, Failing in Practice

Jeffrey Ball
Foreign Affairs, 2018
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Editorial Rating

9

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  • Innovative
  • Eye Opening
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Recommendation

Though it is rare to have a climate change-related policy that can garner the support of leftists and conservatives alike, carbon pricing is such a policy. Still, broad-based support is no guarantee of effectiveness. As Stanford scholar Jeffrey Ball argues in Foreign Affairs, carbon pricing has failed to produce the hoped-for emissions cuts. Even worse, the policy has given governments and companies the false assurance that they are effectively fighting climate change despite evidence to the contrary. Supplementary measures are needed to cut greenhouse gas emissions. getAbstract recommends Ball’s eye-opening piece to policymakers and industry leaders.

Summary

Carbon pricing is a market-based scheme to incentivize companies to invest in clean energy. One version of this policy is cap-and-trade, whereby governments allocate or sell pollution permits to companies or industry sectors. Companies can then buy or sell these permits on the market, depending on whether they exceed or stay below their original permit’s pollution limit. Another approach is imposing a fossil fuel tax, which governments sometimes redistribute to consumers in the form of tax rebates.

Today, 42 countries and 25 sub-national jurisdictions, which together produce about...

About the Author

Jeffrey Ball is Scholar in Residence at Stanford University’s Steyer-Taylor Center for Energy Policy and Finance and a Lecturer at Stanford Law School.

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