Carbon Emissions
Techniques for pricing:
- Some nations utilize carbon pricing, commonly known as cap and trade or an emissions trading scheme, as a tactic to mitigate global warming. In an effort to get polluters to reduce their use of fossil fuels, which are the main contributors to climate change, greenhouse gas emissions are priced.
- It’s time to reach a consensus on the worth of nature, starting with the G-20’s biggest economies and include the price of carbon emissions. India has the chance to lead carbon pricing as the G-20 President for this year, which will create unanticipated routes for decarbonization.
There are three approaches to pricing carbon:
- implementing an emissions trading system (ETS), as done in the European Union (EU) and China; legislating a domestic carbon tax, as done in Korea and Singapore; imposing import duties depending on carbon content, as suggested by the EU.
- Carbon is taxed in 46 countries, yet it only accounts for 30% of global greenhouse gas (GHG) emissions; the average price per ton of carbon is only $6, which is a little amount compared to the expected harm from pollution.
- The IMF (International Monetary Fund) has proposed price limitations of $75, $50, and $25 per tonne of carbon for the United States, China, and India, respectively. By doing this, it believes that global emissions might be decreased by 23% by 2030.
Results for India:
- Carbon pricing raises the attractiveness of investing in renewable energy sources like solar and wind, which have huge potential in India, by implying a fee for cleaner air. The ability to directly discourage the use of fossil fuels while producing revenue that can be used to support the creation of greener energy sources or the protection of disadvantaged consumers makes a carbon tax the most alluring of the three pricing options for India. It might replace the less successful petroleum tax scheme that doesn’t deal with pollution directly.
- In most countries, including India, fiscal policy has built the core framework needed to implement a carbon tax. They could, for example, be added to the widely used automobile fuel taxes and broadened to cover commercial and agricultural activities.
- The main obstacle is the justification offered by industrial firms that they are losing their competitive edge to exporters from countries with lower carbon pricing. So, setting the same rate for each category in all high-, middle-, and low-income countries makes logical.
- It would also make sense to permit companies to use expensive international carbon credits to offset some of their taxable emissions. Transport is not included in the EU since doing so would have resulted in higher consumer costs. Singapore provides vouchers to customers who have seen their utility costs rise. California uses the proceeds from the sale of carbon permits to help offset the cost of buying electric cars.
- Others contend that output-based reimbursements would be preferable to the carbon tax and that “emission intensive trade exposed” companies should be exempt from it.
Communication is important:
- All things considered, there is significant political opposition to carbon pricing. Australia’s 2012 tax was removed by a new, conservative administration just two years after it had been put in place.
- Recent months have demonstrated the political constraints on decarbonization: the EU sold millions of emission permits in response to increasing energy prices, which led to a 10% drop in the price of carbon.
- It is essential to transmit the idea of wins at the society level, even in the setting of certain individual producers’ losses.
- A sufficiently high carbon price across China, the U.S., India, Russia, and Japan alone (which account for more than 60% of the world’s effluents) might have a major impact on global effluents and warming with the right supporting policies. It might also allow for the successful consideration of decarbonization as a development strategy.
Conclusion:
As the concept of carbon pricing spreads, the rivalry for early adopters will increase. By recommending global carbon pricing as the G-20 summit’s president in September, India may take the lead in the existential battle against climate change.
