Posted on September 17, 2014 by iMFdirect
By Ian Parry
The time has come to end hand wringing on climate strategy, particularly controlling carbon dioxide (CO2) emissions. We need an approach that builds on national self-interest and spurs a race to the top in low-carbon energy solutions. Our findings here at the IMF—that carbon pricing is practical, raises revenue that permits tax reductions in other areas, and is often in countries’ own interests—should strike a chord at the United Nations Climate Summit in New York next week. Let me explain how.
Ever since the 1992 Earth Summit, policymakers have struggled to agree on an international regime for controlling emissions, but with limited success. Presently, only around 12 percent of global emissions are covered by pricing programs, such as taxes on the carbon content of fossil fuels or permit trading programs that put a price on emissions. Reducing CO2 emissions is widely seen as a classic “free-rider” problem. Why should an individual country suffer the cost of cutting its emissions when the benefits largely accrue to other countries and, given the long life of emissions and the gradual adjustment of the climate system, future generations?
Filed under: Advanced Economies, Economic research, Global Governance, Globalization, IMF, International Monetary Fund, Politics, Reform | Tagged: Australia, carbon pricing, carbon tax, China, Climate change, CO2 emissions, energy taxes, environment, European Union, fossil fuels, Poland, United States | Leave a comment »
Posted on January 9, 2012 by iMFdirect
By Ian Parry
(Versions in عربي, 中文, Español and Français)
As we slide into another year of tough economic times, it’s easy to understand why policymakers are preoccupied with the next few weeks. But they also need to be thinking about the longer term issue of leaving the planet in reasonable shape for future generations.
Without serious efforts to reduce greenhouse gases, scientists predict that by the end of this century global temperatures could be 2.5 to 6.0OC higher than a couple of hundred years ago. That could mean more heatwaves, more droughts, higher sea levels, more violent storms—and so on. When you start to think about the potential impact of, say, droughts on the livelihood of farmers, especially in poorer countries… well, you get the point.
While some progress was made in the latest round of United Nations’ climate change negotiations in Durban, South Africa, we saw two major omissions. There was little progress on either carbon pricing or, related, financing for action against climate change. And there was not enough recognition of what economics has to offer to help tackle the problems.
Filed under: Advanced Economies, Emerging Markets, IMF, International Monetary Fund, Low-income countries, Multilateral Cooperation | Tagged: border tax adjustments, carbon pricing, Climate change, CO2 emissions, domestic tax revenues, Durban, energy taxes, financing for climate change, greenhouse gases, IMF, iMFdirect, International Monetary Fund | 4 Comments »