It’s always good to see new research taking place in the fields of climate change and carbon pricing.

The results of a new study, reported by Carbon Brief, make for an interesting read and have significant implications. The study’s conclusion, that ‘blanket carbon-taxing’ could have a greater negative impact on global hunger than climate change, justifiably needs to be something we consider and actively work to avoid as a global community.

https://www.carbonbrief.org/global-carbon-tax-isolation-could-exacerbate-food-insecurity-by-2050

The article highlights an extremely important point, that while climate change is a global problem it affects all regions differently. In the same way, our solutions to climate change cannot be applied in a generalised ‘global’ manner, they must instead be targeted and designed to work at a local level. Carbon pricing is one such solution; enforcing a ‘blanket carbon-tax’ is ineffective and may create problems for some nations (as highlighted by the study), but implementing a nuanced, well-considered carbon policy, designed with each respective region in mind, gives us the best chance to avoid these issues.

A viable alternative would be to utilise Cap & Trade/Emission Trading schemes. Carbon taxes are perhaps simpler to implement but, as the new study makes clear, carbon pricing policy is a complex issue and implementing a blanket solution can have severe consequences. As such, it is important that any carbon pricing policy is tailored to a more local level.

For example, the majority of climate change is driven not by small, poor underdeveloped nations, but rather by large, wealthy, heavy emitting economies. A well-designed carbon price policy can take this into account; whilst the poorer nations can do their part as well (particularly when it comes to applying what we now know of climate change to the planning of their future development), it is more effective to focus first on the heavily industrialised economies which if incentivised to reduce their emissions would contribute most greatly to tackling the problem.

If looking purely at a large, heavy emitting economy, a ‘blanket carbon tax’ at this level is ineffective; it lacks incentives that would otherwise help encourage emitters to reduce carbon emissions. Targeted Cap & Trade schemes would be more suitable as they would not only help limit emissions and incentivise emitters to work at reducing them, but would also provide certainty around the amount of emission reductions that would result. In addition, when linked to other Cap & Trade schemes efficiencies can be gained by finding the cheapest form of emission reductions, rather than relying on a regressive tax to make emissions more expensive.

It would also be possible to implement complementary offset mechanisms for areas that would otherwise remain uncovered, such as poorer developing nations. The offsets could be purchased by entities participating under the functioning Cap & Trade schemes as another way to reduce their emissions, whilst effectively funding the emission reduction activities of poorer nations.

Climate change is a critical global issue, but as this new study highlights we need to tailor and direct the efforts of carbon pricing so it can have the greatest desired impact, rather than simply pursuing it as a one-size-fits-all solution.

About emmi

emmi is the necessary response to the lack of meaningful action to protect the world against the dangers of climate change. Utilising blockchain technology, emmi aims to provide a brand new not-for-profit platform and carbon rating system which will evolve carbon pricing and carbon trading beyond the exclusive remit of governments and centrally controlled organisations. emmi’s solution will instead allow society to provide an efficient social carbon price, and help restore certainty around climate change action.

To learn more, visit https://www.emmi.io