The price of carbon dioxide must rise to $175 a metric ton in order to halve global emissions by 2050, the head of the International Energy Agency said.
The European emissions trading program, the world’s largest carbon market, isn’t providing a reliable guide on the cost of pollution to promote more investment in renewable energy and other emission-cutting technologies, Nobuo Tanaka, executive director of the Paris-based agency, said in an interview in Singapore today.
“It’s still too low,” Tanaka said. “The EU Emissions Trading System is more of a trial period. The current level of price is not necessarily a good reference for the usefulness of the system.”
EU allowances for December 2010 delivery traded at 14.57 euros a metric ton as of 8:55 a.m. on London’s European Climate Exchange, compared with 14.63 euros at the close of the previous session.
“To achieve a 50 percent reduction in carbon dioxide emissions by 2050, you need it to be $175 per ton,” Tanaka said. More stringent emission reduction targets would lead to higher prices, he said.