Judging only by U.S. political debates about climate change, a reasonable person might conclude that the world was still stuck at square one when it comes to cutting carbon.
The situation is nowhere near that dire. The world is stuck at square two.
Around the globe, 39 nations either price carbon emissions, or are close to doing so. There are also 23 sub-national programs in state or provincial governments. Carbon markets are worth about $30 billion and pricing programs cover 12 percent of global emissions, according to a new report from the World Bank, called State and Trends of Carbon Pricing 2014.
President Obama is expected on Monday to push the U.S. further toward membership in the carbon club. He'll reportedly put forward his most significant action to date on climate change. The proposed rules are said to cut carbon pollution from power plants in a way that enables states to develop programs best meeting their needs.
The U.S. climate change debate “is about to leave the center of wonkville and go to where people live,” said Dallas Burtraw, a specialist on climate and the power sector at the environmental economics research organization Resources for the Future.
Here's a good thing about Washington waiting until 2014 for enactable climate policy: Officials can learn from successes and mistakes made in all these different countries and jurisdictions.
The new World Bank report surveys the world of carbon, and finds almost as many different approaches as there are jurisdictions. Sweden levies about $168 a ton on pollution. Mexico's new tax? A dollar a ton. Make mine a double, por favor.
There are carbon taxes. There are cap and trade systems, in which regulated companies buy and sell pollution permits depending on whether they'll have less or more than their target. There are hybrids, and most are so new or complicated that they are still experiments. “Carbon pricing instruments work,” the World Bank reports, with the anodyne caveat “but not always in the manner or to the extent expected.”
Most of the programs have encountered speed bumps of varying sizes. That's to be expected given the scale and complexity of the task at hand -- reducing the emission of heat-trapping gases without hurting our carbolicious economy.
Some of the more memorable problems have been protracted. The EU's carbon trading system found itself flooded with a surplus of credits soon after it launched. It happened again during the recession. Economic activity slowed, and regulated companies needed to buy fewer permits to meet their pollution targets. They were doing less of everything, including burning stuff to make power.
Some of the more memorable problems have just been glitches. California's second-biggest power utility, Edison International, accidentally bought 21 times more emission allowances than it meant to. The gaffe was good for California, which otherwise would not have sold out its first carbon auction. And Edison International might have overbought, but the price it paid was relatively cheap.
California’s program and the nine-state Regional Greenhouse Gas Initiative are two models that other states can look to as positive examples, according to Burtraw. “They are widely popular with all parts of the political spectrum,” he said. “They are successful.”
The world is tripping and stumbling toward carbon-pricing, sometimes forward, sometimes backward. Australia offers a cautionary tale. Prime Minister Tony Abbott campaigned to repeal the nation's Carbon Pricing Mechanism, and is now trying to do just that. It may influence the course of UN climate negotiations.
Won't it be exciting to see what mistakes the U.S. makes for itself, now that it’s starting to correct the biggest one of all -- ignoring the problem.
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