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When generating energy from different resources, different amounts of CO₂ are emitted.
Economists believe that this should also be reflected in the price
Photo: Jochen Tack / IMAGO
An internationally valid price for carbon dioxide emissions would reduce global greenhouse gas emissions by twelve percent at a cost of less than a hundredth of the gross domestic product generated worldwide.
This emerges from a report published by the World Economic Forum and the consulting firm PwC.
The report comes to the conclusion that the costs of a common CO₂ price would be significantly lower than the economic losses that would result from the consequences of an escalating climate crisis.
Setting a global carbon price could "make a significant contribution to combating global warming by accelerating emissions reductions," said Bob Moritz, chairman of PwC.
“We found that it could be done without serious economic damage to livelihoods and the economy, even if the effects were somewhat uneven around the world.
The costs to society and the economy if there is no action are far higher «.
According to the report, the income from a mandatory levy per tonne of CO₂ could be used to support households or invest in green industries that help reduce emissions while creating jobs and economic growth.
A tiered price would also have an effect
The report models the effects of a proposal for a “price corridor for CO₂” that the International Monetary Fund (IMF) made at the beginning of the year.
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According to the IMF regulation, the price for CO₂ would be staggered: companies based in countries with high average incomes would have to pay a price of 75 dollars per ton of carbon dioxide released.
For companies in middle-income countries, the cost was $ 50 per ton.
In low-income countries, the price of CO₂ should drop to $ 25 per tonne.
The price of carbon dioxide in the various regions of the world is currently between 0 and around 137 dollars per tonne of CO₂ equivalent.
The World Bank, for example, offers an overview of the CO₂ pricing instruments that have been introduced to date.
The highest taxes are therefore incurred in Sweden.
In Germany, the CO₂ price is currently the equivalent of 29 US dollars, and by 2025 the levy should reach a value of 55 euros per ton.
There is currently no CO₂ pricing in the USA, among others.
Unequal costs, unequal competitive conditions
It is cheaper for internationally active companies to relocate CO₂-intensive activities to countries with no CO₂ price because there they do not have to pay for environmental pollution.
more on the subject
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If all states were to participate in a CO₂ price system, according to the calculations of the World Economic Forum and the consulting firm PwC, there would only be very little "carbon shifts" by companies, even at lower prices in countries with lower average incomes.
With the proposal of the IMF, the reduction of global greenhouse gas emissions should be accelerated by 2030 in order to limit global warming to 1.5 to a maximum of well below 2 degrees compared to the pre-industrial level - as stipulated in the Paris Climate Agreement of 2015.
Børge Brende, President of the World Economic Forum, described the results of the new report as "extremely positive".
But he also pointed out that it is now above all a matter of cooperation between governments and companies in the private sector in order to promote CO₂ pricing - and thus a reduction in emissions.
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