solving the climate crisis: carbon pricing 101 basics of carbon pricing dr. linda dismore (diz)...
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Pricing Carbon is not a new idea Figure from World Bank report, 2014 ©TRANSCRIPT
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Solving the Climate Crisis: Carbon Pricing 101
Basics of Carbon Pricing
Dr. Linda Dismore (Diz) Swift
© http://PriceonCarbon.org
![Page 2: Solving the Climate Crisis: Carbon Pricing 101 Basics of Carbon Pricing Dr. Linda Dismore (Diz) Swift ©](https://reader035.vdocuments.mx/reader035/viewer/2022062311/5a4d1af57f8b9ab059980e16/html5/thumbnails/2.jpg)
Costs of fossil fuel use are not included in the current price • Hurricanes (Sandy $65b), drought, health costs, sea level rise
• Social Cost of Carbon estimates from $37 to >$400/ton CO2e
• Fossil fuels are artificially inexpensive
Put a price on carbon emissions so users pay the fair price • Fossil fuel use will decrease; CO2 emissions will decrease
• Alternatives become more affordable and grow • The economy can also grow
Carbon Pricing 101Putting the Market to Work PriceonCarbon.org
© http://PriceonCarbon.org
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Pricing Carbon is not a new idea
Figure from World Bank report, 2014
© http://PriceonCarbon.org
![Page 4: Solving the Climate Crisis: Carbon Pricing 101 Basics of Carbon Pricing Dr. Linda Dismore (Diz) Swift ©](https://reader035.vdocuments.mx/reader035/viewer/2022062311/5a4d1af57f8b9ab059980e16/html5/thumbnails/4.jpg)
How Do You Price Carbon?
© http://PriceonCarbon.org
Carbon Pricing Elements
Pricing Mechanism
Emissions Included
Revenue Use
![Page 5: Solving the Climate Crisis: Carbon Pricing 101 Basics of Carbon Pricing Dr. Linda Dismore (Diz) Swift ©](https://reader035.vdocuments.mx/reader035/viewer/2022062311/5a4d1af57f8b9ab059980e16/html5/thumbnails/5.jpg)
How Do You Price Carbon?
© http://PriceonCarbon.org
Carbon Pricing Elements
Pricing Mechanism
Carbon Tax or FeeCap and Trade
Emissions Included
Revenue Use
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Pricing Mechanism
© http://PriceonCarbon.org
Both mechanisms have been tried; both can be effective.
Cap and Trade Carbon Tax
Emissions Declining emissions cap set by government
Emissions volume based on market
Price Price based on marketRising price set by
government
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Linda Swift © 2015
Declining Cap Set by Government
MaximumEmissionsAllowed
Cap
Year 1 Year 2 Year 3 Year 4
Company A
Cap and Trade
© http://PriceonCarbon.org
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Linda Swift © 2015
Permits Auctioned by Government
Company A emits above cap, needs more permits
Company B buys more permits than neededCompany B
Cap
Cap
Company AEmissions Permits
Emissions Permits
© http://PriceonCarbon.org
Cap and Trade
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Company B sells permits to Company A
Company B
Company AEmissions Permits
Emissions Permits
© http://PriceonCarbon.org
Cap and Trade
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Linda Swift © 2015
Company B sells permits to Company A
Company B
Company AEmissions Permits
Emissions Permits
© http://PriceonCarbon.org
Cap and Trade
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Allocations
Allowances (permits) can be given by government to select companies or industries“Free permits”
May decrease with timeEmissions
Permits
Cap
Allocations“Free Permits”
Company A
© http://PriceonCarbon.org
Complications
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Offsets
Projects which sequester carbon can offset some emissions/permits
Emissions
Permits
Cap
Offset
Company A
© http://PriceonCarbon.org
Complications
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How Do You Price Carbon?
© http://PriceonCarbon.org
Carbon Pricing Elements
Pricing Mechanism
Carbon Tax or FeeCap and Trade
Emissions Included
Electricity generationTransportationIndustrial
Revenue Use
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How Do You Price Carbon?
© http://PriceonCarbon.org
Carbon Pricing Elements
Pricing Mechanism
Carbon Tax or FeeCap and Trade
Emissions Included
Electricity generationTransportationIndustrial
Revenue Use
Government ProgramsMitigate/adaptReduce deficitInfrastructure, etc
Revenue NeutralReturn to peopleReduce other taxes
![Page 16: Solving the Climate Crisis: Carbon Pricing 101 Basics of Carbon Pricing Dr. Linda Dismore (Diz) Swift ©](https://reader035.vdocuments.mx/reader035/viewer/2022062311/5a4d1af57f8b9ab059980e16/html5/thumbnails/16.jpg)
How Do You Price Carbon?
© http://PriceonCarbon.org
Carbon Pricing Elements
Pricing Mechanism
Carbon Tax or FeeCap and Trade
Revenue Use
Government ProgramsMitigate/adaptReduce deficitInfrastructure, etc
Revenue NeutralReturn to peopleReduce other taxes
California
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How Do You Price Carbon?
© http://PriceonCarbon.org
Carbon Pricing Elements
Pricing Mechanism
Carbon Tax or FeeCap and Trade
Revenue Use
Government ProgramsMitigate/adaptReduce deficitInfrastructure, etc
Revenue NeutralReturn to peopleReduce other taxes
Van Hollen Bill
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How Do You Price Carbon?
© http://PriceonCarbon.org
Carbon Pricing Elements
Pricing Mechanism
Carbon Tax or FeeCap and Trade
Revenue Use
Government ProgramsMitigate/adaptReduce deficitInfrastructure, etc
Revenue NeutralReturn to peopleReduce other taxes
CCL
![Page 19: Solving the Climate Crisis: Carbon Pricing 101 Basics of Carbon Pricing Dr. Linda Dismore (Diz) Swift ©](https://reader035.vdocuments.mx/reader035/viewer/2022062311/5a4d1af57f8b9ab059980e16/html5/thumbnails/19.jpg)
How Do You Price Carbon?
© http://PriceonCarbon.org
Carbon Pricing Elements
Pricing Mechanism
Carbon Tax or FeeCap and Trade
Revenue Use
Government ProgramsMitigate/adaptReduce deficitInfrastructure, etc
Revenue NeutralReturn to peopleReduce other taxes
British Columbia
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For more information…
© http://PriceonCarbon.org
http://PriceonCarbon.org