There should be a worldwide tax on emissions backed by help for developing countries to cut CO2
Mon 6 Jan 2020 11.56 GMT Kenneth Rogoff is professor of economics and public policy at Harvard University. He was the chief economist of the IMF from 2001 to 2003.
Yes, Europe and the US can impose carbon border taxes on developing countries that do not comply with their standards. But, beyond the associated technical challenges, this would raise issues of fairness, given profound global energy inequality. One promising idea, which I have suggested previously, would be to establish a World Carbon Bank that would specialise in energy-transition issues and provide technical and financial assistance to poor and middle-income countries.While denizens of the world’s wealthiest economies debate the fate and fortune of the middle class, more than 800 million people worldwide have no access to electricity. And more than 2 billion have no clean cooking facilities, forcing them to use toxic alternatives such as animal waste as their main cooking fuel. Furthermore, per capita carbon dioxide emissions in Europe and the US are still vastly higher than in China and India. What right do Americans, in particular, have to complain as China increases production in smokestack industries to counter the economic slowdown caused by its trade war with the US? To many in Asia, the inward-looking debate in the west often seems both tone deaf and beside the point.
Even if Europe and the US deliberately stall their capitalist growth engines – as some of the more radical policy proposals might do if implemented – it would not be nearly enough to contain global warming if emerging economies stay on their current consumption growth trajectory.
The most recent United Nations data suggests that the world has already reached a tipping point where there is little chance of limiting the increase in global temperature to what climate scientists consider the safe threshold of 1.5C above pre-industrial levels. In fact, a significantly larger rise is likely. According to a recent IMF report, limiting global warming even to 2C would require a global carbon price of at least $75-$100 per ton of CO2 – more than double its current level – by 2030.