Sunday, June 7, 2009

Climate change: the case for pricing carbon emissions

Climate change policies have been ineffective for the past two decades, partly because governments have been relying on voluntary actions by the public to reduce greenhouse gas emissions, says Mark Jaccard, professor of environmental management at Simon Fraser University.

Jaccard, the opening speaker at the Canadian Responsible Investment Conference in Winnipeg, says that although he's a strong believer in governments providing information on the importance of climate change and the promotion of energy efficient products, those actions alone will not produce the dramatic reductions in greenhouse gas emissions scientists are telling us we need.

"We've been relying on voluntary, non-compulsory behaviour," Jaccard says. "Governments love to believe that energy efficiency is the way to go and that people like SRI investors will take care of it." But effective climate change policy requires a price on greenhouse gas emissions, he says, such as carbon taxes and cap and trade. "We have to price carbon emissions."

That may not be a popular choice politically, but Jaccard notes that Canadian governments have been setting - and missing - greenhouse gas reduction targets since 1988.

"In market economics, we're not going to be able to reduce greenhouse gases without drastic change. Voluntarism won't get us there."

As for the argument that carbon pricing regulation reduces a country's competitiveness, Jaccard says that's a red herring. "There are no competitiveness issues because all countries must ultimately have policies that apply similar carbon costs to all industries. Climate change risk trumps everything else."

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