GPPi publishes op-ed on a post-Kyoto strategy for emissions reductions
On November 13, GPPi Associate Director Jan Martin Witte published an op-ed entitled Zeit für die CO2-Steuer (“Time for a CO2 Tax”) in the Financial Times Deutschland. In the piece, Witte argues that a global CO2 market, one of the key goals of the German government, is unrealistic in the foreseeable future and that the government should instead push for new mechanisms for greenhouse gas reductions.
The central goal of the Copenhagen Climate Summit is to replace the Kyoto Protocol agreement which expires in 2012 with a new global agreement which would set a solid basis for the international trade of CO2 emissions. However, Witte argues that a global market for emissions trading would likely fail due to the lack of transparency and politcally distorted transactions which could inevitably lead to adverse implications for climate policy. Furthermore, while in principle market-based efforts to reduce emissions can be the most economically efficient, we have seen that these efforts are not leading to the necessary reduction in greenhouse gases.
An alternative to a global emissions market could be a step-by-step integration of national and/or regional emissions trading systems, for example, a transatlantic market linking the European Union and the United States. However, even this “bottom-up” integration proves challenging as there are still no comparable CO2 market outside of the EU and even if planned systems in, for example, the US, Australia and New Zealand, were implemented, it would be extremely difficult, if not impossible, to unwind these fragile domestic political compromises and the associated distributional effects in order to conform to an international agreement.
In this context, Witte argues that emissions trading will not be enough in order to ensure sufficient cuts in CO2 emissions and that it is high time to seriously consider additional measures, including a CO2 tax as well as infrastructure deals in emerging economies. A CO2 tax, while politically unpopular, would provide clear price signals to producers and consumers and would provide consistent funding towards climate friendly technologies and energy efficiency. As the battle against climate change cannot be won in the US or Europe, but rather in China and India, the US and the EU should work towards clean energy production as well as technology sharing, including especially Carbon Capture and Storage (CCS) technologies. Witte argues that the German government should use Copenhagen to introduce new ideas and proposals into the negotiations.