World Bank, International Monetary Fund propose global carbon tax

Le Bourget: One of the smartest ways to fight global warming is putting a price on carbon dioxide pollution, some key world leaders said at Monday’s international climate summit. Either a tax on carbon dioxide emissions or trading carbon pollution like pork bellies, which puts a price on carbon, will help use capitalism to get closer to a day when the world isn’t adding heat-trapping gases to the atmosphere, according to leaders of France, Germany, Canada, Chile, Mexico and Ethiopia, as well as heads of the World Bank, International Monetary Fund and Organisation of Economic Cooperation and Development. [caption id=“attachment_2528422” align=“alignleft” width=“380”]  World Bank Group President Jim Young Kim. File photo AFP[/caption] The number of countries, provinces, states or cities putting a price on carbon has tripled in the past year and is now at 40, including some US states, said World Bank Group President Jim Young Kim. Kim and others pointed to straight carbon taxes in British Columbia, Sweden and France as examples of what works. Economists have known since 1923 that “smart economics puts a tax on bad things and not on good things,” said World Resources Institute President Andrew Steer, a former Wharton economist who wasn’t part of the multi-nation initiative on carbon pricing. He compared it to taxing cigarettes to reducing consumption, although other methods of trading carbon pollution credits aren’t quite the same, he added. “We simply cannot afford to continue polluting the planet at the current pace,” Kim said. “Carbon pricing is critical for reducing emissions, preserving our environment and protecting the most vulnerable.” New Canadian Prime Minister Justin Trudeau said British Columbia’s “world class” carbon tax proves such a device doesn’t harm the economy. There are already costs — called externalities — to burning fossil fuels in terms of public health and deaths, costs that the US Supreme Court has recognised, said Wesleyan University economist Gary Yohe, who was not part of the Paris event. “Cheap and dirty energy is not cheap for the planet or the health of our people,” Chilean President Michelle Bachelet said at the Paris climate summit. “When green taxes are incorporated into our climate policies, we can harness market forces that can lead to profound changes in our emissions patterns.” Europe has carbon pricing and the key in the future is that every nation has to have some kind of uniform carbon pricing, so that energy interests don’t go to another nation for dirty power, German Chancellor Angela Merkel said. Kim said carbon trading can work as well as a carbon tax, but OECD Secretary-General Angel Gurria said that a tax, even if it doesn’t raise new funds and replaces other taxes, clearly works best: “We should put a big fat price on (carbon) in order to penalise it.” AP