Time to put a price on carbon emissions
Seeing the increase in carbon emission, it is time, starting with the biggest economies of the G20, to agree on valuing nature, including by pricing carbon e?uents. India can take the lead, as president of the G20 this year, in carbon pricing, which will open unexpected avenues of decarbonisation.
Understanding carbon pricing
- Captures the external costs of GHG: Carbon pricing captures the external costs of greenhouse gas (GHG) emissions—the costs of emissions that the public pays for (crop damage, health care costs from heat waves and droughts, and property loss from flooding and sea level rise) and ties them to their sources through a price, usually in the form of a price on the carbon dioxide (CO2) emitted.
- Shifting the burden of damage: It helps shift the burden for the damage from GHG emissions back to those who are responsible for it and who can avoid it.
- Economic signal- Instead of dictating who should reduce emissions where and how, a carbon price provides an economic signal to emitters, and allows them to decide to either transform their activities and lower their emissions, or continue emitting and paying for their emissions.