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Govts’ faith in favourite weapon to fight climate change – the price of carbon – to end in tears, analysts say; carbon price has had “virtually no effect on the market so far and virtually no effect on climate change”

Posted by gmarkets on 4 October, 2007

The battle to beat climate change has come down to one weapon – the price of carbon, according to Jeremy Lovell in The Canberra Times (26/9/2007, p.10).

Carbon price system doesn’t work: And analysts say it is not working. Much lip-service has been paid to cutting climate warming carbon emissions through measures such as improved energy efficiency, technological innovation, reduced demand, higher standards and carbon output restrictions. But in most cases the vital incentive is supposed to be provided by achieving a high price for carbon, from which all else would follow. Neither has happened and time is running out. A spokesman for environment lobby group E3G, Tom Burke, said, “The policy instrument of choice pretty well everywhere is a price for carbon, and it is not going to work”.

Ultimate goal of carbon-neutral global energy system by 2050 a pipedream: “To stop climate change moving from a bad problem getting worse to a worse problem becoming catastrophic, you have to make the global energy system carbon neutral by 2050 – and that will not happen just using carbon pricing.” Sussex University Energy Group spokesman Jim Watson said,

Govts too reliant on carbon pricing: “Governments are relying way too much on the price of carbon to deliver everything. It is a prerequisite but not a panacea. It has to go hand-in-hand with regulations and technological developments, and they are sadly lacking. If you rely too much on the carbon price you give people the option of buying their way out of it. It is a very poor weapon in what is supposed to be a war to save humanity.

Forget carbon price as adequate pressure point: “The oil price shocks of the 1970s didn’t wean us off oil, so why should we believe that a high carbon price will wean us off carbon?” Oxford University economics professor Dieter Helm said, “The price of carbon has had virtually no effect on the market so far and virtually no effect on climate change.”

The Canberra Times, 26/9/2007, p. 10

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