Global CO₂ price could cut emissions by 40 percent

Global CO₂ price could cut emissions by 40 percent
WORLD NEWS

A new study calls for the EU and the USA to join forces to form a “climate club”. If China were to join, global CO₂ emissions could drop drastically.

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The global increase in the respective CO₂ prices by 50 US dollars would lead to a drastic reduction in the climate-damaging greenhouse gas – by 11.5 billion tons, that is 38.6 percent of global emissions. This is the result of a new study by the Bertelsmann Foundation, which is available to “Spiegel”.

The study calculates the consequences and costs of the CO₂ limit tariffs planned by the EU Commission and a “climate club” in different versions, reports the magazine. “The results show that supraregional or even global initiatives have a much stronger ecological effect than a European solo effort – and that at moderate overall economic costs,” the study says.

What is the idea of ​​a climate club?

The average costs would be 0.5 percent of the gross domestic product for all countries, and only 0.1 percent for EU member states. If the EU were to increase the CO₂ price by 50 dollars and at the same time impose a CO₂ tariff on imports in energy-intensive sectors, emissions in Europe would decrease significantly, but would make “only a very small direct contribution to protecting the global climate”. Worldwide emissions would drop by just 2.7 percent to 790 million tons.

In a climate club, the members agree on a minimum CO₂ price and can then freely trade goods and services with one another. Countries that refuse to accept the minimum price have to pay import duties when trading with the climate club. If the EU were to join forces with the USA to form such a climate club, according to the study, global CO₂ emissions would already be reduced by 2.6 billion tons. If China were to join, 23 percent of emissions or 6.9 billion tons of CO₂ would be saved.

“An EU border adjustment can only be an interim solution. Together with the USA, the EU must strive for a supraregional and, in the long term, best global climate club,” says Thomas Rausch, head of the study at the Bertelsmann Foundation. The model of a climate club is also preferred in the Federal Ministry of Economics. An EU border tariff for CO₂ could be understood by other states as “green protectionism”, according to an internal paper of the ministry.

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Author: Killian Jones
Graduated From Princeton University.He has been at the USTV since 2017.
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