Carbon Pricing is ‘Crucial’ to Climate Mitigation
Carbon pricing is a “crucial tool in any cost-effective climate change mitigation strategy,” according to the Intergovernmental Panel on Climate Change (IPCC).
Carbon pricing is a financial mechanism to lower greenhouse gas emissions by incentivizing people and businesses to become more energy efficient. There are several approaches to pricing carbon, such as carbon taxes and emissions trading, that aim to encourage investments in sustainable infrastructure and lower reliance on fossil fuels — the dominant cause of global warming.
Carbon pricing is an effective and efficient mitigation strategy, according to reports from the IPCC and International Monetary Fund (IMF), and is gaining traction around the world. These policies still have a limited presence in the United States but organizations can plan for their inevitability.
Twelve U.S. states currently have programs that cap carbon emissions and create a market to sell allowances to companies that exceed the cap. California launched a cap-and-trade system nearly a decade ago; The state’s emissions from sources that are subject to the cap declined 10% in the first five years of the program, the IMF reported. Similarly, the Regional Greenhouse Gas Initiative (RGGI), a collaborative effort among 11 eastern states, enforces a regional cap on emissions from power plants and auctions off allowances. Since its inception in 2005, the 11 states have reduced their collective emissions by more than 50% and raised over $4 billion to invest into local communities, the RGGI says.
Organizational and personal changes we make today can prepare us for future carbon pricing policies. Upgrades to make our homes, transportation, businesses, and purchases more sustainable can help us avoid future cost increases — all while building our capacity for climate resiliency and adaptation.
To learn more about carbon pricing, watch my recent conversation with Verdis Associate Olabimpe Airiohuodion below!
(Photo by Dan Meyers on Unsplash)