On Monday, world leaders gathered in Paris for the start of COP21, a 12-day United Nations conference on how to limit climate change. The conference’s goal is ambitious: to forge an agreement that reduces greenhouse-gas emissions enough to keep global warming under 2 degrees Celsius, compared to pre-industrial temperatures.
At this point in time, the public is not opposed—a recent poll conducted by CBS and The New York Times found that two-thirds of Americans think that the U.S. should join a binding international agreement to lower emissions. However, past efforts on the scale of COP21 have failed. The 1997 Kyoto Protocol, for instance, had participating nations agree to cut emissions by 5 percent, but failed to include China and India, two greenhouse-gas giants. The U.S., one of the biggest emitters, dropped out in 2001.
At COP21, leaders are aiming to agree on how much each country needs to cut its emissions, but then it’s up to countries individually to put policies in place that will allow them to hit those targets. Economists and scientists have proposed plans that, if implemented worldwide, would be highly effective at meeting those targets. But putting such policies in place worldwide is not on the table—as any such scheme has been largely deemed “politically impossible.”
For example, there's the proposal of setting a worldwide cap on greenhouse gases. Instead, in preparation for COP21, participating countries have made voluntary pledges to cut their own emissions. (Rich countries will also amend or affirm their previous pledge to pay $100 billion to countries facing the worst effects of climate change.) Making pledges voluntary gives nations the wiggle room they might need, preventing them from dropping out of an agreement, which is what happened in the case of the Kyoto Protocol. But even if they can get these pledges to work—and the Paris pledges are the largest emissions reductions ever discussed at a UN climate convention—many fear that they won’t be big enough.
Another approach, one that economists have long recommended, is a carbon tax. The Carbon Tax Center has sent a letter to Paris recommending as much, and it includes the signatures of three Nobel economists, Kenneth Arrow, Thomas Schelling, and Joseph Stiglitz. Another economist, Yoram Bauman, has a plan to make a carbon tax revenue-neutral by lowering sales tax. A carbon tax is not without problems, though. There are worries that it would motivate business to pollute in countries with lower carbon taxes, and that higher taxes on transportation fuels will negatively impact economies around the world.
Another solution is a cap-and-trade system, which would impose different caps for different countries, and then let countries buy or sell emissions credits to hit their caps. Obama suggested something similar for the U.S. five years ago, but failed to push the bill through at the time. This past August, he announced the Clean Power Plan (which has been called just another version of cap-and-trade), which has a good chance of being implemented as the White House announced that Obama would veto opposing resolutions. In September, China also committed to putting a price on greenhouse gas emissions and enacting a cap-and-trade program.
While cap-and-trade programs induce countries to pollute less, they might not do enough on their own if the price of an emissions credit is set too low. They still can be effective: Europe’s cap-and-trade system reduced carbon emissions by 9.2 percent between 2005 and 2010.
While Paris will hopefully be a step in the right direction, the agreement that could come out of it—which would be implemented on the scale of individual nations, rather than the entire globe—will be incomplete. A much stronger plan would hold countries accountable to other countries, not just themselves.
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