The unpaid social cost of carbon

2018 ◽  
Vol 31 (2) ◽  
pp. 122-134 ◽  
Author(s):  
Martina Linnenluecke ◽  
Tom Smith ◽  
Robert E. Whaley
Keyword(s):  
Fossil Fuel ◽  
Social Cost ◽  
Carbon Tax ◽  
Emission Trading ◽  
Carbon Taxes ◽  
Social Cost Of Carbon ◽  
Content Type ◽  
Trading Scheme ◽  
Fossil Fuel Industry ◽  
Fuel Industry

Purpose This paper aims to examine the complex issue of the social cost of carbon. The authors review the existing literature and the strengths and deficiencies of existing approaches. They introduce a simple methodology that estimates the amount of “legal looting” in the fossil fuel industry as an alternative approach to calculate an unpaid social cost of carbon. The “looting amount” can be defined as society’s failure to charge fossil fuel firms for the damage that their activities cause represents an implied subsidy. Design/methodology/approach The methodology used in this paper combines decisions in the form of policymakers setting carbon taxes and rational investors investing in carbon emission markets. Findings The authors show that the unpaid social cost of carbon in the fossil fuel industry was US$12.7tn over 1995-2013, but may be as high as US$115.5tn. Originality/value Over the same period, the sum of industry profits, emission trading scheme carbon permit and carbon tax revenue totalled US$7tn, indicating the industry would not be viable if it was made to pay for damages to society.

Did TV ads funded by fossil fuel industry defeat the Washington carbon tax?

2019 ◽  
Vol 158 (3-4) ◽  
pp. 301-307
Author(s):  
Steven M. Karceski ◽  
Nives Dolšak ◽  
Aseem Prakash ◽  
Travis N. Ridout
Keyword(s):  
Fossil Fuel ◽  
Carbon Tax ◽  
Fossil Fuel Industry ◽  
Fuel Industry

scholarly journals PARA ALÉM DA INÉRCIA DE AFLUÊNCIA

2017 ◽  
Vol 13 (1) ◽  
Author(s):  
John A. Nevin
Keyword(s):  
Global Warming ◽  
Delay Discounting ◽  
Fossil Fuels ◽  
Fossil Fuel ◽  
Carbon Tax ◽  
Greenhouse Gasses ◽  
History Of ◽  
Fossil Fuel Industry ◽  
Indefinite Future ◽  
Fuel Industry

Global warming poses unprecedented dangers to humankind, and it is a product of human activities: Production and consumption of fossil fuels, accompanied by steadily increasing levels of greenhouse gasses in the atmosphere.  Some of the predicted consequences of warming are already upon us; yet more catastrophic effects will be experienced in the future.  Two behavioral processes operate to maintain fossil fuel use: 1) Delay discounting studies suggest that relatively lesser-valued outcomes (e.g., driving private cars) that are available now are likely to be preferred to the value of a sustainable planet for all humankind, to be achieved in the indefinite future; and 2) ongoing fossil-fueled activities are likely to be highly persistent because of the long and rich history of reinforcement for individuals (e.g., comfort and convenience) and for the fossil-fuel industry as a whole (e.g., jobs and profits). One way to counter that persistence is to tax greenhouse gas emissions, which can shift current incentives away from fossil-fuel based energy toward renewables, even though the ultimate slowing of climate change may be remote.  Carbon-tax contingencies are similar to those employed to treat problem behavior; a successful example of this approach is described.Key words:  Global warming, fossil fuel consumption, carbon tax, delay discounting, behavioral momentum

Carbon Taxes

2021 ◽  
Author(s):  
Jorge H. García ◽  
Thomas Sterner
Keyword(s):  
Low Income ◽  
Social Cost ◽  
Carbon Tax ◽  
Carbon Price ◽  
Low Income Countries ◽  
Carbon Taxes ◽  
Social Cost Of Carbon ◽  
Carbon Pricing ◽  
Sectoral Differences ◽  
Carbon Taxation

Economists argue that carbon taxation (and more generally carbon pricing) is the single most powerful way to combat climate change. Since this is so controversial, we need to explain it better, and to be precise, the efficiency gains are largest when the costs of abatement are strongly heterogeneous. This is often—but not always—the case. When it is not, standards can fill much the same role. To internalize the climate externality, economic efficiency calls for a global carbon tax (or price) that is equal to the global damage or the so-called social cost of carbon. However, equity considerations as well as existing geographical and sectoral differences in the effectiveness of carbon taxation at reducing emissions, suggest earlier implementation of relatively high taxation levels in some sectors or countries—for instance, among richer economies followed by a more gradual phase-in among low-income countries. The number of national and subnational carbon pricing policies that have been implemented around the world during the first years following the Paris Agreement of 2015 is significant. By 2020, these programs covered 22% of global emissions with an average carbon price (weighted by the share of emissions covered) of USD15/tCO2 and a maximum price of USD120/tCO2. The share of emissions covered by carbon pricing as well as carbon prices themselves are expected to consistently rise throughout the decade 2021–2030 and beyond. Many experts agree that the social cost of carbon is in the range USD40–100/tCO2. Anti-climate lobbying, public opposition, and lack of understanding of the instrument are among the key challenges faced by carbon taxation. Opportunities for further expansion of carbon taxation lie in increased climate awareness, the communicative resources governments have to help citizens understand the logic behind carbon taxation, and earmarking of carbon tax revenues to address issues that are important to the public such as fairness.

The green machine

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Keyword(s):  
Competitive Advantage ◽  
Design Methodology ◽  
Reading Time ◽  
Fossil Fuel ◽  
Green Innovation ◽  
Content Type ◽  
Pertinent Information ◽  
Fossil Fuel Industry ◽  
Fuel Industry ◽  
Practical Implications

Purpose This paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies. Design/methodology/approach This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context. Findings The fossil fuel industry could gain significant competitive advantage if it embraces green innovation as a strategy. Originality/value The briefing saves busy executives, strategists and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.

The Political Economy of Carbon Tax: International Practice and the Australian Model

2013 ◽  
Vol 01 (01) ◽  
pp. 1350007
Author(s):  
Alex LO
Keyword(s):  
Policy Design ◽  
Carbon Tax ◽  
Emission Trading ◽  
The Political ◽  
Carbon Taxes ◽  
Carbon Pricing ◽  
Fixed Price ◽  
Emissions Mitigation ◽  
Pricing System ◽  
Trading Scheme

Carbon taxes create incentives for controlling greenhouse gases by putting a price on these emissions. In theory major carbon emitters would pay more under an effective carbon tax. In practice political considerations often dominate and consequently compromise effectiveness in emissions mitigation. Australia's carbon pricing mechanism is a recent example. It involves the use of a fixed-price instrument that resembles a carbon tax and will eventually turn into an emission trading scheme and enable price fluctuation. The policy design is however questionable for overcompensating big polluters and legitimizing the failure to curb emissions domestically. This paper offers a review of the development of carbon tax policies in various national contexts with a focus on Australia. Lessons from the international practices could provide a useful reference for China to advance its timely commitment to establishing a carbon pricing system.

scholarly journals Drilling for the future: Gendered justifications of the Arctic fossil fuel industry

Polar Record ◽  
2020 ◽  
Vol 56 ◽  
Author(s):  
Sohvi Kangasluoma
Keyword(s):  
Fossil Fuel ◽  
Oil And Gas ◽  
The Arctic ◽  
Public Marketing ◽  
Oil And Gas Fields ◽  
Global Environmental ◽  
Fossil Fuel Industry ◽  
Fuel Industry ◽  
Gas Fields ◽  
Opening Up

Abstract Despite the global alarm caused by accelerating climate change, hydrocarbon companies are exploring and opening up new oil and gas fields all over the world, including the Arctic. With increasing attention on the Arctic, companies address the growing global environmental pressure in their public marketing in various ways. This article examines the webpages of Norwegian Equinor and Russian Gazprom & Gazprom Neft. Building on feminist discussions, I analyse the different justification strategies these fossil fuel companies working in the Arctic utilise in order to support their ongoing operations. This article concludes that in order to justify their operations in the Arctic, the Norwegian and Russian companies emphasise values based on discourses that have historically and culturally been associated with masculine practices, such as the control of nature enabled by technology. These justifications are thus reinforcing the narrative of the Arctic as a territory to be conquered and mastered. Even though the companies operate in different sociopolitical contexts, the grounds of justification are rather similar. Their biggest differences occur in their visual presentations of gender, which I argue is part of the justification. Approaching the fossil fuel industry from a feminist perspective allows questioning the dominant conceptualisations, which the justifications of Arctic hydrocarbon companies are based on.

Choosing among Implausible Leaders

2021 ◽  
pp. 24-54
Author(s):  
Peter Drahos
Keyword(s):  
United States ◽  
European Union ◽  
Fossil Fuel ◽  
The United States ◽  
Driving Mechanism ◽  
Wall Street ◽  
System P ◽  
Energy Union ◽  
Fossil Fuel Industry ◽  
Fuel Industry

China is an implausible leader for the globalization of a bio-digital energy paradigm, but the United States and European Union are even less plausible candidates. The chapter shows how the fracking revolution has turned the United States into an energy-secure fossil fuel superpower. No US president can close down the fossil fuel industry. The New Green Deal is unlikely to have much impact on US politics and is only of modest interest to Wall Street. The European Union’s Energy Union initiative is important. But the European Union’s leadership of the bio-digital energy paradigm is hampered by the different energy and industrial interests of its members. Despite China’s corruption problems, it is the least implausible leader of an energy revolution. China’s improved standard-setting capacities are outlined. The chapter concludes by discussing China’s pressure-driving mechanism, a distinctive tool of governance that allows China to overcome problems of fragmentation in its system.

scholarly journals European emission allowance and equity markets: evidence from further trading phases

2019 ◽  
Vol 36 (4) ◽  
pp. 616-636
Author(s):  
Murad Harasheh ◽  
Andrea Amaduzzi
Keyword(s):  
Time Series ◽  
Value Relevance ◽  
Risk Mitigation ◽  
Emission Trading ◽  
Weighted Average ◽  
Market Model ◽  
Emission Trading Scheme ◽  
Content Type ◽  
Emission Allowance ◽  
Trading Scheme

Purpose This paper aims to investigate the value relevance of the European Emission Allowance (EUA) return and volatility on the equity value of the top listed European Power Generation Firms for the three trading phases of the European Emission Trading Scheme. Design/methodology/approach The authors use the multifactor financial market model over the period 2005-2016 on daily basis for the return relevance relationship, whereas time series models such as autoregression moving average and generalized autoregressive conditional heteroskedasticity are applied on a weighted average portfolio of the sample firms to test serial correlation and volatility of returns. Findings The findings are novel in which a positive and significant relevance of EUA return on equity return is shown; however, a vanishing effect is seen as one moves to further trading phases. Another remarkable finding is that the return relationship remains constant until a certain level in EUA price then inverts. Finally, the authors present that EUA is considered a systematic factor as firm and country-specific features are not statistically significant. Practical implications At policy level, these findings signal policymakers for an appropriate design of the future trading phases in which they achieve the balance between public interests, as climate risk mitigation by reducing emissions, and the private interests of the market players to support innovative changes. Originality/value To the authors’ knowledge, this study would be the first to offer recent and comprehensive findings on the economic and financial implications of the European Emission Trading Scheme for the three trading phases. Additionally, the research offers time series robustness check besides the standard regression analysis and shows that there is an optimal EUA price that triggers polluters’ decision on emission and generation.

scholarly journals Climate and wartalk: Metaphors, imagination, transformation

Elem Sci Anth ◽  
2018 ◽  
Vol 6 ◽  
Author(s):  
Rupinder Mangat ◽  
Simon Dalby
Keyword(s):  
Climate Change ◽  
National Security ◽  
Fossil Fuel ◽  
Human Security ◽  
Sustainable Society ◽  
Fossil Fuel Industry ◽  
War Metaphor ◽  
Fuel Industry ◽  
Change Problem

Fossil fuel divestment activists re-imagine how the war metaphor can be used in climate change action to transform thinking around what will lead to a sustainable society. Through the naming of a clear enemy and an end goal, the overused war metaphor is renewed. By casting the fossil fuel industry in the role of enemy, fossil fuel divestment activists move to a re-imagining of the climate change problem as one that is located in the here and now with known villains who must be challenged and defeated. In this scenario, climate activists move away from the climate and national security framing to a climate and human security way of thinking.

Sign in / Sign up

Export Citation Format

Share Document