The debate about pricing carbon is far from over, but proponents of carbon taxes and emissions trading may be winning by accretion at the global scale. The World Bank’s new advance briefing on its forthcoming annual carbon-pricing report underscores the growth in carbon-pricing across the globe. Thirty-nine countries and over 20 subnational state and local jurisdictions now engage in carbon-pricing. Twelve percent of global emissions are now subject to a pricing mechanism, and according to the World Bank, “this figure represents a threefold increase over the past decade.”
This is the first year the World Bank valued carbon taxes in their carbon-pricing report, and no wonder, as the global discussion about climate-policy options increasingly includes carbon taxes in addition to cap and trade. Carbon taxes, according to World Bank, now account for $14 billion dollars of $50 billion dollars of estimated global carbon-price value. Because developing countries do not generally have the expertise to do cap and trade credibly, it is good to see that the World Bank recognizes the importance of carbon-tax programs.
If carbon-pricing is here and growing, it raises the question, how long can the American right stall before a carbon price is no longer a viable trading chip for obviation of onerous environmental regulations like the Clean Power Plan? One oft-repeated argument against a carbon-tax-for-regulation swap is that we will end up with regulations and a tax in the end. We may be looking at just such a future if both carbon pricing and regulatory regimes continue to expand unchecked.