Putting a price on greenhouse gas (GHG) emissions is seen by
many as the most efficient way to deal with the effects of climate
change.
Carbon-pricing schemes are proliferating around the world both
in the form of carbon taxes and market-based emissions trading.
The World Bank has counted 73 carbon-pricing mechanisms around
the world. They now cover 23% of global emissions compared to just
5% in 2010.
Carbon prices aim to put a value on the pollution that is behind
global warming and to limit carbon emissions that continue to
rise.
The idea is simple and generally supported by many mainstream
economists.
Putting a price on carbon, in principle, identifies the cheapest
greenhouse gas emissions to cut first and thereby supports measures
that tackle climate change at the lowest cost.
