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Carbon Pricing

Buzzwords

Carbon Pricing = cost applied to carbon pollution to encourage polluters to reduce the amount of greenhouse gas they emit into the atmosphere

Wikipedia: Carbon pricing seeks to address the economic problem that CO2, a known greenhouse gas, is what economists call a negative externality — a detrimental product that is not priced (charged for) by any market. As a consequence of not being priced, there is no market mechanism responsive to the costs of CO2 emitted. The standard economic solution to problems of this type, first proposed by Arthur Pigou in 1920, is for the product – in this case, CO2 emissions – to be charged at a price equal to the monetary value of the damage caused by the emissions, or the societal cost of carbon. This should result in the economically optimal (efficient) amount of CO2 emissions. Many practical concerns complicate the theoretical simplicity of this picture: for example, the exact monetary damage caused by a tonne of CO2 remains to some degree uncertain.

Headlines
Pricing carbon: A solution whose time has finally come
Could carbon pricing be the secret to meeting the Paris Agreement?
Policy insights from comparing carbon pricing modeling scenarios

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