In an interview last week John Larsen of the World Resources Institute says that a starting $10 per ton price on carbon is a "sufficient price":
ACES essentially sets a price floor on allowances of $10, which will ensure that a sufficient price on carbon is established even if demand is low.A price on carbon of $10/ton is $10 per ton less than that which has been called for by Rex Tillerson, CEO of ExxonMobil earlier this year:
Rex W. Tillerson, the chairman and chief executive of ExxonMobil Corp., delivered a speech in Washington yesterday endorsing a carbon tax of about twenty dollars per ton as a better way to address global warming than the principal alternative-policy idea, known as a cap-and-trade system, which has already been adopted in Europe.So lets get this straight . . . WRI thinks that a carbon price half of that called for by ExxonMobil is "sufficient" -- at least to start -- and we are arguing over an incredibly complex cap-and-trade program, which probably won;t pass anytime soon and if it does, has more ways to avoid the carbon price than you can imagine. The question that comes to mind is, why?
Why not simply pass a $10 per ton carbon tax, which now seems uncontroversial, and then argue about how fast to increase it and how to (re)distribute the revenue? If I weren't in such a charitable mood I'd probably suggest something cynical, like cap and trade not being about a carbon price after all.