Manmade climate change is a global problem that requires a global solution.
Proposed here is a fair and sustainable Universal Carbon Tax whereby all countries pay a carbon tax that dynamically factors in:
- Historic, current and future carbon emissions
- The differences between developing and developed economies
- A scientifically defendable carbon price, based on loss and damage
Unlike existing schemes and frameworks, it is independent of:
- Political diktat
- Market forces
- Future energy usage patterns
making it demonstrably fair to citizens worldwide. The following figure from Predict Ability Ltd gives a simplified illustration of how it works:
The vertical axis shows a Universal Carbon Price Weighting Factor, representing the proportions of cost of emissions that can be laid at the doors of various countries. Note that the developed economy countries, with a large accumulated carbon ‘debt’, pay the lion’s share. On the other hand, the developing economy countries, with little accumulated carbon ‘debt’, pay much less. As the developed world de-carbonises and the developing world becomes more affluent, these curves will converge to the point where globalisation puts all countries on an equal footing – this corresponds to the 1.0 line on the figure and will occur around 2040.
Predict Ability Ltd have formulated a scientifically robust price for carbon, from extensive research of reinsurance loss and damage data. They urge this price be adopted as a tax. They advise the resultant tax revenue should be allocated to four realistic AIMS:
- Adaptation (e.g. flood protection),
- Insurance (ensuring viability),
- Mitigation (e.g. solar panels, wind turbines, carbon capture and storage),
- Social dividend (tax impact offsets).
Predict Ability Ltd believe their Universal Carbon Tax is fair, affordable and, as an equitable tax, able to fund the AIMS required to fight manmade climate change in the century to come.
Author: Bruce Menzies
Bruce Menzies is Chairman and co-founder of PAL. He founded Global Digital Systems Ltd that won the Queen’s Award For Enterprise 2011. Bruce is co-author of six books on geotechnics and geology, one of which won the British Geotechnical Association Prize 2002. He holds doctorates from the Universities of London and Auckland, and is a Fellow of the Institution of Civil Engineers.