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Massive Carbon Tax is needed- International Monetary Fund

The world needs a massive carbon tax in just 10 years to limit climate change, IMF says  The international organization suggests a cost of $75 per ton by 2030, WP,  By Chris Mooney and Andrew Freedman, October 10A global agreement to make fossil fuel burning more expensive is urgent and the most efficient way of fighting climate change, an International Monetary Fund study found on Thursday.

The group found that a global tax of $75 per ton by the year 2030 could limit the planet’s warming to 2 degrees Celsius (3.6 degrees Fahrenheit), or roughly double what it is now. That would greatly increase the price of fossil-fuel-based energy — especially from the burning of coal — but the economic disruption could be offset by routing the money raised straight back to citizens.

“If you compare the average level of the carbon tax today, which is $2 [a ton], to where we need to be, it’s a quantum leap,” said Paolo Mauro, deputy director of the fiscal affairs department at the IMF.

In the United States, a $75 tax would cut emissions by nearly 30 percent but would cause on average a 53 percent increase in electricity costs and a 20 percent rise for gasoline at projected 2030 prices, the analysis in the IMF’s Fiscal Monitor found.

But it would also generate revenue equivalent to 1 percent of gross domestic product, an enormous amount of money that could be redistributed and, if spread equally, would end up being a fiscally progressive policy, rather than one disproportionately targeting the poor.

The impact of a $75-per-ton tax would also hit countries differently depending on burning or exporting coal, which produces the most carbon emissions per unit of energy generated when it is burned.

In developing nations such as China, India and South Africa, a $75 carbon tax reduces emissions even more — by as much as 45 percent — and generates proportionately more revenue, as high as 3.5 percent of GDP in South Africa’s case, the IMF found………

the latest science suggests the world will sustain massive damage, such as the loss of nearly all coral reefs, even if it holds warming to, or just under, 2 degrees Celsius. To keep warming to just 1.5 degrees Celsius, the carbon tax would have to be even higher, the IMF’s Mauro noted, though he said he is not sure how high because the group did not do that analysis.

“The climate crisis is so dire, and public/popular determination to attack it is suddenly so strong and unquenchable, that even $75/ton by 2030 seems far too moderate a target,” wrote Charles Komanoff, director of the Carbon Tax Center, in an emailed response to the IMF study……..   https://www.washingtonpost.com/climate-environment/2019/10/10/world-needs-massive-carbon-tax-just-years-limit-climate-change-imf-says/

October 12, 2019 - Posted by Christina Macpherson | 2 WORLD, climate change