The world needs a massive #carbontax in just 10 years to limit #climatechange, IMF says — The Washington Post

Sen. John Barrasso, R-Wyo., argued in a recent op-ed that fossil fuels, like the coal processed at this Wyoming plant, will continue to power the world for decades, and that the solution to climate change is “investment, invention and innovation,” not regulation. Photo credit: BLM Wyoming

From The Washington Post (Chris Mooney and Andrew Freedman):

The international organization suggests a cost of $75 per ton by 2030.

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…

The IMF report comes out as financial institutions increasingly grapple with the risks associated with climate change, including damage from sea-level rise, extreme weather events and billions in fossil fuel reserves that might be in excess of what can be burned while also limiting warming. The Federal Reserve, for example, is taking a closer look at how climate change may pose a risk to economic stability.

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 idea of making it expensive to produce greenhouse gas emissions is hardly new, and has been widely embraced by economists despite the immense political difficulties involved in imposing such taxes…

But several experts said that the IMF stance was important even as they noted that the carbon price may need to be a lot higher, rendering an already gigantic lift even more difficult.

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