Less than 9% of emissions pay the costs they generate, says OECD

Less than 9% of greenhouse gas emissions in 71 countries studied by the OECD are subject to rates at a level sufficient to offset the costs they are estimated to cause.

In a report published on Thursday, the Organization for Economic Cooperation and Development (OECD) warns of that low percentage of emissions that are subject to at least 60 euros per ton of carbon dioxide that is estimated to be the average costs induced by pollution.

The authors of the report acknowledge that between 2018 and 2021 there has been some progress, as the percentage of emissions that were subject to some kind of carbon tax in those 71 countries went from 32 to 40%.

This means that for the remaining 60%, those responsible for these emissions had absolutely no taxes or charges for their polluting activity.

A CO2 PRICE 15 TIMES LOWER THAN IT SHOULD BE

As for the average carbon price (CO2), it doubled between 2018 and 2021 to reach 4 euros, that is, 15 times less than it should have to be able to offset the estimated costs.

The situation is very different from one country to another, although what has been found is that in 47 of the countries that constitute the sample these prices rose in that three-year period.

The rise occurred, in particular, in those that in 2018 already had the highest carbon price, which are all European countries.

In 2021, Switzerland (€133.26 per tonne of carbon), the Netherlands (€110.77), Luxembourg (€108.17), Sweden (€102.93), Denmark (€94.88), Iceland (€94.51) and Norway (€93.53) had the strongest rates for climate change emissions.

Among the large countries of the Old Continent, Italy is the one that imposed a higher carbon price (89.39 euros per ton), ahead of the United Kingdom (87.52), France (82.82), Germany (80.51) and Spain (62.43), which was therefore only slightly above those 60 euros of reference.

Of the Latin American countries in the sample, Costa Rica offered the highest rate of taxation of emissions, with 46.98 euros per ton. Well below were Mexico (19.92), Chile (14.85), Dominican Republic (13.30), Uruguay (12.29) or Panama (10.58).

USA AND CHINA, AT THE BOTTOM OF THE TABLE

The two countries that generate by far the most carbon dioxide were at the bottom of the table: the United States with 12.11 euros per ton and China with 5.67.

The OECD believes that effective carbon prices should be increased because that would both increase countries’ incomes and reduce emissions.

In particular, the revenues can contribute to the transition towards the international goal of net zero CO2 emissions by 2050.

According to their calculations, if these prices were increased to €120 per tonne, which is the level they believe would need to be reached by 2030, countries would raise on average the equivalent of 2.2% of their gross domestic product (GDP) with these instruments.

The authors of the study also note that the recent energy shock, accentuated in particular with the Russian invasion of Ukraine, has led many governments to reduce many of the taxes on energy, with reductions that have been able to reach 50 euros per ton of carbon and even more.

Although they consider it “understandable” that they have reacted in this way immediately, they insist above all that, if it is necessary to take new measures, they should not be of a general nature but selective for the most vulnerable groups.

In practice, they should be income support for these groups, and at the same time should encourage low-carbon solutions to be more widely available.

Source: SwissInfo