By Mitch Jones
I’m glad to see that the leaders of three powerful and influential global organizations have decided to highlight the importance of fighting climate change. Last week International Monetary Fund (IMF) Managing Director Christine Lagarde, United Nations (UN) Secretary-General Ban Ki-moon and World Bank President Jim Yong Kim used a meeting of finance ministers from governments around the world to push for a movement to stop climate change. Unfortunately, the method they chose to endorse will do little to help.
All three leaders are pusing carbon pricing as the means for reducing greenhouse gas emissions. We frequently hear that pricing carbon is the only way we are going to solve the problem of emissions and avoid catastrophic climate change, but policies that seek to rely on pricing to control pollution have a terrible track record.
Large corporations across the economy are planning for carbon prices, whether in the form of a cap-and-trade program or a tax. The reason for this could be that, of the main options for fighting greenhouse gas emissions pricing, carbon pricing is the easiest way for a company to pass on costs to consumers. Major investments in renewable fuels would undercut the business of some of these corporations, while regulations against carbon pollution will be harder to foist off on clients, customers and consumers.
In the absence of any serious and enforceable cap on pollution – that is, a regulation – pricing schemes are just a means of allowing major polluters to pay-to-pollute. Carbon pricing avoids strict enforcement to stop polluting without exceptions; it relies on market signals to magically fix our environmental crises. Pricing carbon, in any of its forms, is just a pay-to-pollute policy that does nothing to truly alter the behavior of financial and corporate interests. Instead, it lets them pay for the “right” to continue their environmental degradation and exploitation.
So, while it’s good that the heads of three important institutions recognize the importance of fighting climate change and are willing to speak out on the issue, they needs to change their tune. Instead of false solutions designed to let polluters keep on polluting, we need to vigorously move beyond reliance on the fossil fuel industry, invest in truly sustainable renewable energy, and place real enforceable limits on pollution.