Dozens of nations and many local governments are putting a price tag on greenhouse gas emissions that are increasing flooding, droughts and other costly catastrophes.
- Pennsylvania becomes the first major fossil fuel-producing state in the US to adopt a carbon pricing policy to address climate change.
- It joins 11 states where coal, oil and natural gas power plants must buy credits for every ton of carbon dioxide they emit.
- President Joe Biden is attempting a less direct approach — known as the social cost of carbon — that calculates future climate damages to justify tougher restrictions on polluting industries.
- Governments elsewhere have moved more aggressively. Canada, for example, imposes fuel charges on individuals and also makes big polluters pay for emissions.
- It’s one of 27 nations with some kind of carbon tax, according to The World Bank.
- The social cost of carbon attempts to capture the value of all climate damage, centuries into the future.
- Carbon pricing reflects how much companies are willing to pay today for a limited amount of emission credits offered at auction.
- In other words, the social cost of carbon guides policy, while carbon pricing represents policy in practice.