## Sins of Emission and Omission in Durban

_IMF Blog, January 9, 2012_

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**Canonical URL:** [Sins of Emission and Omission in Durban](https://www.imf.org/en/blogs/articles/2012/01/09/sins-of-emission-and-omission-in-durban)

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## Bibliographic details
- Authors: Ian Parry
- Published: January 9, 2012

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### Climate risks and context
- Without serious efforts to reduce greenhouse gases, scientists predict that by the end of this century global temperatures could be "2.5 to 6.0OC higher than a couple of hundred years ago."
- Potential impacts noted: more heatwaves, more droughts, higher sea levels, more violent storms and consequent effects on livelihoods, especially for farmers in poorer countries.
- Durban negotiations: some progress, but two major omissions identified—little progress on carbon pricing and financing for climate action, and insufficient recognition of economic tools to tackle climate problems.

### Carbon pricing: rationale and mechanics
- Carbon pricing policies are described as "the sina que non ... of a coherent mitigation policy."
- Effectiveness:
  - Carbon pricing is "easily the most effective instruments for reducing CO2 emissions—the pre-dominant greenhouse gas—and providing incentives for the clean technology investments" needed to stabilize climate.
  - Over "90 percent of global CO2 emissions are still not covered by pricing schemes."
- Revenue potential example:
  - U.S. CO2 emissions currently about "5.5 billion metric tons."
  - Pricing U.S. CO2 emissions at "$25 per ton" could raise in just one decade about the same revenue as "the entire aspirational target of the recent United States congressional deficit reduction ‘super committee.’"
- Implementation challenges:
  - Consumers face higher energy prices; energy-intensive firms (e.g., steel and aluminum producers) become less competitive.
  - Compensatory measures for affected groups, especially the most vulnerable, are likely important for effective implementation.
- Design and offset options:
  - Scale back pre-existing energy taxes that become redundant with carbon pricing; in many advanced countries, reducing pre-existing excise taxes on electricity consumption and vehicle purchases could offset most or all of the burden on electricity prices and motorists.
  - Adjust broader fiscal systems: example—Australia plans to use revenues from planned carbon pricing to substantially increase personal income tax thresholds (allowing people to earn more before entering the first tax bracket).
  - Border tax adjustments: levy fees on imports from non-carbon-taxing countries to address lost competitiveness, noting these need careful design to be consistent with international trade obligations.

### Climate change finance: sources and proposals
- Advanced countries committed to raising "$100 billion a year" for climate adaptation and mitigation in developing countries, but the source of these funds is unclear.
- Options evaluated by G20 and IMF include many domestic revenue sources (taxes on electricity, fuels, income, capital, financial transactions).
- Carbon pricing favored:
  - Carbon pricing both raises revenue and tackles emissions directly; seen as "the best bet."
  - Political/fiscal realism: difficult to imagine governments parting with much revenue from domestic sources in the current fiscal environment.
- International aviation and maritime fuels:
  - "Carbon charging for international aviation and maritime fuels might be more promising," since national governments do not yet have a clear claim on this tax base.
  - Rationale: about "3 percent of global CO2 emissions result from flying or shipping," and currently there are no excise taxes analogous to those for motor fuels.
  - Broader fiscal rationale: international passenger tickets are generally not subject to value added taxes.
  - Design issues and equity:
    - Charges should be coordinated internationally.
    - Developing countries may need compensation to encourage participation.
    - Options include letting countries keep revenues they collect from aviation fuel charges or receiving rebates for maritime charges in proportion to trade shares.

### Insuring against catastrophe and technological contingencies
- Consideration of "last resort" technologies: filters for sucking CO2 out of the atmosphere, techniques for deflecting incoming sunlight, and similar options.
- These technologies could be useful in the very unlikely event that future warming imperils the planet, but they raise "all sorts of tough issues."
- The longer policy omissions delay emissions pricing, the greater the (albeit described as "very small") increase in the probability of such a catastrophe.

*Ian Parry — January 9, 2012 (Sins of Emission and Omission in Durban)*

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## Content in this bundle

- **iMFdirect 博客: 德班的排放和疏漏之罪, 2012 年 1 月 9 日**
  - [iMFdirect 博客: 德班的排放和疏漏之罪, 2012 年 1 月 9 日 (Markdown version)](/external/chinese/np/blog/2012/010912c.pdf.md){rel="alternate" type="text/markdown"}
  - [iMFdirect 博客: 德班的排放和疏漏之罪, 2012 年 1 月 9 日 (PDF)](/external/chinese/np/blog/2012/010912c.pdf){rel="external" type="application/pdf"}
- **110411a**
  - [110411a (Markdown version)](/external/np/g20/pdf/110411a.pdf.md){rel="alternate" type="text/markdown"}
  - [110411a (PDF)](/external/np/g20/pdf/110411a.pdf){rel="external" type="application/pdf"}
- **IMF content unit 110411b**
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  - [IMF content unit 110411b (PDF)](/external/np/g20/pdf/110411b.pdf){rel="external" type="application/pdf"}

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## References

- [economic challenges of climate change](http://www.imf.org/external/np/exr/facts/enviro.htm)
- [the importance of carbon pricing](http://blogs.imf.org/2009/11/23/climate-change%e2%80%94some-simple-and-quite-convenient-truths/)
- [Group of Twenty advanced and emerging economies asked the IMF, along with others, to evaluate the options](http://www.imf.org/external/np/g20/index.htm)

_Source: https://www.imf.org/en/blogs/articles/2012/01/09/sins-of-emission-and-omission-in-durban_