EcoBeat Staff – Shell, BP, Total, Statoil, Eni, and the BG Group recently announced to the chief of the UNFCCC (United Nations Framework Convention on Climate Change) that a price on carbon “should be a key element” of international climate negotiations. According to the World Bank, there are two types of carbon pricing models:
“An ETS – sometimes referred to as a cap-and-trade system – caps the total level of greenhouse gas emissions and allows those industries with low emissions to sell their extra allowances to larger emitters. By creating supply and demand for emissions allowances, an ETS establishes a market price for greenhouse gas emissions. The cap helps ensure that the required emission reductions will take place to keep the emitters (in aggregate) within their pre-allocated carbon budget.
A carbon tax directly sets a price on carbon by defining a tax rate on greenhouse gas emissions or – more commonly – on the carbon content of fossil fuels. It is different from an ETS in that the emission reduction outcome of a carbon tax is not pre-defined but the carbon price is.”
By and large, news outlets and networks have met this announcement with enthusiastic support; however, many in the environmental community feel that there is an ulterior motive to this sudden change of perspective. These same corporations that expressed support for a carbon price have been incorporating it into their business models for years yet they are still expanding drilling operations. This seems to indicate that these companies are making enough profits from their current operations to afford the carbon credits that come with a carbon price, meaning overall environmental benefits would be negligible. For more on this issue, check out the full story on Climate Progress.