Image credit: Friends of the Earth UK
While some see it as the only viable way to curb our carbon emissions, and there is evidence that the EU's carbon trading scheme has helped reduce emissions, the fact that the global carbon market has grown to over $136 billion has some people worried. Very worried. Given the ongoing fall out from the latest financial crisis, and the arrest of some carbon traders over fraud, it's little wonder that many are concerned about the idea of appointing investment bankers as stewards of the Earth. But what are the alternatives?
Friends of the Earth UK has just released a report in time for the Cancun climate talks that argues forcefully that carbon trading is not, and never will be, the solution to climate change—and offers up some alternative strategies for financing a clean energy transition without, they say, burdening the average working family with any additional taxes. Unsurprisingly, the authors target many of their measures at the villains of the moment—the large financial institutions—and they claim that in addition to providing much needed finance for the battle against climate change, the moves could also help fund hospitals, schools and other important infrastructure that has been hit by recent government cuts.
The report proposes the following measures as alternatives to the current carbon market:
Financial Transaction Tax: A new,global tax on cross-border financial transactions could generate additional government revenue of US $400 billion, including US $100 billion for climate finance.
Tackling tax evasion: Clamping down on tax avoidance in developed countries could provide significant additional government revenue.
Redirecting fossil-fuel subsidies to clean energy: Global subsidies for the production and consumption of fossil fuels are estimated at US $700 billion per year.
Special Drawing Rights (SDRs): New allocations of SDR s, a reserve asset created by the International Monetary Fund, could be issued at approximately US $100 billion per year without leading to inflation.
Carbon and energy taxation: An EU wide carbon tax and a graduated 'Starter Tax' in the United States could together bring in US $200 billion per year. A levy on international aviation could bring in an additional US$10 billion per year.
"Clearing the Air: Moving on from carbon trading to real climate solutions" is available to download in full as a PDF. An executive summary of the report is also available, and you can access a Spanish-language version via Friends of the Earth's Cancun webpage. The video below from FOE's international Climate campaigner gives a taster of why this matters.
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