Rising carbon prices increase viability of low-carbon tech
A healthy and sustainable climate is a common good that requires everyone to do their part. Yet so often, companies pursue their own short-term gains at an ultimate cost to the many, a problem in economics known as the 'tragedy of the commons'.
This is a particularly pressing concern for carbon emissions. In most cases, the emitting company does not pay in full for the damage it causes, like air pollution, or the physical impact of climate change. In economic terms, the cost of carbon emissions to society is higher than the private cost to the polluter, which all but guarantees higher emission levels than the climate can sustain.
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The solution is simple, in theory. By putting a price on carbon equal to its social cost, emissions are likely to be reduced to levels that the earth can sustain. That’s a solution corporate leaders and policymakers are increasingly relying on in their race to a net-zero economy, as it provides them with a tool to reduce emissions in a cost-effective way, as seen in Europe and China.
This article provides a quick guide to carbon pricing for corporate decision-makers who will have to address this issue head-on in the coming years.
Read the rest of this article here.
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