“Folk should pay for own emissions damage”

Cambridge University sent this through earlier this week. It’s the beginning of an opinion piece by
Dr Chris Hope, senior lecturer in Environmental Policy at the Judge Business School.

It’s another affirmation that the Stern report has resonated through all institutions in the UK. This is mainly because someone had the sense to put a financial figure next to the problems the country could face

People and organisations who do things that lead to the emissions of
greenhouse gases should pay for the damage those emissions cause.

We can estimate roughly how much damage is being caused; the Stern review
puts it at $85 for every tonne of CO2 emitted. My own work shows that there
is about a factor of 3 margin of error around this figure.

The best way to charge people and organisations is to use a climate change
tax, which starts at a moderate level, such as the Stern review’s $85 per
tonne of CO2, and increases by about 3% per year in real terms, as we get
closer to the time the worst damage is likely to occur.

The main advantage of taxes is that the revenue raised could easily be £30
billion per year, which can be used to reduce other regressive taxes which
would reduce inequality and stimulate the economy. This is about a quarter
of the receipts from income tax.

Taxes are also best because one tonne of CO2 causes the same damage wherever
it is emitted, because they use a mechanism (the tax system) that is already
in place and functions well, and because they are easy to extend to other
greenhouse gases such as methane.

There would need to be a mechanism for regular oversight and review of the
tax level as new scientific and economic information came in.