Global agreement on carbon taxes is unlikely

Subject

Prospects for the introduction of a global carbon tax.

Significance

The decline in oil prices offers an opportunity to countries to introduce a carbon tax to reduce greenhouse gas emissions and combat climate change. The UN Climate Change Conference (COP 21), to be held in Paris in November and December, will seek a global agreement to reduce greenhouse gas emissions and set a specific goal to achieve net zero emissions by a certain date. Yet there is little clarity on how this goal could be achieved and whether there will be agreement on setting a price for carbon.

Impacts

• The oil price plunge will continue to divert attention away from the need to reduce reliance on fossil fuels and increase energy efficiency.
• Without a credible agreement at COP 21, containing climate change disruption will be difficult.
• For any climate agreement to be credible, its implementation process must be addressed in detail.