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Tuesday 20th March 2018

IMF: Carbon Tax Best Way to Cut Greenhouse Gas Emissions

Environment

7Dnews London

Sat, 04 May 2019 12:01 GMT

At $70 per ton of carbon dioxide, a carbon tax would be the most efficient means of cutting greenhouse gas emissions, according to an International Monetary Fund report published Friday, May 3rd.

But for the moment, carbon taxes remain unpopular, particularly in France, where plans to increase it to €55 (or $61.60) from €44.60 recently ignited the Yellow Vest protest movement. 

According to AFP, the French government was forced to suspend the plan in the face of popular revolt. 

The Paris Agreement, adopted in 2015 by more than 200 countries, aims to cap overall increases in global temperatures at two degrees centigrade above the pre-industrial era. 

IMF Managing Director Christine Lagarde and Vitor Gaspar, the fund's head of fiscal affairs, said in a joint blog post, "The 2C target would require cutting emissions by roughly a third by 2030 and a global carbon price of around $70 per ton," adding that “There is a growing consensus that carbon pricing is the single most effective mitigation instrument." 

According to the IMF, a carbon tax allows for a reduction in energy consumption, favours cleaner energies and mobilizes private financing.

In the report, the IMF said that in China, the world's largest emitter, and in India or South Africa, countries which rely heavily on coal, a carbon tax of just $35 per ton would cut emissions by 30%. 

However, in nine countries that use little coal, such as Ivory Coast, Costa Rica or France, the result would be a reduction of only 10%.


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