A GLOBAL EMISSIONS TRADING SCHEME

As of 2018, carbon pricing initiatives implemented or scheduled for implementation would cover 11 gigatons of carbon dioxide equivalent (GtCO2e), or about 20% of global GHG emissions.

However many national Carbon Tax Schemes being introduced by governments just collect a carbon tax which is being placed into their national budgets.

Any Global Emissions Trading Scheme to be successful at lowering atmospheric carbon content must, 

 

  • Collect the carbon tax from all carbon producers at the point of production .

  • Paid the collected tax directly to the registered Carbon Sequesters

Furthermore Indigenous Forests must be included within the Global ETS as Carbon Sequesters.

 

However there needs to be stringent conditions in place for nations and states which want to register their indigenous forests as Carbon Sequesters which ensure the forests are nurtured and protected, and are not taken over by commercial interests at the expense of the local community who rely on them for food and income.

Plus it is suggested that a large portion of income from the ETS, generated by the Indigenous Forests, for the first ten year should be utilized to either,

  • Improve living conditions of local communities

  • Fund National Projects that will assist decarbonize the communities of that nation

  •  Fund Renewable Energy Projects

  • Investments in Renewable Energy or Decarbonization Projects in other nations.

 

The above will ensure a doubling of decarbonization globally.

  • The first from ending Deforestation

  • The second from approximately US$900 Billion being made available for new Renewable Energy and De-carbonization Projects each year for the next ten years.

  • Alberta introduced a carbon tax, covering all emissions from combustion that are not already covered by its existing carbon pricing initiative for large emitters. In 2018, the province's tax rate increased from CAN$20/tCO2 (US$16/tCO2e) in 2017 to CAN$30/tCO2e (US$23/tCO2e) in 2018. 
     

  • Argentina adopted a carbon tax of $US10/tCO2e in december 2017. Beginning January 1, 2019, the tax will be levied at the full rate for most liquid fuels, increasing annually by 10% to reach 100% by 2028. The carbon tax is estimated to cover about 20% of the country's GHG emissions and is expected to raise approximately ARS11.5 billion (US$571 million) in revenue per year. 
     

  • Mexico  launched a year-long ETS simulation exercise in 2017 with a view to strengthen national capacities regarding the design and operation of an ETS. In December 2017, amendments to the General Law on Climate Change mandated the design and launch of an ETS in Mexico. This ETS would operate in a pilot phase for 36 months, followed by a formal launch phase planned in 2022.
     

  • Colombia implemented a carbon tax on all liquid and gaseous fuels used for combustion, covering around 24 percent of the country's GHG emissions. Revenue raised is earmarked for the Colombia in Peace Fund to support ecosystem protection and coastal erosion management.
     

  • Chile's carbon tax came into effect January 1, 2017, and targets large thermal power plants at US$5/tCO₂e. The country has a target of cutting greenhouse gas emissions to 20 percent below 2007 levels by 2020.

  • China's national ETS was officially lanuched in December 2017 and the initial phase of its ETS roadmap is underway, with a focus on completing the infrastructure and legal foundation for the ETS. Once operational, China will host the largest carbon market in the world.  
     

  • Republic of Korea launched its ETS in January 2015, covering 525 businesses from 23 sectors that account for about two-thirds of the country's national emissions. The country has a target to reduce emissions 30 percent below business as usual by 2020.
     

  • The European Union pioneered international carbon emissions trading in 2005. The system, currently the world's largest, covers more than 11,000 power stations and industrial plants, along with airlines, in the 28 EU countries plus three other countries. It has struggled with low prices and excess allowances and has been developing plans for reform.
     

  • Finland escalated its carbon tax rate for coal, heavy fuel oil and light fuel oil by €4 to €62/tCO2e (US$77/tCO2e) aligning carbon tax rates for heating fuels and liquid transport fuels.
     

  • Singapore plans to launch in carbon tax in 2019 on direct emitters and use the revenues generated to help finance industrial emission reduction measures. 

WHERE TO IMPOSE A CARBON TAX

Much has been written about imposing a Carbon Tax.

However if we are looking for the most logical and easiest to manage, imposing the tax at the source, makes by far the most sense.

For example  1 barrel of oil produces 118 kg of carbon emissions. Therefore it takes 8.5 barrels of oil to make 1 ton of carbon emissions.

 

To impose a US$30/ton carbon tax on the producers would only require OPEC nations, etc, to pay a US$3.50/ barrel carbon tax.

Oil prices can fluctuate by more than US$20 in the course of any six month period. And most countries do not adjust their, at the pump petrol prices, on a daily basis. Hence to introduce a US$3.50/barrel tax in a low ebb cycle of crude prices would hardly be noticed.

Furthermore it is suggested that the tax be implemented over a 7 year period. Hence oil price would only need to be increased by 50 cents/ barrel/ year for the first 7 years of the ETS program.

As global oil producers are producing approximately 95 million barrels/day or 34.5 billion barrels/year, this carbon tax would produce more than US$ 120 billion to be dispersed to Carbon Sequesters, without any country having to impose any new taxes. In fact the general populations of every nation would hardly even realize the new Carbon Tax on Oil had been implemented. 

Of course this is just oil. Gas, Coal and other GHG emitting fuels should be subject to the same tax, over the same implementation period, with the same collection methods.

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