📊 EV’s Charts of the Week #49
Hi, I’m Azeem Azhar. I convene Exponential View to help us understand how our societies and political economy will change under the force of rapidly accelerating technologies. My book Exponential tackles this at length.
This is my member’s-only Charts of the Week mailout in which we explore the world through data.
A prelude to COP26
With COP26 around the corner, policymakers have the chance to remove some of the roadblocks that are stopping us from making crucial progress on the climate crisis. Their actions could help reduce carbon emissions rapidly. In order to keep global temperature rises below 1.5ºC, we need to limit carbon-equivalent emissions to around 500 billion tonnes (500Gt). Today, current emissions levels run to 50Gt and rising, so there isn’t much time to “bend the curve”. We haven’t done a great job of it so far, as the tweet below shows.
Learning from 30 years of failure to curb carbon emissions may lead to success at COP26 https://t.co/HrWEt7u5oM pic.twitter.com/AnO9mYK5vU
🎙 This week’s podcast digs deep into this issue, as I discuss the economics of mitigating climate change with Goldman Sachs’ Michele Della Vigna. The episode is going live today, so look out for it in your favourite podcast feed.
DEPARTMENT OF CARBON TAXES
Finding the right price
A widely instituted carbon price is key to cutting emissions. The good news is that change is taking place. The bad news is that only a quarter of emissions are covered: 4% by a carbon tax and 21% by carbon markets. Via SecondNature
All over the map
Carbon pricing is all over the place, and this lack of consistency is an impediment to the market evolving, revenue being raised, and incentives for decarbonisation increasing. The prices themselves range from $0.10 per tonne to $142 per tonne (in Sweden). Via CitiGPS
Right now, carbon taxes generate a vanishingly small amount of revenue. Via Statista
Whole lotta loot from taxin’ soot
Based on existing data concerning greenhouse gas emissions, a global tax around $100 per tonne would net upwards of $3tn in revenue per annum. Via CitiGPS
How to spend it?
The beauty of this hypothetical windfall is that tax revenues could be used to fund decarbonisation infrastructure. Goldman Sachs believes that $56tn in incremental infrastructure spending will be needed to keep below the 1.5ºC target. This doesn’t take into account support for decarbonisation in poorer countries and the potential blow such near-term spending would have on lower-income groups in all nations. Lower-income groups tend to be disproportionately financially impacted by carbon pricing. Via Goldman Sachs