To slow warming, tax carbon

Putting a price on carbon is fundamental. If consumers and businesses do not bear the cost of their carbon pollution, they won't do much about it. This price should not discriminate between locations: Global warming is global

Dieter Helm

Oxford, England – Environment played only a modest role in the recent American presidential election. President Obama lauded his new fuel-efficiency standards and support for renewable energy sources, while Mitt Romney faulted the president for rising gasoline prices and new restrictions on coal mining.

But while environmentalists have lamented America's slow response to climate change, the United States is actually on a much better path than Europe. It is making the transition from coal to gas, it is investing in new energy technologies, and its carbon emissions are falling faster than Europe's.

This is not to paint too rosy a portrait. Since world leaders met in Kyoto, Japan, in 1997 and agreed to reduce the carbon dioxide emissions of industrialized countries by about 5 percent below 1990 levels by 2012, virtually nothing has been done to slow the buildup of greenhouse gases in the atmosphere. In 1990, carbon emissions were rising at less than 2 parts per million per year. Now they are rising at nearly 3 p.p.m. per year.

How could so little have been achieved, despite all the already considerable economic costs of climate change? Europe, in particular, has put great effort into being a "world leader" on climate change and has spent lots of money on wind farms and rooftop solar panels. Sadly, this has had almost no global effect.

The main reason emissions have been going up is the rise of coal – in China, in particular. Coal is now the source of 30 percent of the world's energy, up from about 25 percent in the mid-1990s. Europe's initiatives have had no effect on China's policies or the global coal burn. Indeed, the initiatives have probably made the situation worse. As the price of energy has increased using current renewables, energy-intensive industries are being driven offshore, only for their products to be imported back into the European Union.

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