Carbon Credits Backfire

Science Matters

One of the favorite climate policy prescriptions is to apply carbon pricing either by a direct tax or by requiring purchase of carbon credits or offsets.  Now comes a report of unintended consequences, namely that rising prices for carbon credits have increased the demand for coal, the most disliked of all fossil fuels.

From Bloomberg Why Higher Pollution Costs Aren’t Denting Coal Demand in EU  Excerpts in italics with my bolds.

If you thought the surging price of fossil-fuel emissions in Europe would hurt coal demand, think again.

The highest prices for carbon credits in a decade have also lifted natural gas, discouraging power stations from making the switch away from coal. As a result, demand remains strong for the dirtiest fossil fuel in the continent that’s doing the most to clean up its economy. Coal prices as a result reached their highest in five years on Tuesday.

Gas futures…

View original post 1,171 more words

Advertisements
This entry was posted in applied price theory on by .

About Jim Rose

Utopia - you are standing in it promotes a classical liberal view of the world and champion the mass flourishing of humanity through capitalism and the rule of law. The origin of the blog is explained in the first blog post at https://utopiayouarestandinginit.wordpress.com/2014/03/12/why-call-my-blog-utopia-you-are-standing-in-it/

One thought on “Carbon Credits Backfire

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.