Carbon pricing is often viewed at the most economical way to reduce emissions, and that might very well be true, but as with anything, the practice has its downsides, according to Ruth Greenspan Bell, public policy scholar at the Woodrow Wilson International Center for Scholars. “Putting a price on carbon might incubate new industries or spur job growth – for example expanding solar production and installation – even as it shuts down other businesses like coal mining. But the benefits and the damage are rarely evenly distributed: the coal miners losing jobs in West Virginia do not necessarily land jobs manufacturing or installing solar panels,” she wrote in the editorial published Monday in The Daily Climate.
Another issue with implementation of carbon pricing is that there are many models available to develop the price, and many of these models are based on assumptions that can be misleading or even just wrong, Bell wrote: “The key point is that models, especially those that evaluate the impact of policies, are tools. They can never reconstruct reality. Because of that, they should convey uncertainty, not the opposite.”
At the end of the day, there are many critical technical questions surrounding carbon taxing, but, “to tax or not is a strategic and highly political decision,” Bell wrote.
