A Climate Diplomacy Proposal: Carbon Pricing Consultations

Abstract

The Doha climate talks in December 2012, wrapped up lines of negotiation that were begun years before in Bali. Negotiators resolved contentious questions about the future of the Kyoto Protocol and finally put the constraints of the Bali agenda behind them. Now they need turn to developing by 2015 a new agreement under the United Nations Framework Convention on Climate Change (UNFCCC) to cover the post-2020 period. In order to make concrete progress on climate policy there is a need to establish a Carbon Pricing Consultation (CPC) process, which would be a detailed, pragmatic, and ongoing discussion of the implementation details of domestic cap-and-trade and GHG taxes.

Though carbon pricing generally been considered to be a national-level policy — to be adopted at the discretion of individual governments — the paper argues that a CPC process would provide an opportunity for negotiators, as well as the administrators of national pricing policies, to discuss how to induce, practically and efficiently, the broad economic shifts required to de-couple emissions and economic activity. This paper makes the argument for focusing on carbon pricing in the international negotiations and offers a way forward in that process.

Keywords: Carbon Pricing, Carbon Tax, UNFCCC, Climate Change, Negotiations

JEL Classification: F51, F53, Q54