Putting a socially responsible price on carbon – a challenge for society

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On 5 December, the EESC organised a conference at the COP21 on "Putting a socially responsible price on carbon – a challenge for society", based on a study commissioned from the Syndex consultancy on Combating climate change: putting a price on carbon on the basis of economic and social criteria.

Carbon pricing is an excellent tool for combating climate change. Many international institutions (the IMF, the World Bank and the OECD) along with a host of economists have drawn up recommendations involving the creation of a system which puts a right universal price on carbon in order to spur on low-carbon productive investments.

The EU was the first region in the world to establish a polluter-pays CO2 emissions system: its emissions trading system largely covers energy-generating sectors and high carbon intensity industries. It is complemented by a system of taxes and standards which vary for each Member State and covers a broad range of sectors such as renewable energy, transport and the residential and tertiary sectors.

However, the initiatives in place have not delivered the expected results. The European way to put a price on CO2 through the creation of an emissions trading market, has failed for two reasons: firstly because the economic crisis is the main cause of the decrease in emissions as production has dropped, and secondly because the market on its own was not sufficient to put a price on it. In addition, the broad array of systems established by the Member States (taxes and standards) are uncoordinated and overly dependent on national energy situations and domestic policy objectives - and have also failed to set an economic price (an explicit and implicit carbon price) per tonne of greenhouse gas emissions.

The study aims to factor the fight against social inequality into carbon pricing and the necessary "fair transition" towards a low-carbon economy and society, and to identify ways to replace the current artificial carbon price with a socially responsible price. In other words, it seeks to lay the groundwork to shift from a fragmented carbon price designed and applied (and planned) solely as an environmental policy instrument unconnected to economic and social events, to a price shaped by social and economic criteria.