Bloomberg News

Global CO2 Price of $50 May Avert Climate Catastrophe, MIT Says

May 25, 2012

A global carbon price of $50 a metric ton may be enough to limit catastrophic climate change, according to the Massachusetts Institute of Technology.

China, the world’s biggest emitter, is crucial to curbing emissions to limit temperature rises to 2 degrees Celsius (3.6 Fahrenheit), according to a study published in the Energy Economics journal. Emissions reductions elsewhere will be more expensive without having China’s participation in a global climate treaty, according to the research.

Climate talks end today in Bonn, Germany after international negotiators spent two weeks discussing rules for a climate agreement to succeed the Kyoto Protocol. The Intergovernmental Panel on Climate Change says that temperature rises above 2 degrees may cause catastrophic climate change, unleashing heatwaves, rising sea levels, floods and droughts across the world.

“Not only will it be close to impossible to achieve the 2 degrees mark without China’s participation, but emissions reductions will also be more expensive,” according to an e- mailed statement today from the MIT’s Joint Program on Global Change. “Substantial costs would shift to only some countries.” The Institute said a global deal on greenhouse gases is needed to spread the burden of costs.

Without an international policy temperatures will probably rise by 5.5 degrees Celsius, according to the study. MIT found that a global carbon price of $50 a ton was needed to keep temperature rises below 2 degrees. Temperatures may rise by 3.5 degrees with a carbon price of $10 and by 2.4 degrees with a price of $30, according to the study.

China is planning to start pilot carbon-trading systems across seven regions next year. It’s joining New Zealand, Australia, California, South Korea and Europe in encouraging polluters to buy and sell rights to emit greenhouse gases. The idea of cap-and-trade came from the U.S., which in 1995 established a trading system to curb gases causing acid rain. The U.S. hasn’t agreed on adopting a similar system for carbon emissions.

To contact the reporter on this story: Catherine Airlie in London at cairlie@bloomberg.net

To contact the editor responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net


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