Emissions spew out of a large stack at the coal fired Morgantown Generating
Station, on May 29, 2014 in Newburg, Maryland (AFP Photo/Mark Wilson)
Paris (AFP) - A global carbon price of at least $32 (24 euros) per tonne
is needed by 2015 to apply an effective brake on global warming -- almost
five times today's European market rate, a study said Monday.
This beefs up the case for strong cuts in greenhouse gas emissions,
helped by a carbon price "in the range of $32-103 per tonne of CO2
(tCO2) in 2015", said the study carried by The Economic Journal.
"Within two decades, the carbon price should rise in real terms
to $82-260/tCO2," it added.
Such a price should limit the concentration of greenhouse gases in the
atmosphere to 425-500 particles per million, the level required to contain
global warming to 1.5-2.0 degrees Celsius (2.7 degrees Fahrenheit), said
The study was co-authored by Stern's colleague, Simon Dietz, at the
Grantham Research Institute on Climate Change and the Environment.
It was released a day after the close of UN talks in Bonn on concluding
a deal to curb greenhouse gas emissions. The pact is expected to be signed
in Paris in December 2015.
In April, the UN's expert Intergovernmental Panel on Climate Change
(IPCC) said the world can still limit global warming to relatively safe
levels, provided annual emissions are cut by 40-70 percent by 2050.
The panel listed a global carbon price as one option for tackling the
challenge. It warned temperatures could rise by up to 4.8 Celsius this
century and sea levels by 26-82 centimetres (10-32 inches) on present
The International Monetary Fund and World Bank have also this year called
for the introduction of a universal price on carbon -- the most common
greenhouse gas blamed for climate change.
For the moment, carbon prices are determined by national or regional
systems -- either as a tax on emissions or as a cap-and-trade scheme
that allows companies to sell unused allotments.
The European Union Emissions Trading Scheme (ETS), the most ambitious
cap-and-trade system in the world, has seen prices drop drastically from
a peak of about 30 euros per tonne eight years ago to $7.7 (5.7 euros)
today -- partly due to countries issuing too many allowances.
The Stern-Dietz report said the standard DICE model used to calculate
economic risks from climate change, also by studies included in the IPCC's
latest report, used unrealistic values and underestimated the potential
The updated model, "strengthens the case for strong cuts in emissions
of greenhouse gases," Dietz said in a statement.