The case for carbon pricing

Human-induced climate change poses enormous risks to our environment, economies and societies. Nations have come together under the auspices of the United Nations to debate what needs to be done to manage these risks. They have agreed that it is prudent to attempt to limit the increase in the global mean temperature to 2°C or less and have recognised that that entails sharp reductions in annual global emissions of greenhouse gases over the next few decades. But how is that to be achieved? This policy brief outlines the arguments for a broadly uniform carbon price as a key part of the policy framework in the UK and other countries. It is by no means the only policy tool needed but it is essential if a cost-efficient and fair solution to the challenge of human-induced climate change is to be found.