‘Price collar’ could break climate deadlock

The world needs to move away from only setting national carbon emission targets, and instead supplement these with an agreed maximum and minimum carbon price that clearly measures the effort it takes to reach these targets, if it wants to break the deadlock on reaching a binding international agreement, according to an ANU expert. Warwick McKibbin of the Crawford School of Public Policy at ANU said that agreeing to a national target together with a climate 'price collar'- a value attached to the effort and the cost of the attempts to reach the target - would allow the world's nations to fairly compare their own and each other's efforts. His team's work, in collaboration with researchers at the Brookings Institution analysing the approach, is published in a new working paper, 'Bridging the gap: Integrating Price Mechanisms into International Climate Negotiations'. "The international negotiations on climate policy need to recognise that common targets for emission reduction does not equate to equal effort by countries," said McKibbin. "To date, there has been little progress made because the negotiators continue to focus on what target a country will take. "To get around this, we suggest an approach that moves on from Copenhagen to enable countries to adopt their own actions and still comply with an agreement, either by reaching targets by having policies that clearly demonstrate a minimum degree of effort. "We then propose a way to measure effort by converting climate policies within a country into a carbon price equivalent policy, and then use that to measure the effort of a country in reaching a commitment.